Retail Intel Weekly: COVID-19 Updates & More

THE LATEST ON COVID-19Top executives from Walmart, Target, Walgreens and CVS Health took turns pledging to help as President Trump declared the COVID-19 pandemic a national emergency during a press conference held on the afternoon of March 13. Expanding the availability of tests for COVID-19 by turning parking lots into drive-through testing sites is part of the response plan. Addressing the country during a briefing the following Monday, the President seemed to indicate that Amazon chief executive officer Jeff Bezos is also working with the White House in some capacity.CVS opened its first drive-up testing location in Shrewsbury, MA, in Worcester County, 50 miles from Boston on March 19. It's free, but not open to the general public. Tests are reserved for first responders including firefighters, nurses and police who are referred by state and public health officials.Surging consumer demand has caused Amazon to temporarily stop accepting certain products in its warehouses to free up inventory space for hot items, most of which fall into six categories: baby products; health and household items; beauty and personal care; grocery; industrial and scientific; and pet supplies. The action is in place through April 5 and applies to both first-party vendors and third-party sellers. Sellers supplying products that don’t qualify under the guidelines will be unable to restock as a result of the measure but they can use other fulfillment methods to directly mail products to customers. Additionally, Amazon has had to block or remove hundreds of thousands of overpriced, basic-needs products from its marketplace to combat opportunists seeking to profit from the global health crisis.Amazon late in the week also stopped accepting orders for its Prime Pantry service, which offers household and non-perishable pantry items, as the company works to fulfill its backlog in the wake of the increased demand.Amazon additionally plans to hire 100,000 extra employees to handle that demand, while simultaneously temporarily raising pay in the U.S., Canada, the U.K. and Europe by $2 per hour (or the equivalent in local currency) and raising overtime pay for U.S. warehouse workers from 1.5X to 2X. "We are seeing a significant increase in demand, which means our labor needs are unprecedented for this time of year," said senior vice president of operations Dave Clark, according to reports. The company has asked employees to work from home whenever possible, is offering up to two weeks of pay to employees and contractors who need to miss work due to the coronavirus, and is offering unlimited unpaid time off for all hourly employees through the end of March.Walgreens sent emails to registered consumers on the morning of March 16 with a subject line of “Our commitment during COVID-19: Helping you stay safe, healthy & calm.” The email’s main message was “We’re in this together; see how we’re making life a little easier.” Walgreens encouraged consumers to use the services it provides, including finding healthcare online, pharmacy chat, free prescription delivery, free shipping (with no minimum purchase requirements). The retailer linked to dedicated landing pages for each. Beginning March 19, Walgreens stores will have adjusted operating hours. Most locations, including 24-hour stores, will be open from 9 a.m. until 9 p.m. (local times) during weekdays until further notice. These store hours will also apply to weekends, while pharmacy hours on weekends will largely remain the same.Walmart also changed the operating hours of its roughly 2,200 U.S. stores that are open 24 hours a day to close between 11 p.m. and 6 a.m. as of March 15 to give employees more time to stock products as well as clean and sanitize stores. Publix, H-E-B, Whole Foods Market and Best Buy are among other retailers cutting store hours.Walmart is issuing special cash bonuses to hourly employees amounting to $300 for full-time workers and $150 for part-time employees, totaling $365 million. Accelerating the next scheduled quarterly bonus for store, club and supply chain employees a month early will add up to another $180 million by the end of April. And, Walmart plans to hire 150,000 new employees through the end of May to its stores, clubs, distribution centers, and fulfillment centers. The jobs will be temporary at first, but convert to permanent over time.The coronavirus is causing some retailers to close stores altogether — at least for now — including Apple, Macy's, Nordstrom, DSW, H&M, Bath & Body Works and beauty retailers such as Sephora and Ulta, reports indicate. Sephora stores in the U.S. and Canada are closed through April 3 – as of 5 p.m. local time Tuesday, March 17, Sephora Americas president and CEO Jean-André Rougeot wrote in a letter to the retailer’s beauty community. “We have always taken our responsibility to protect the well-being of our people and community seriously,” he wrote. “We also recognize that we are in a position to support the collective fight against COVID-19." The largest owner of shopping malls in the U.S., Simon Property Group is also closing all of its malls and retail properties because of the coronavirus outbreak. Mall of America, the largest shopping mall in the U.S., closed this week as well.Other retailers including Trader Joe's are limiting the number of shoppers allowed in a store at one time. Best Buy has even barred customers from stores, though is allowing "contactless" curbside pickup, as of March 22. Plus, all in-home installation and repair has been temporarily suspended and will be rescheduled, and all in-home consultations are being conducted virtually.Best Buy has seen an uptick in sales on certain items including on many work-from-home-related products and devices such as keyboards, monitors and laptops, as well as freezers and refrigerators as people continue to stock up on groceries and practice social distancing, according to a statement Best Buy shared with Minneapolis-based Star Tribune. “We are seeing a surge in demand across the country for products that allow people to work or learn from home as well as those products that allow people to refrigerate or freeze food,” Carly Charlson, a