April 2021: National News

National Notes

April 2021

Visa and Mastercard Postpone New Fees

Visa Inc. and Mastercard Inc. are postponing plans to boost the fees U.S. merchants pay when consumers use credit cards online, pushing back the changes another year to April 2022 because of the pandemic.  Retail associations have been pushing back to delay interchange fees saying now is not the time to punish retailers with higher fees.  In particular, retailers have said hiking fees when moe consumers go online would add insult to injury.  Retailer calls have reached U.S. Senator Dick Durbin who had previously helped limit fees.  As a result, Mastercard is pushing its plans to increase fees back and has vowed it would “continue to be more thoughtful” regarding the timing of implementing new fees.  Bloomberg Intelligence suggests the move to be wise at a time of a Democrat-controlled senate.

When Visa first unveiled the changes, it said the interchange rate for so-called card-not-present transactions, which include those made online or over the phone, would rise. For a traditional Visa card, the fee on a $100 transaction would climb to $1.99 from $1.90. For premium Visa cards, the fee would increase to $2.60 from $2.50.  The changes, originally slated to take effect last April, were delayed until this April.  Now the changes will be delayed until April 2022.


Amazon About to Upset Healthcare

Amazon Care is about to be rolled out.  This is healthcare in a virtual and real world.  People will be able to access virtually or real ways.  Its components include:

1) Virtual care, which connects patients to medical professionals via the Amazon Care app (available for both Android and iOS) and allows patients to quickly, conveniently, and confidently chat live with a nurse or doctor, via in-app messaging or video and

2) In-person care, whereby a medical professional can be dispatched to a patient’s home for additional care, ranging from routine blood draws to listening to a patient’s lungs, and prescriptions can be delivered right to a patient’s door.

Amazon Care can be accessed 24 hours per day through messaging or video.  It is anticipated one could connect with a healthcare professional within 60 seconds.


Walmart Promises Raises for 425,000 Workers

Walmart said it would raise pay for hourly U.S. workers to an average above $15 an hour.  This after a strong holiday season and year boosted pandemic online sales.  At the time of this article Walmart stock fell 6% in trading.  Raises will affect 425,000 U.S. employees.  It is interesting to note the Biden’s administration’s plan to raise the federal minimum wage to $15 dollars per hour, although the proposal did not make it as part of the $1.9 trillion dollar stimulus plan.    Walmart Chief Executive Doug McMillon said the company supports raising the federal minimum but there are parts of the country that should be lower than others, and increases should be paced out. The company is keeping its starting wage at $11 an hour. The country’s largest private employer said its more-targeted raises would increase pay for its hourly U.S. workers to an average above $15 an hour, up from an average above $14 in January 2020. Walmart employs about 1.5 million hourly U.S. workers and 2.2 million people world-wide.


Walgreens Gives Three Million Vaccinations

Walgreens has given more than 3 million COVID-19 vaccinations.  For the most part, these were given to those in long-term care facilities and vulnerable populations.  The news comes as Walgreens has begun administering in-store vaccinations in many locations as part of the federal vaccination program.  The Federal Retail Pharmacy Program is being undertaken in addition to Walgreens’ work directly with states and jurisdictions to administer COVID-19 vaccine allocations in store and at off-site clinics. 

Drug Store News

Walmart Launches COVID-19 Vaccine Drive

Walmart is hosting a series of community events across the country to administer the COVID-19 vaccine.  This in an effort to increase vaccination rates in vulnerable communities.  The U.S. Centers for Disease Control and Prevention (CDC) is providing Walmart with an allocation of the vaccine for this new effort, which Walmart is launching in partnership with local community leaders and nonprofit organizations.  These new events mark an expansion of Walmart’s role with the Federal Retail Pharmacy Program and are supplementing the retailer’s ongoing vaccination program at more than 1,400 pharmacies nationwide in 35 states, Puerto Rico and Washington, D.C., through federal and state efforts.

