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Jon Springer
Watch It Fly
As we've noted, robotics seem very likely to see even more rapid adoption in grocery retail following the coronavirus pandemic. One of the more creative technologies out there are the flying inventory drones of Pensa Systems.

That company captured the accompanying video illustrating not only that people at this store seem too desperate to eat anything for breakfast except for Chex (just kidding!) but also how the grocery supply chain took a beating in the early onset of the coronavirus and with real-time visibility that comes with robotics, can help to get it right back up again. 

Pensa says this need for real-time planning and predictions won't go away when the hoarding dies down.
Jon Springer

A Deadly Threat
It seemed only a matter of time before the death toll of the coronavirus hit the industry directly. 
Reports this week indicated at least four industry workers—a Trader Joe's worker in Scarsdale, N.Y.; a Giant Food employee in Olney, Md.; and two Walmart workers from the same Chicago area store—have joined the more than 10,000 Americans to have died from the coronavirus, underscoring the intensifying efforts from the industry to enact worker and customer safety measures, and the deadly cost of the pandemic.

Jon Springer
Is Higher Pay Here to Stay?
Hazard pay raises and worker bonuses have swept the industry in recent weeks as workers face the danger of the coronavirus, but nearly all the raises announced thus far have been temporary in nature. 

Could higher pay become permanent? That's possible too. 

Natural Grocers by Vitamin Cottage said this week that $1 of the "temporary" $2-per-hour raise it offered hourly store and bulk manufacturing employees through May 3 would be a permanent pay increase. That announcement came as the Lakewood, Colo.-based natural foods retailer updated a range of new safety measures (reduced store hours, customer capacity constraints, new hires and company-provided safety equipment, where available) that many of its peers have also announced.

For the industry, the pandemic arrived during a period in which many retailers have or might have been increasing hourly pay anyway for multiple reasons: low unemployment and pressure from states, localities and labor groups to adopt higher minimum wage standards on the one hand, and on the other, a seeming wave of "right-sizing" initiatives—many of those now, like the bonus pay, temporarily on hold. In the latter cases we saw companies such as Kroger, Walmart and Hy-Vee taking lessons from flatter and more efficient organizations—Costco and Aldi for example—demonstrating that one advantage of a low-cost operating model is they can afford to pay fewer workers more—and not more workers less.

For the moment, though it's more and more.
Jon Springer
In a tradition dating back to founder Sam Walton, Walmart makes a show of its annual meeting including events for investors, shareholders, journalists and thousands of Walmart workers from around the world treated to early-morning performances from entertainment stars, but COVID-19 will interfere this time around.
In a tradition dating back to founder Sam Walton, Walmart makes a show of its annual meeting including events for investors, shareholders, journalists and thousands of Walmart workers from around the world treated to early-morning performances from entertainment stars, but COVID-19 will interfere this time around.   credit: WGB Staff 
Walmart Calls Off Associate Gathering; Annual Meeting Goes Virtual
Walmart, which traditionally combines its annual business meeting with a glitzy gathering of associates from around the world, who pack the Bud Walton Arena in Fayetteville, Ark., for a star-studded celebration, won't be doing so this year.

The retailer said the event, whose past guests included the likes of Tom Cruise, Rod Stewart, James Corden and other stars of the entertainment world, will be called off, citing coronavirus concerns. The annual business meeting will be held virtually on June 3.

"The logistics and lead time required to coordinate 5,000 associates traveling from around the world to attend both the Friday meeting and corresponding Associates Week events has created too much uncertainty to ensure everyone’s safety given the current state of the coronavirus pandemic," the Bentonville, Ark.-based retailer said in a release today.
Kat Martin
One Way Is the New Way

The coronavirus has wrought many changes in stores, including new sanitation practices and battle pay for staff. The latest change: one direction aisles.

Retailers large and small are implementing this new traffic pattern because traditional grocery aisles are too narrow to allow for the proper 6 feet of social distancing. Hy-Vee is placing new, one-way directional signage in its aisles that will be installed in all stores, along with a request for one person per cart in the store. The stores’ signage will direct customers to use aisles in a way that prevents them from passing each other. DeCicco & Sons, with eight stores in Westchester County, N.Y., also is converting its aisles to one direction.

Kroger also announced plans to test one direction aisles in some of its stores, and Walmart also announced over the weekend it was changing its stores to one direction after testing the concept in the United Kingdom and Canada.

Industry experts have long bemoaned the setup of the center store by forcing customers into tunnel-like aisles. Maybe this pandemic will have the added outcome of forcing retailers to rethink the setup of the center store aisles into something that is actually enjoyable to shop.
Jon Springer
credit: Southeastern Grocers/Winn-Dixie
credit: Southeastern Grocers/Winn-Dixie
credit: Southeastern Grocers/Winn-Dixie
Save the Last Dance

The U.S. grocery industry workforce includes many thousands of teens, who are balancing suddenly essential part-time jobs with school—and seeing their lives impacted in other ways by COVID-19.

