business news in context, analysis with attitude

Random and illustrative stories about the global pandemic and recovery efforts, with brief, occasional, italicized and sometimes gratuitous commentary…

In the US this morning, there are 1,571,018 confirmed cases of the Covid-19 coronavirus, with 93,542 deaths and 361,227 reported recoveries.

The global numbers hit a milestone - more than five million cases of the coronavirus.  As of this morning, the precise number is 5,006,675, with 325,319 fatalities and 1,973,815 reported recoveries.

From the New York Times:

"All 50 states have begun to reopen in at least some way, more than two months after the coronavirus thrust the country into lockdown. But there remain vast discrepancies in how states are deciding to open up, with some forging far ahead of others.

"Connecticut was among the last states to take a plunge back to business on Wednesday, when its stay-at-home order lifted and stores, museums and offices were allowed to reopen. But not far away in New Jersey, the reopening has been more limited, with only curbside pickup at retail stores and allowances for certain industries.

"The contrast illustrates a dynamic playing out across the country, as governors grapple with how to handle a pandemic that comes with no political playbook."

The story goes on:  "States in the Northeast and on the West Coast, as well as Democratic-led states in the Midwest, have moved the slowest toward reopening, with several governors taking a county-by-county approach … By contrast, several states in the South opened earlier and more fully."

The state that has reopened the fastest and most completely:  Alaska, where "Gov. Mike Dunleavy said he would lift restrictions on businesses by the end of the week, allowing restaurants, bars, gyms and others to return to full capacity. Sports and recreational activities will be allowed … Social-distancing strategies, including the wearing of masks in public, would be recommended but not required, he said."

However, if you want to go Alaska there is still a "requirement that travelers arriving in the state stay quarantined for 14 days."

From Axios:

"More than half of U.S. counties don’t have a single coronavirus testing site, according to a recent report by Castlight, a health software company … That leaves a wide swath of the country — particularly rural areas — vulnerable to undetected coronavirus outbreaks, especially as lockdown measures ease."

Here's how the numbers break out:  "54% of all counties don’t have a testing site … Among counties with 50,000 or more people, 38% don’t have any testing sites … Among rural counties with fewer than 10,000 residents, 68% don’t have any."

The Associated Press reports that "the world cut its daily carbon dioxide emissions by 17% at the peak of the pandemic shutdown last month, a new study found.

"But with life and heat-trapping gas levels inching back toward normal, the brief pollution break will likely be 'a drop in the ocean' when it comes to climate change, scientists said."

The story says that "an international team of scientists calculated that pollution levels are heading back up — and for the year will end up between 4% and 7% lower than 2019 levels. That’s still the biggest annual drop in carbon emissions since World War II.  It’ll be 7% if the strictest lockdown rules remain all year long across much of the globe, 4% if they are lifted soon."

Doesn't mean that choking the planet is inevitable.  Just means that we have to learn the lessons of the past few months and then apply them to both public policy and personal behavior.

Bloomberg has a story about how "Amazon wants to innovate its way out of the pandemic."

An excerpt:

"The retailer this month posted dozens of jobs for laboratory workers in the city of Hebron, across the river from Cincinnati, including a laboratory director, technicians and assistants who will test samples collected from some of Amazon’s more than 900,000 employees. In Sunnyvale, California, the headquarters of Amazon’s Lab126 hardware group, the company is seeking microbiologists and researchers, as well as a lawyer to oversee the legal aspects of the laboratory initiative.

"The testing project, on which Amazon expects to spend some $300 million in the three months ending in June, is the most visible element of a broad corporate effort that has Amazon executives reassigning teams across the company to deal with elements of the coronavirus. Last month, the company said that it planned to spend about $4 billion on Covid-19 related expenses during the second quarter of the year. Amazon is tight-lipped about its plans, but the array of initiatives launched so far hint at the scale of the company’s ambition to thrive in a world turned upside down."

The story notes that "some of the projects Amazon began early in the coronavirus are starting to pay off. Last week, the company said it had started manufacturing medical face shields based on designs developed alongside a hobbyist group that have been approved for use by the National Institutes of Health. Robotics engineers are working to adjust the company’s warehouses, originally built for maximum efficiency, for a period when in-person contact and teamwork is dangerous. The company recently deployed a machine in some facilities that helps sort incoming items into bins, saving employees trips that often had them walking past co-workers."

