February National Notes

U.S. Remains Biggest Retail Market; Widens Lead Against China

The U.S. remains the largest retail market in the world.  This in reflection of U.S. stimulus efforts and the resilience of American consumers.  Sales will rise 0.8 percent, reaching $5.506 trillion according to eMarketer.  The increase represents $612.20 billion more in sales than eMarketer had expected (and a $41.20 billion increase over 2019).

It was initially thought China may overcome the U.S. as the biggest consumer market due to pandemic forces.  However, the scenario has not played out as anticipated. China’s retail market is now forecast to fall by 2.9% (compared with a previous forecast for a 4.0% decline). China’s retail sales in 2020 are expected to reach $5.130 trillion in 2020, down from $5.283 trillion in 2019.

Chain Store Age

Organized Retail Crime Continues to Rise.
  
Dollars lost to organized retail crime (ORC) topped the key $700,000 per $1 billion in sales threshold for the fifth year in a row, according to the newly released 16th annual ORC study from the National Retail Federation. Seventy-five percent of surveyed loss prevention executives at a cross-section of large and mid-sized retail companies said ORC activity had increased in the past year, up 10 percent from 68 percent in 2019.  The study also found that ORC losses averaged $719,548 per $1 billion in sales during 2020, up 2% from 2019 and up nearly 60% from the $453,940 per $1 billion average reported in 2015.  The top five cities for ORC in the past year in order were Los Angeles, Chicago, Miami, New York and San Francisco.

Many states have raised the threshold of what constitutes a felony, which have allowed criminals to steal more prior to being charged with a felony.  Among retailers surveyed, 64 percent have seen an increase in average ORC case values in states where that has happened, up 25 percent from 51 percent who said the same each of the past two years.

Chain Store Age

Speed is Focus of Home Depot’s Newest Distribution Center

Home Depot’s newest distribution center is designed for speed.  The new distribution center will support faster replenishment to stores across the Southeast region. The 657,600-sq.-ft. center, located in Locust Grove, Ga., opened on Dec. 14. It features innovative enhancements to save time, increase output and efficiency, and promote environmental sustainability, the company said.  “Our ability to adapt and scale to this high-demand environment is a testament to both the investments we’ve made in the business, as well as our associates’ focus on our customers,” said Paul Larkin, VP of supply chain.  The new facility includes a zero-emission hydrogen fuel cell charging station, described as a sustainable and more efficient way to power material handling equipment, automated trailer check-in and wider conveyors to help the building move high volumes of products faster than ever before.  The center is part of the retailers plan to update many of its distribution centers.

Chain Store Age

Target Offers COVID-19 Access to Paid Leave

Target is trying to help workers in time of COVID-19 by offering an additional $2 dollars per hour until May 2nd, and for team members aged 65 or older, team members who are pregnant, and those with underling medical condition access to 30 days paid leave.  Additionally, 20,000 hourly team leads will receive bonuses which range from $250 to $1,500.  Lastly, Target will commit $1 million to the Target Team Member Giving Fund, and they will donate $9 million to relief and assistance to organizations aiding in responding to the virus.

Chain Store Age

CVS Administers 1st COVID-19 Vaccines in Long-Term Care Facilities

CVS has begun to administer Pfizer’s vaccine in 12 states.  In addition, CVS plans to administer the vaccine to staff and residents to four million residents and staff in 40,000 facilities.  Teams from CVS Pharmacy will be on hand to make three visits to each facility, ensuring residents and staff receive the initial vaccine, as well as a booster. The overall plan is to have staff and residents vaccinated between three to four weeks after the initial visit, the company said.

States that will be receiving the vaccination before January include Connecticut, Florida, Kentucky, Maine, Maryland, Nevada, New Hampshire, New York, Ohio, Oklahoma, Oregon and Vermont.  An additional 36 states, including the District of Columbia will begin their vaccinations on Dec. 28.