Walmart plans to continue these new events over the next several weeks as vaccine allocations allow and is currently planning them in the following states: Alabama, Colorado, Florida, Georgia, Idaho, Indiana, Louisiana, Minnesota, Mississippi, Missouri, Nevada, Oklahoma, Pennsylvania, South Dakota, Tennessee, Texas, Utah, and Virginia.  People can use the digital scheduler at walmart.com/COVIDvaccine.

Mass Market Retailers

Target will Invest $4 Billion on Store Expansion and Remodels

Target Corp. will build on its record 2020 sales growth by making big annual investments to continue scaling capabilities across its online and brick-and-mortar retail platform.  Target plans to invest $4 billion per year.  This will include opening up to 40 stores, store remodels, and to enhance its fulfillment centers and strengthen its supply chain.  Target is coming off a record year during which its sales grew more than $15 billion, greater than its total sales growth during the prior 11 years 

Chain Store Age

Walmart Commits to U.S. Manufacturing

Walmart will spend $350 billion in the next 10 years on items made, grown or assembled in the U.S.  Walmart estimates that this spend will support more than 750,000 new American jobs.  As part and parcel of this initiative, Walmart will work to identify barriers to U.S. manufacturing then work to overcome to barriers in order to increase U.S. manufacturing.  In addition, Walmart believes it will reduce millions of tons of CO2 emissions by being closer to increased manufacturing in the U.S.

Chain Store age

Online Sales Increase

U.S. retail sales grew 4.6% in February according to Mastercard SpendingPulse.  Online sales grew 54.7% compared to 2020.  Mastercard SpendingPulse, which measures in-store and online retail sales across all forms of payment, notes that its sales figures for February were adjusted to account for the leap year in 2020. Without the seasonal adjustment, the total retail sales growth would be 1%.  The increase was particularly impressive given the winter storms which affected large swaths of the country which paralyzed deliveries. 

A series of winter storms during the week ended February 20 did significantly affect retail activity across the South, and particularly in Texas. Mastercard SpendingPulse analysis shows how the extreme winter freeze impacted retail sales locally and at the national level.

On February 17, Dallas, Austin and Houston all had year-over-year total retail sale declines of 35% to 50% as retail locations closed amid the crippling cold. With Texas typically accounting for approximately 10% to 11% of U.S. retail sales volume, this widespread event pulled the national growth rate down by 2.2% for the week.

At a national level, Mastercard SpendingPulse said key retail trends from February include:

Grocery Aisle Touchdown: With more people watching football’s big game from home, Grocery spend was up 30% the three days prior. That contributed to the Grocery sector growing +12.4% YOY for the month.  Love is in the Air—and in the Mail: Also known for being the month of love, February saw Jewelry spend rise +5.9% and +63.1% online YOY. Restaurant spend remained down (-13.5%) but has showed improvement over the past two months.  Cabin Fever Leads to Home Enhancements: No big surprises here, as Furniture & Furnishings (+8.6%) continued to post solid gains as seasonally cooler weather led to home improvements and décor projects.  Apparel Shopping Continues to Shift Online: While Apparel sales were down -5.3% overall, Apparel e-commerce sales grew +47.3% YOY. This month, 73.9% of all Apparel purchases were made online; a year.  Stimulus Sales Lift Continued, though Fading: The infusion of stimulus payments in early January appeared to boost consumer spending in January and through early February, though the impacts have waned.


Kroger Invests in Upcycled Food Startups

Kroger, through its Zero Hunger/Waste initiative,  plans to invest $2.5 million in collective grants to startups that support new ways to manufacture, process or distribute upcycled consumer food products.  Kroger believes upcycled is the next food frontier.  As a result, Kroger’s has asked for proposals that sources food and food byproducts into new consumer-facing products.  Chosen participants will receive up to $100,00 thousand in upfront seed money and support to bring ideas into reality.