And, Bloomberg writes, Amazon has a structural advantage over some other companies in terms of responding to circumstances:  "Amazon structures itself around small, decentralized teams. In a time of changing market conditions or crisis, speed and flexibility take precedence over subject-matter expertise…"

•  In Minnesota, the Star Tribune reports that "Target will extend a $2-an-hour temporary pay bump through July 4 … This is the second time Target has extended the temporary pay increase in recent months. It will also continue through June 30 other pandemic-related benefits such as 30-day paid leave for high-risk employees who are 65 years or older, are pregnant or have underlying health conditions."

The story notes that "the announcement comes as some other companies' hazard pay for frontline workers — who have taken on extra risk and stress working during the pandemic — is set to expire at the end of this month or in early June as many states begin to reopen."

•  Forbes has a piece about New Jersey malls experiencing very different pandemics.

One, the Westfield Garden State Plaza in Paramus, was virtually deserted last weekend - all of its anchor tenants were closed, of course, and only one of the three (Nordstrom) seems to have a viable future.  Anchor tenant Lord & Taylor is preparing to go through liquidation, and anchor tenant Neiman Marcus has filed for bankruptcy.  

Meanwhile, just a couple of miles to the east, the Bergen Town Center had a crowded parking lot - while the mall itself was closed, it has a Target and a Whole Foods that were humming.

Here's the lesson, according to Forbes:  "Having a supermarket, or a Target, Walmart, or Costco, all of which have been allowed to remain open because they sell food, has become a bigger mall status symbol, and survival tool, than having a Saks, Nordstrom, or Neiman’s.

"Another challenged Paramus Mall, Paramus Park, replaced a vacant Sears last year with a supermarket, Stew Leonard’s, that has proven to be a lifeline for the mall during the crisis."

•  The Wall Street Journal has a story about how "national restaurant chains and other stable businesses are prodding their landlords for rent relief as the economic picture sours, setting the stage for court battles and protracted clashes between big tenants and property owners.

"A number of blue-chip companies that made rent payments the past two months have indicated they reached their limit with June. Chipotle Mexican Grill Inc. and Shake Shack Inc. said they are lobbying property owners to renegotiate the leases or offer deferred rent payments. Starbucks Corp. sent a letter to landlords asking for a range of concessions, including changes to lease terms and base rent for at least 12 months, starting next month."

“We are a strong tenant with significant growth ahead of us, and we expect our landlords will partner with us during this difficult time period,” says Chipotle CFO Jack Hartung.

Seems to me that "partner" is the key word here.  Like maybe a landlord could give some lease concessions in the near future in exchange for a share of receipts down the road when business is healthier.  Just a thought…

•  Forbes reports that "New York Gov. Andrew Cuomo announced a new partnership with drugstore giant CVS Health to help double capacity to test for the Coronavirus strain Covid-19 in the state … Cuomo said the state of New York has doubled testing capacity to reach 40,000 diagnostic tests per day as more states and the U.S. government work with retailers, including CVS Health. The drugstore chain and rival pharmacies have stressed they have health professionals and convenient real estate like parking lots to safely conduct Covid-19 tests for Americans."

According to the story, "In the partnership with CVS, testing will come to more than 60 CVS pharmacies that will conduct 50 or more tests per day. The New York partnership comes within days of CVS’ disclosure that it was going to dramatically ramp up testing by processing up to 1.5 million tests every month."

•  Southeastern Grocers, Inc. (SEG), parent company and home of BI-LO, Fresco y Más, Harveys Supermarket and Winn-Dixie grocery stores, together with the SEG Gives Foundation, announced the donation of nearly 258,000 $5 hunger relief bags to Feeding America. The more than $1.28 million worth of food will help provide meals* to neighbors throughout the Southeast who are facing hunger due to the COVID-19 pandemic.

The Wall Street Journal has a piece about how we all can expect air travel to change as a result of the pandemic and resulting restrictions and rules.

"Airports and airlines are rolling out temperature checks for crew and, increasingly, passengers, as well as thermal scans to spot people with elevated body temperatures. Face masks are now de rigueur for travelers across the U.S.

"Passengers on Europe’s biggest budget carrier must raise their hands to use the toilet.

"Forget about the perks of priority boarding at Air France. The carrier is one of several boarding passengers seated at the back of the aircraft first, to limit traffic jams in the aisle. Many airlines are removing in-flight magazines, scrapping meal services on shorter routes, and parking the duty-free cart.