Chain Store Age

Half of all U.S. States Raising Minimum Wage in 2021

Half of all U.S. states raising minimum wage in 2021 – here is the list:

  • Alaska: Up to $10.34 per hour, based on a 1.4 percent increase in the cost of living.
  • Arizona: Up to $12.15 per hour starting in 2021 based on the Consumer Price Index..
  • Arkansas: Up to $11 per hour.
  • California: Up to $14.00 per hour, for businesses with 26 or more employees; $13.00 for smaller employers.  
  • Colorado: Up to $12.32 per hour. Denver’s local government is increasing the minimum wage to $14.77 with another increase to $15.87 happening in 2022.
  • Connecticut: Up to $12 per hour, scheduled to increase to $13.00 on August 1, 2021
  • Florida: Up to $8.65 per hour increasing to $10.00 on September 30, 2021.
  • Illinois: $11.00 per hour, from $10.00.
  • Maine: Up to $12.15 per hour, from $12.00.
  • Maryland: In 2021, the minimum wage is $11.75 for large employers and $11.60 for small employers.
  • Massachusetts: Up to $13.50 per hour, an increase of 75 cents.
  • Minnesota: Up to $10.08 per hour (from $10.00) for employees of large employers with an annual gross volume of sales not less than $500,000. Small employers must pay employees a minimum wage of at least $8.21 per hour (up from $8.15).
  • Montana: Up to 8.75 per hour, up 10 cents.
  • Nevada: For employees who do not receive health benefits, minimum wage to increase to $9.75 on July 1, 2021.  For employees who do receive health benefits applies, to increase to $8.75 on July 1, 2020.
  • New Jersey: Up to $12.00 per hour for most employees, from $11.00 per hour.
  • New Mexico: Up to $10.50 per hour, from $9.00.
  • New York: The state of New York will increase its standard minimum wage to $12.50 in 2021, except for fast-food workers in the state, whose minimum wage will be increased to $15 on July 1, 2021. Also, tiered/rates vary by region: $15.00 per hour in New York City; $14.00 per hour in Nassau, Suffolk and Westchester counties (then $1.00 each year after, reaching $15.00 on December 31, 2021); $11.80 per hour in remainder of the state.
  • Ohio: Up to $8.80 per hour, up 10 cents from $8.70 per hour, based on a 1.4 percent increase in the cost of living. Wage rates are adjusted annually based on inflation.
  • Oregon: The state minimum wage is tiered, with the highest rate in the Metro Portland area at $13.25 per hour ($14.00 effective July 1, 2021), the lowest in rural (non-urban) areas at $11.50 per hour ($12.00 effective July 1, 2021), and a minimum wage of $12.00 per hour ($12.75 effective July 1, 2021) in the rest of the state. 
  • Pennsylvania: $7.25 per hour, but $13.50 for employees under Governor’s jurisdiction, up from $13.00.
  • South Dakota: Up to $9.45 per hour, up 15 cents from $9.30 per hour.
  • Vermont: Up to $11.75 per hour, a 79-cent scheduled increase over the $10.96 per hour 2020 rate.
  • Washington: Up to $13.69 per hour, for employees who have reached the age of 18. Workers under 16 years old can be paid 85 percent of the adult minimum wage, or $11.64 per hour, in 2021.

Chain Store Age

Walmart Begins Vaccinations in New Mexico

Walmart has administered its first COVID-19 vaccines, to health care workers in New Mexico.  The recently approved Moderna vaccine was administered to healthcare workers at select Walmart stores and Sam’s Clubs in the state of New Mexico.  Additionally, Walmart pharmacists, who will be administering vaccines are also being offered the vaccine.  Walmart plans to administer vaccines in accordance with the CDC’s Advisory Committee on Immunization Practices.

Drug Store News

Walmart Expanding Self-Driving Vehicle Pilo

Walmart and Gatik are expanding their autonomous-truck pilot to Louisiana to deliver items from a Supercenter to a Walmart pickup point on a 20-mile route between New Orleans and Metairie.  Walmart and Palo Alto based Gatik started a pilot program to move customer orders on a two mile route.  The route, while autonomously driven, had a safety driver.  The pilot will continue as new routes are expanded.