Progressive Grocer

Kroger Posts Strong Fourth Quarter Results

Kroger Co. reported solid fourth-quarter results that included an identical store sales gain  of 10.6% (excluding fuel) and digital sales growth of 118%.  Total company sales were $30.7 billion in the fourth quarter, compared to $28.9 billion for the same period last year. Excluding fuel and dispositions, sales grew 10.7%. For the fourth quarter, Kroger reported adjusted earnings per share of $0.81 and an operating loss of $158 million, which included a $989 million charge for UFCW pension commitments. Total company sales were $132.5 billion for the full year in 2020, compared to $122.3 billion for the same period last year. Excluding fuel and dispositions, total sales grew 14.2%.


Organizers Work to Unionize Alabama Amazon Location

Organizers are working to organize nearly 6,000 Alabama warehouse workers in Alabama.  President Biden said he was watching and indicated his support.  While Biden did not specifically name Amazon, it was clear he was talking about Amazon.  Biden said, “Workers in Alabama — and all across America — are voting on whether to organize a union in their workplace,” he tweeted, along with an accompanying video. “It’s a vitally important choice — one that should be made without intimidation or threats by employers.”  A union victory in Alabama has the potential to change things for those running large warehouses.  Amazon is not supportive of the union’s efforts. 


Walgreens administers 5 million COVID vaccinations

Walgreens announced on Tuesday that it has provided approximately 5 million COVID-19 vaccinations across long-term care facilities, in stores and through dedicated clinics. Additionally, the company has completed over 60,000 clinics at long-term care facilities and vaccinated the majority of residents and staff that opted to receive a COVID-19 vaccine from Walgreens.

Walgreens continues to receive approximately 1 million COVID-19 vaccine doses from Johnson & Johnson, Moderna and Pfizer this week as part of the Federal Retail Pharmacy Program. Over the last two weeks, the Centers for Disease Control and Prevention (CDC) has added 16 additional states to those Walgreens is supporting as part of the federal program, for a total of 43 states and jurisdictions including:

Alabama,* Alaska, Arizona, California, Chicago, Colorado,* Connecticut, Delaware, Florida,* Georgia, Idaho,* Illinois, Indiana*, Kansas* Kentucky, Maine, Maryland, Minnesota,* Mississippi,* Montana*, Nevada, New Hampshire, New Jersey,* New Mexico, New York, New York City, North Carolina, Ohio, Oklahoma,* Oregon, Puerto Rico, Rhode Island*, South Carolina,* South Dakota,* Tennessee,* Texas,* U.S. Virgin Islands,Utah, Vermont, Virginia, West Virginia, Wisconsin and Wyoming.

As it continues its vaccination efforts, Walgreens is launching the Vaccine Equity Initiative, aimed at increasing access to vaccinations, providing education to address vaccine hesitancy and creating partnerships to meet community needs. It also has undertaken a partnership with Uber to help with transportation to vaccine appointments, and is working to advance the rideshare company’s partnership with the Chicago Urban League and others to enable educational outreach in socially vulnerable communities. The retailer also is working to ensure that roughly half of its stores participating in the Federal Retail Pharmacy Program are located in medically underserved areas. Alongside vaccinations, the company is working to offer COVID-19 testing at more than 5,000 locations by April 1, with more than half of the stores located in socially vulnerable areas. 

MMR & Drug Store News

Target Is Launching Another Powerhouse Grocery Brand

Target is launching a new grocery brand that is chock full of the innovative food products of tomorrow.

On April 5, the retailer plans to debut Favorite Day, a new owned food and beverage brand. The Favorite Day assortment will include more than 700 sweet and savory products spanning categories such as bakery, trail mix, ice cream, snacks and more, all priced below $15.

Favorite Day will expand on Target’s portfolio of private brands and build on the success of Good & Gather, Target’s flagship food and beverage brand, launched in 2019, that is now generating $2 billion in annual sales.  The Good & Gather assortment includes more than 2,000 products across food and beverage from dairy to produce, ready-made pastas and meats to granola bars and sparkling water. All of the products under the Good & Gather brand are made without artificial flavors and sweeteners, synthetic colors and high fructose corn syrup, and are also backed by a money-back guarantee. With the new launch, Target will now offer Good & Gather, Favorite Day and Market Pantry as its grocery private labels.