"Getting off the plane at the end of the flight could take even longer than usual as airlines try to control the typical crush, with some saying flight attendants will cue small groups when it’s their turn to stand up."

The story goes on:  "Some of the biggest changes airlines envision are the result of what executives expect will be months, maybe years, of lower demand: They see fewer direct flights, for instance, which means more dreaded stopovers.

"Some airlines are considering requiring passengers to sign health certifications, or to eventually carry 'immunity passports' - documentation that a passenger has had, and recovered from, the virus."

The Journal makes the point that airlines are having to make decisions that take them directly away from policies and tactics of recent years - they are under pressure not to fill their planes, and to permanently eliminate the fees for almost everything that they've been charging.  We talked a lot about this on the Retail Tomorrow Podcast this week, but something else occurred to me when reading the Journal piece.

It seems to me that one of the challenges to the airlines will be to continue providing frequent fliers with the perks and advantages that they're used to.  Which in some ways is ironic, because it long has been said that the airlines were better than most businesses at providing better service to better customers.  That may end up being a real challenge going forward, and I have to wonder if there are some legacy ways of doing business that they'll need to rethink.  Actually the best question is this - how many legacy ways of doing business will they have to change?

Nice piece in the New York Times about Gerald Timothee, an Instacart delivery worker in New York City who, as news about the pandemic spread even faster than the coronavirus, worried about getting sick as he kept delivering groceries.  He called is family in Haiti to, in essence, say goodbye … he thought he was going to die.

"The possibility of getting sick is a reality Mr. Timothee and thousands of other workers in New York City’s gig economy have had to face each day as they venture out onto the city’s streets not only to earn a living, but also to feed other residents.

Yet for many of these workers, their initial terror has been steeled with a sense of duty and pride.  'It’s all about us right now,' Mr. Timothee said.  'We are holding this city together. I feel like a hero'."

There are a lot of them:  "Following a dramatic increase in demand during stay-at-home orders, Instacart’s personal shopper ranks in New York City alone have swelled to more than 14,000 since March, according to company officials, an increase of more than 150 percent.

"The company employs workers to shop for and deliver groceries and other household items ordered online through an app, paying them a fee for each delivery.

"With a more than 400 percent increase in sales since March, Instacart has seen a greater rise since the pandemic than any other company — even Amazon or Walmart. It is one of several on-demand grocery delivery services, including Prime Now, Peapod, FreshDirect, and Shipt, which send legions of delivery people around the city every day."

You can read the story here.

I'm glad Gerald Timothee feels positive about his contribution … because I think we owe people like him a lot for taking risks that we'd rather not take.  They are essential, and their contributions are priceless.

•  The Wall Street Journal reports on how this weekend, for many businesses in summer communities, represents what they hope will be a new beginning - it is Memorial Day weekend and, as one restaurateur tells the Journal, they have roughly 110 days to make enough money to survive for 365 days.

"From Ocean City to the Jersey Shore to Cape Cod, the window between Memorial Day and Labor Day is make-or-break for hotels, restaurants, arcades and T-shirt shops," the Journal writes.  "On top of potential concerns about the coronavirus pandemic, more than 36 million Americans have filed for unemployment benefits, pinching disposable incomes."

Will it be the beginning?  Or just the beginning of the end?  I hope it is the former, but we'll know a lot more based on whether there are new pandemic outbreaks and hot spots as these communities open up.

The New Yorker reports on one perhaps unexpected casualty of the pandemic.


The story says that there have been "an unprecedented series of crises - some existential - faced by zoological parks dedicated to the study and survival of thousands of the Earth’s other animal species.  Unlike entertainment centers, movie theatres, or sports stadiums, zoos can’t simply shut their doors or tell staff to work from home. Zoos still have to feed and care for animals - nearly a million, from six thousand species (a thousand of them endangered or threatened) in the United States alone - at a time in which revenues have plummeted to nothing … In the United States, at least eighty per cent of zoos and aquariums accredited by the A.Z.A. are closed, which means no ticket sales, no merchandise bought for the kids, no stroller rentals, and no food sales, all of which contribute to both zoo programs and long-term conservation worldwide."

The problem, The New Yorker says, is global, and ranges from zoos that are "strapped" to somer that are "devastated."