In Palm Bay, Fla., for example, the high school prom has been canceled. But workers at a Winn-Dixie store there made sure their co-workers who would have attended didn’t miss all the pageantry. They pitched in to surprise them with corsages, boutonnieres and a special prom photo booth at their store.

How great is that? Thanks to Winn-Dixie for the pics, and to the workers for taking care of their communities and one another.

Jon Springer
A Cart-to-Cart Talk
I never fail to marvel at the operating efficiency at work at discounters like Aldi, but even that has not been spared from the coronavirus.

In an update to shoppers issued this week, the Batavia, Ill.-based discounter said—among other things—that as a safety measure it would no longer be executing the "cart-to-cart" switch at its checkout lines, where items coming from a shopping cart at the front of belt are loaded into an empty waiting cart on the back end. 

In normal times that little trick—where the cart you pushed into the store becomes the one the person behind you in line ultimately rolls out of the store—saves Aldi precious seconds on checkout speed. Executed hundreds of times a day, in thousands of stores, that adds up to labor savings supporting pricing. 

Visitors to Aldi today, and throughout the length of the crisis, will now have to reassemble their checked items in the same cart they brought in.
Jon Springer
Dollar Tree Withdraws Guidance on Cost and Sales Volatility

While the onset of the coronavirus pandemic drove huge initial demand, for some retailers, the gains could be short-lived, costly and complicated.

The discounter Dollar Tree, for example, on March 31 withdrew financial guidance for its first quarter and fiscal year noting that the combination of abnormal shopping patterns and increased safety measures drew down inventory at stores, upended its usual mix of sales, and turned quarterly comp gains into a stark weekly decline at the Dollar Tree banner.

At the single-price-point Dollar Tree, stores comp for the week ending March 29 fell by 19.4%, despite being up by 7.7% in the quarter to date. Performance was steadier at its multiprice Family Dollar sister, but that chain also saw weaker recent performance, with comps of 14.4% for the quarter to date but 8.8% in the last week.

The company said both banners are facing merchandise mix pressure to gross margin rates in the quarter. And costs are expected to be higher than previously anticipated, including investments in pay and benefits, distribution and transportation related to the demand volume increase in consumables, and the additional hours dedicated to enhanced cleaning protocol in stores, distribution centers and its store support center.

Jon Springer

The Ultimate Proving Ground

This might not have been the way it would have chosen to demonstrate it, but the COVID-19 crisis could prove the thesis behind United Natural Foods Inc.’s (UNFI) eventful pursuit of rival Supervalu—and emphatically so.

From the start, officials of the Providence, R.I.-based natural foods distributor had argued that the $2.9 billion acquisition of its larger conventional counterpart—announced in 2018—would set it up to serve an industry that would demand more stuff from fewer suppliers, and favor those that could handle that kind of volume nationally. And in distribution, more volume means better economics, better economics means better pricing, which means more volume. It’s how it was meant to work.

UNFI has taken plenty of lumps along with the deal. It tangled with its own financial adviser on how the deal got funded, it discovered Supervalu had more issues going in than it knew, it hasn’t sold off Supervalu’s retail stores as quickly or for as much as it might have wanted, and its performance last year missed expectations so badly out of the gate officials walked back financial projections they’d made only months earlier.

Barclays analyst Karen Short, who hosted UNFI officials in a recent call, in a research note this week indicates UNFI believes the crisis is bringing with the ultimate proving ground for its thesis. Its natural food customers are buying more conventional, and vice versa, and retailers are using UNFI’s efficient national footprint to move product throughout the country. Officials also believe they are in for a prolonged shift in demand for food-at-home—12 to 24 months—as it expects the virus, as it travels, could lead to additional demand “humps” over time. 

Meg Major

Onfleet Launches Free Job Board to Connect Delivery Drivers With Companies That Need Help Meeting Demand

In response to the COVID-19 pandemic, last-mile delivery management software startup Onfleet has rolled out a free job board to connect delivery drivers looking for work with companies that need delivery help.

“COVID-19 continues to disrupt communities around the world in unprecedented ways,” said Khaled Naim, co-founder and CEO of San Francisco-based Onfleet. “As we examined the impact across Onfleet’s customer base, we noticed that some of our customers were struggling to expand fast enough to meet an unexpected surge in demand, while others unfortunately had to let drivers go because demand declined in their industry. So we decided to create an easy way to connect drivers and hiring companies.”

Onfleet’s free job board allows drivers to sign up to deliver for companies in their area or browse jobs posted by companies. Similarly, companies can post jobs or browse through drivers in their area who are available to work.

“We hope this becomes a valuable resource for drivers and employers,” said Naim, who noted that in the first few hours after the board launched, a dozen companies had already listed openings.