Progressive Grocer

Kroger Health Boosts Vaccination Capacity

Kroger Health has increased its capacity to administer the COVID-19 vaccine, and can now deliver one million doses per week through in-store pharmacies and clinics, and mass vaccination off-site events.  To vaccinate more Americans more quickly, Kroger Health will dedicate the first hour of pharmacy operations each day to administering the three FDA-authorized vaccines. Patients can continue to schedule appointments for various times, but the morning focus hour will allow for additional COVID-19 vaccines to be administered. To accomplish the administration of one million doses per week, the plan requires the activation of all pharmacies and clinics within Kroger Health’s national network and ongoing and expanded partnerships with federal, state and local governments and health officials. Kroger Health will launch the new focus hour this week in Ohio, with additional states to follow next week as soon as vaccine accessibility and supply increases.

Beginning this month, Kroger Health is planning 100 mass vaccination off-site events nationwide to expand its vaccination efforts, starting with partnerships in Kentucky and Ohio. Throughout the pandemic, Kroger Health has remained an industry leader in offering diagnostic COVID-19 testing solutions, supportive care services and vaccine administration, supported by its team of experienced healthcare providers. The company was the nation’s first retailer to offer rapid antibody tests to customers. Now, the significant increase of COVID-19 vaccinations deepens Kroger Health’s commitment to slowing the spread of COVID-19 and helping America heal.


Kroger Expands its Indoor Farming Program

A new 70,000-square-foot indoor farm and three other facilities operated by 80 Acres Farms are now supplying fresh produce to 316 Kroger locations across Ohio, Indiana and Kentucky.

The newest 80 Acres Farm’s facility combined with three smaller locations have the capacity to grow 10 million fresh produce servings annual. That level of production is aided by the newest facility, which features grow benches that are arranged in a 10 by 10 configuration and stacked 10 levels high to maximize efficiency. The other three facilities are 10,000, 12,000 and 30,000 square feet.

The technology used by 80 Acres Farms means the company can grow pesticide-free produce all year long with a substantially reduced environmental footprint. For example, the company’s facilities use 97% less water than traditional growing methods. With locations closer to customers, the farm-to-table carbon footprint and overall food waste are low.

Progressive Grocer

Walmart Teams With TikTok on ‘Spring Shop-Along’

Walmart hosted a livestream event on TikTok.  The event included Gabby Morrison (@GabbyMorr), who has more than 3.5 million followers on TikTok, revealed favorite Walmart beauty items who demonstrated their skin care, makeup and hair routines using the products. Viewers were able to shop from a range of national, private and Black-owned beauty brands, among them NYX, Maybelline, The Lip Bar, Bliss, Kim Kimble and Marc Jacobs fragrances, while at the same time they received beauty tips and info on popular trends.

Progressive Grocer

Walgreens Automates COVID-19 Vaccine Scheduling

Walgreens is extending access to COVID-19 vaccine information and scheduling with an artificial intelligence (AI)-based bot.  Walgreens, who received a federal allocation of more than 480,000 vaccine doses for distribution across 26 U.S. states and jurisdictions, is now deploying an intelligent conversational voicebot from Nuance Communications. The voicebot will help customers schedule their COVID-19 vaccine appointments 24 hours a day, seven days a week, beyond Walgreens’ existing web-based vaccine portal.

Chain Store Age

Consumer Sentiment Rises to Highest Level in a Year

Consumers’ spirits are getting a boost from the COVID-19 stimulus checks and the growing number of vaccinations.  The initial reading of consumer sentiment rose to 83 in early March from 76.8 in February according to an index produced by the University of Michigan. It was the index’s highest level in a year.  The March gains were not equally shared across all index components. In particular, consumers’ judgements about their own financial situation posted no gains in early March, largely due to very small expected gains in household incomes during the next year. In contrast, prospects for the national economy improved significantly. 