One interesting byproduct has been how the pandemic has affected the animals, who seem to be experiencing "the kinds of loneliness that people have … In zoos, humans offer a form of sensory stimulus to other species. Without them, the penguins, pandas, elephants, chimpanzees, and even camels and meerkats seem a little bored."

You'd think that people sheltering at home during the pandemic would lead to more book sales.

But not so much.

The New York Times reports that "even the publishing world hasn’t been immune to the economic fallout from the pandemic. U.S. book sales across all categories fell more than 8 percent in March, compared with March 2019, a decline that reflected the challenges publishers face in a ravaged retail landscape.

"The steepest declines were in educational publishing, a likely result of the mass closures of schools and colleges. Revenue from prekindergarten through 12th grade instructional materials was half what it was a year ago, while course materials for higher education fell more than 8 percent. Books from university presses saw a decline of more than 21 percent."

More detail from the Times:  "Some categories, like digital audio, which has been one of the fastest-growing formats in recent years, seemed almost pandemic-proof, with a jump of 15 percent. Downloaded audio for children grew by nearly 50 percent, as parents who are sheltering at home with children turned to audiobooks for entertainment. Somewhat surprisingly, e-book revenues dropped by nearly 5 percent, and print revenues grew by more than 1 percent."

From TechCrunch:

"The coronavirus outbreak has driven more consumers to turn to their smart speakers for news, information, music and entertainment, according to new data released today by NPR and Edison Research. Around three-quarters of U.S. adults 18 and up said their routines have been impacted due to COVID-19 and their media habits have changed as a result. Since the outbreak, 35% of U.S. smart speakers owners say they’re listening to more news and information through their device, and 36% say they’ve increased their consumption of music and entertainment.

The story goes on:  "Smart speaker owners working from home during the COVID-19 outbreak were also more likely than smart speaker owners in general to make requests for news from their device on a weekly basis, but not as likely to ask for the weather, the time, or other updates.

"In the work-from-home group, 65% said they use the device — at some point — to listen to the news while 62% of all smart speaker owners said they do."

Business Insider reports a Maryland seafood restaurant, Fish Tales, "is adding a new dining experience to its bar and restaurant called 'bumper tables.'  The tables are on wheels, and guests can move about freely in a six-foot inner tube.

The story says that "Revolution Events designed the tables in response to the coronavirus and experienced a surge of interest after the design was unveiled."

•  MarketWatch has the story of a Costco store manager who is caught on video explaining to a customer that he must wear a mask, only to be told that he would  not, because, "I woke up in a free country this morning."

The Costco manager then took away the customer's shopping cart and asked him to leave the store.

MarketWatch notes that the video was posted on Reddit, apparently by the customer, then deleted - the story suggests that when the customer posted it, he thought he'd get a positive reaction.  He didn't, and later posted a note explaining his position:  “I got every f---ing right to not wear a mask … This isn’t about wearing a mask, it’s about control. I’m not the f---ing sheep... I was one of the only people in that store not wearing a mask.”

I'd like to reiterate the basic reaction to the video that I saw online, and the messages that most people seem to be sending to that customer.

Yes, you woke up in a free country.  You're free to shop elsewhere, and Costco is free to do what it feels is necessary to protect the health of its employees and other shoppers, who are behaving in a socially responsible way.

Freedom carries with it responsibilities to your community and the requirement that you obey certain rules - you have to register your car, obey traffic signals, wear clothing when in public, etc…  In a time of national emergency, when a pandemic has killed close to 100,000 people in the US in just a few months, and more than 300,000 people globally, there is nothing wrong or even anti-freedom with imposing a few rules to prevent the spread of the disease and help our fellow freedom-loving citizens.

However, you are free to continue being a moron.

More evidence of how the pandemic and its impact on various businesses is playing out…

Variety reports that Greyhound, the new Tom Hanks World War II movie that was scheduled to come out in theaters for Father's Day weekend, has been acquired by Apple TV and now will be available for streaming on the service.  No release date yet has been announced.

The story points out that "Greyhound joins a growing list of movies that were originally slated for theatrical release, but then opted for a digital debut after the coronavirus pandemic resulted in most U.S. movie theaters remaining closed until July at the earliest."

The question is the degree to which this reflects a change in consumer behavior that will be sustained, not short term.  I think it is going to be more and longer than expected.