Progressive Grocer

2020 Holiday Season Record Breaking for Amazon

2020 holiday sales grew 50 percent compared to the same timeframe in 2019.  This is no surprise given the pandemic.  Amazon’s holiday deliveries included over 8 million items shipped to alternative delivery locations, including Amazon Hub lockers and Amazon physical retail stores like Amazon 4-star and Amazon Books.  As well, Tens of millions of customers used the Amazon Alexa voice assistant to obtain gift suggestions and receive help making and sharing lists, adding items to carts, and making purchases.

Chain Store Age

J.C. Penny Makes Executive Moves

New owners of J.C. Penny have begun to make changes in executive leadership.  Jill Soltau stepped down as CEO on December 31st.  New owners Simon Property Group and Brookfield Asset Management and strategic partner Authentic Brands Group have started the search for a new chief executive. A temporary office of the CEO has been formed that includes key members of Penney’s current leadership team, with Stanley Shashoua, Simon Property Group’s chief investment officer, is now serving as interim CEO.

Chain Store Age

Amazon Adds Eleven New Aircraft to Fleet

Amazon purchased 11 Boeing 767-300 aircraft to expand its air delivery capacity.  Amazon Air intends to transport items across longer distances in shorter time frames.  The acquisitions include seven aircraft from Delta and four aircraft from WestJet. The four aircraft purchased from WestJet in March are currently undergoing passenger to cargo conversion and will join Amazon Air’s network in 2021, while the seven aircraft from Delta will enter Amazon’s air cargo network in 2022. The company will continue to rely on third-party carriers to operate these new aircraft.

Chain Store Age

Walgreens to Sell Drug Wholesale Business for $6.5 Billion

Walgreens Boots Alliance will sell its pharmaceutical wholesale business to AmerisourceBergen in a $6.5 billion cash and stock deal.  Pharmaceutical wholesalers essentially act as middlemen, purchasing drugs from manufacturers and then distributing them to customers like drugstore chains, hospitals and doctor’s offices.  Walgreens said Wednesday that the deal will allow it to focus more on expanding its core retail pharmacy business which, like others, has been rattled by the COVID-19 pandemic.

AP News

Kroger Health’s Colleen Lindholz Pharmacy Executive of the Year

Editors of Chain Drug Review have named Colleen Lindholz the publication’s Pharmacy Executive of the Year.  As the president of Kroger Health, the health care division of Kroger Co., she heads up a group of 22,000 health care professionals. Together they provide health and wellness solutions to more than 14 million people every year. She is very passionate about Kroger Health’s vision to help people live healthier lives. Lindholz is also the main architect behind the company’s Food as Medicine strategy, connecting customers’ grocery experience with their health care needs through innovations in education, training and ­technology.

Lindholz then moved into the operations end of the business after enrolling in Kroger’s management training program. “This helped me get to know the food, over-the-counter and front end of the store. The move really set the stage for being able to live the ultimate dream, and that was to launch the Food as Medicine strategy and platform that we have for the company,” she points out.

In 2013 Lindholz was promoted to director of pharmacy sales and marketing for Kroger corporate, and in 2015 she took over as president of The Little Clinic (TLC), which is a wholly owned subsidiary of Kroger. Two years later oversight of Kroger’s pharmacies was added to her portfolio, and she was named president of pharmacy and TLC. With all of the major elements of Kroger’s health and wellness business under her leadership, Lindholz rebranded and launched it nationwide as Kroger Health.

Today, leading a team of pharmacists, nurse practitioners, physicians assistants, dietitians and technicians working in Kroger’s network of nearly 2,800 stores, 2,200-plus pharmacies and some 222 clinics, Lindholz is laser focused on implementing the Food as Medicine strategy through the pursuit of defined goals.