Chain Store Age

California Grocers Association Sues Over Pay Mandates

The California Grocers Association (CGA) has filed federal lawsuits against the cities of Daly City and San Jose challenging grocery pay mandate ordinances approved in those cities.  The Daly City and San Jose lawsuits allege similar violations of law as cases filed by CGA in Long Beach, Montebello, Oakland, San Leandro and West Hollywood. Daly City has mandated an additional $5/hour and San Jose $3/hour in extra pay for a select group of grocery store employees.  The moves by CGA come a few days after Kroger Co. said it would close two Ralphs stores and one Food 4 Less store in Los Angeles, a decision accelerated by a new city council mandate that requires extra pay for front-line workers. According to a statement from Kroger, the mandate will add an additional $20 million in operating costs over the next 120 days, making it financially unsustainable to continue operating the underperforming locations. 

Progressive Grocer

Walmart working with fashion designer Brandon Maxwell

BENTONVILLE, Ark. — Walmart announced Tuesday that acclaimed American fashion designer Brandon Maxwell is collaborating with the retailer as creative director for Free Assembly and Scoop, its exclusive, elevated fashion brands. This collaboration is a first for Walmart’s private brand apparel business, which has successfully expanded its assortment to include quality, on-trend and accessible fashion to help customers outfit their closet no matter their personal style or budget.

Brandon Maxwell

Known as one of the industry’s leading American fashion designers, Maxwell will act as Creative Director for Free Assembly and Scoop, driving the design of seasonal collections for men’s, women’s, children’s and accessories. In his role, he will be responsible for collection design and providing input into material selection, sourcing and production. He will also be involved in brand marketing initiatives and campaigns for both elevated brands.

“Working with Walmart has long been a dream of mine. Like many people across the country who live in a small town, Walmart was the destination for everything where I grew up in Texas, including clothing,” said Brandon Maxwell, creative director for Free Assembly and Scoop at Walmart. “This partnership allows me to bring the experience and joy of fashion to countless people who live in small towns across the country. Everyone deserves to have access to well-designed clothing at an accessible price point. I am energized by this collaboration with Walmart, as it is not only an opportunity to make exceptional design accessible to all but with our charitable initiatives, we will work to help people improve their lives. That is after all the most fashionable thing we can do.”

Born and raised in Longview, Texas, Maxwell is known for his red-carpet gowns and award-winning runway creations. He began his fashion journey as a child playing under the racks of the clothing store where his grandmother worked in Texas. This experience laid the foundation for a career in fashion styling and the launch of his eponymous brand BRANDON MAXWELL. Like Walmart, Maxwell believes that everyone should have access to beautiful clothing that makes them look and feel their best.

“Brandon is a powerhouse in the fashion industry. His designs are beautiful, youthful, timeless and expertly tailored,” said Denise Incandela, executive vice president, Apparel and Private Brands, Walmart. “Our shared fashion values of accessibility and commitment to incredible design and quality make him an ideal partner for Walmart. Bringing his distinctive design talent to our elevated brand collections of Free Assembly and Scoop, allows Walmart to offer customers stylish, high-quality fashion at an extraordinary value.”

Maxwell will oversee four seasonal collections annually for Free Assembly and Scoop. He will start by influencing the Holiday 2021 collections before his full collections drop in Spring 2022. Launched in Fall 2020, Free Assembly is a modern, fashion essentials clothing brand that offers elevated style with a focus on thoughtful, simple design at an incredible value. Scoop, the legendary fashion boutique re-imagined as a Walmart exclusive brand in Fall 2019, is a trend-inspired fashion brand, featuring elevated details to help customers build their “Ultimate Closet” at an affordable price.

As a part of this partnership and his ongoing commitment to giving back to the community, Maxwell has also designed a line of face masks available exclusively at Walmart starting today. Timed to this launch of Maxwell’s exclusive face masks, Walmart will donate $100,000 to DonorsChoose.org, a charity selected by Maxwell for its dedication to helping public school teachers get the funding they need for materials and experiences that will help their students learn.