Chain Drug Review

Daily Holiday Sales Exceeded $1 Billion in Online Sales

Every day of the holiday shopping season exceeded $1 billion in online sales. This according to Adobe Analytics, which said that U.S. online spend during November and December reached a record $188.2 billion, up 32.2 percent over the year-ago period. Data from Adobe Analytics also reveals other record-breaking numbers, including average daily online revenue exceeding $3.1 billion during the holiday season, up 32 percent from $2.3 billion the prior year.

Chain Store Age

Kroger, Other Grocers Work to Speed Up Vaccine Efforts

Kroger Health President Colleen Lindholz told The Wall Street Journal that the grocer is getting only a small number of doses, a fraction of what it has the ability to handle.  Kroger, and other retailers, want to accelerate vaccination rates.  However, they say they are hitting bureaucratic obstacles.  Kroger can vaccinate up to 200,000 people per week with the flu vaccine – Kroger told the Wall Street Journal they had only received 4,500 doses of COVID-19 vaccines.  In addition, inconsistency amongst state guidelines is causing a slowdown, alledgedly, if state governments and the federal government created a more uniform plan the process may be more efficient.

Progressive Grocer

Walmart Launching Fintech Startup Aimed at its Customers and Associates

Walmart is partnering with Ribbit Capital, the company behind the Robinhood no-fee mobile investment app, on its new fintech startup.  Ribbit is known as a disrupter in the financial services space.  The new fintech company will be majority-owned by Walmart. Its board will include Furner and Walmart executive vice president and chief financial officer Brett Biggs, as well as Ribbit Capital managing partner Meyer Malka.

Walmart will continue to serve customers through its existing suite of financial services, which include Walmart Credit Card, Walmart Money Card, check cashing, money transfers and installment financing.

Mass Market Retailers

Holiday Food Customers Shopped In-Store

While the pandemic lowered overall foot traffic in 2019, shoppers came into stores to complete their holiday food shopping.  Data from Placer.ai took a look at seven top supermarket chains nationwide and saw an average year-over-year decline of just 2.5 percent on December 23rd and 1.1percent on December 24th.  “Those numbers are especially impressive,” said Ethan Chernofsky, vice president of marketing for Placer.ai, “considering they are being compared to very high performing days from 2019. And, in fact, if we remove the non-traditional grocer among the group, those numbers improve significantly to an average 0.9 percent decline on the 23rd and a 1.0 percent increase on the 24th.” 

The year ended strongly with overall foot traffic improving at all seven chains compared to previous months in 2020. The average weekly year-over-year visit change for the seven brands was up 2.5%, the best it has been for this collective group since August.

Super Market Perimeter

Physician Dispensing of Opioids

While the pandemic rages on, people in the U.S. are still dying of overdose every day.  This includes addiction to opioids, prescription, and pain relivers.  Opioid misuse, according to studies, are a driver of heroin.  Some are wondering if physician dispensing programs might be contributing to the opioid crisis.  Accordingly, physician dispensing programs is controversial.

Many believe the physician model contributes to the problem.  Yet, no conclusive studies exist to show physician dispensing programs are part of the problem.  Economic incentives do, however, suggest higher opioid prescriptions are distributed when the pharmacy is cut out of the transaction.  Studies indicate over prescribing is part of the problem. 

While many argue the traditional provider/pharmacist is a safeguard against over prescribing, providers push back by asserting more people fill a prescription when the transaction is simplified.   It is suggested more studies, more transparency, and stricter regulation may help curb the problem.

Drug Store News

Walgreens Will Offer Credit Cards, Prepaid Debit Cards

Walgreens is expanding its financial services offering. In partnership with Mastercard and Synchrony, in the coming months, the company will be launching credit cards issued by Synchrony and prepaid debit cards, both of which will be powered by the Mastercard network.

Walgreens said the credit card would connect with its myWalgreens loyalty program, with cardholders eligible for myWalgreens cash rewards and other offers. The co-branded credit card also will offer benefits provided by Synchrony and Mastercard when used at other retailers. 

Drug Store News