Best Buy spokeswoman said in the statement.In a March 19 message to customers from Best Buy CEO Corie Barry about how the company is responding to COVID-19, Barry said that at this point, no employee is required to come to work if they aren’t comfortable with it. In addition, all employees that are sick or need to care for children who are out of school will be paid. She added that due to reduced hours and short staff, affected employees will still be paid the amount of their regularly scheduled hours.Dollar General is dedicating the first hour of each shopping day to seniors, who are one of the groups most vulnerable to COVID-19. "Dollar General wants to provide these at-risk customers with the ability to purchase the items they need and want at the beginning of each day to avoid busier and more crowded shopping periods," the retailer said in a media release. The dollar store chain will also close one hour earlier than current close times "to allow employees to clean and restock store shelves, as well as for their health and wellbeing," according to the release. A number of other retailers including Whole Foods Market and Ahold Delhaize's Quincy, MA-based Stop & Shop have also implemented similar senior-only shopping hours. Target joins retailers such as Dollar General in reducing its hours and devoting exclusive shopping time to vulnerable people, including the elderly and those with underlying health concerns. The retailer will close all its stores by 9 p.m. daily to build on measures announced earlier this month such as enhanced cleaning, and reserve the first hour of shopping each Wednesday to support vulnerable shoppers.Two Kroger store employees from the retailer's King Soopers and Fred Meyer chains tested positive for the novel coronavirus over the weekend. As a result, Kroger implemented an emergency leave policy giving employees diagnosed with COVID-19 and placed under mandatory quarantine standard pay for up to 14 days, according to Grocery Dive. If employees are unable to come back to work after 14 days they will be eligible for additional paid time off via short-term disability coverage.H-E-B has made a commitment to donate an “initial” $3 million to local food banks, Meals on Wheels and other local organizations to support those most hard hit by the spread of the coronavirus, according to a March 16 press release. H-E-B will also dedicate $300,000 to assist Texas Biomedical Research Institute, a San Antonio-based organization with a team dedicated to coronavirus research.Costco is dealing with the historically high levels of consumer demand by acquiring logistics firm Innovel Solutions from Transform Holdco (TFCO) for $1 billion to speed up its last-mile delivery and e-commerce capabilities, primarily on big and bulky items. Part of the deal includes a long-term commercial arrangement whereby Costco provides TFCO with warehousing, delivery and installation services to Sears and Kmart members, and Costco retains more than 1,500 Innovel employees on a go-forward basis. Announced on March 17, the retailer said the deal has closed. Also on March 17 in a message to members, Costco president and CEO Craig Jelinek said the retailer has “reduced some services” (e.g. sampling stations) as well as implemented purchase limits on certain items and increased protocols in sanitizing surfaces including shopping cart handles, merchandise shelves, front-end belts and registers. Jelinek said “buyers and suppliers are working to ensure in-demand merchandise as well as everyday favorites are available in our warehouses.”Costco is also reportedly limiting returns for certain essential, high-demand items such as toilet paper, hand sanitizer, rice and Lysol, according to signs spotted in some stores as well as to three current employees who spoke to Business Insider on the issue.Whole Foods Market is implementing temporary modifications to its prepared foods, restaurant and self-serve venues, including:closing hot bars, salad bars, soup bars, antipasti & olive bars, acai machines as well as poke bowl and self-serve pizza stations.closing the in-store dining area of seated restaurant venues and taprooms, which will offer takeout only.removing indoor and outdoor cafe seating.suspending all food sampling and demos.removing open access sample product testers from beauty and personal care departments.adding extra hand sanitizer stations, including near shopping carts and checkout.no longer allowing personal, reusable containers at smoothie and coffee bars.Until further notice, CVS Health's Aetna division will offer zero co-pay telemedicine visits for any reason to all Individual and Group Medicare Advantage members. This comes after Aetna put a similar policy in place for its Commercial insurance members, announced on March 6, offering zero co-pay telemedicine visits for any reason.New steps Rite Aid is taking to handle the COVID-19 pandemic include offering free home delivery of certain prescriptions, as well as monitoring its drug and product supply chain, disinfecting stores and supporting front-line employees.Publix has implemented a no refund policy. In a March 20 email to customers, the retailer communicated that "at this time, we are suspending refunds on products purchased during this declared emergency. We will of course continue to honor our Publix Guarantee for any products that do not meet our quality standards.” Publix also noted that it is reducing emails sent to customers due to all the energy being devoted to handling the coronavirus. It is also opening stores early to seniors aged 65+ on Tuesdays and Wednesdays, beginning March 24.DRUGSTORERite Aid outlined a new growth strategy complete with a fresh logo and creative (view video below) during a virtual Analyst Day on March 16. President and CEO Heyward Donigan said the company’s growth plan is focused on three areas — solidifying its EnvisionRxOptions as the dominant mid-market PBM, unlocking the value of its pharmacies and revitalizing its digital and retail experience. Rite Aid will double down on its pharmacy business, step up its personalized digital engagement and refresh merchandise to focus more on self-care and younger shoppers, among other initiatives.CVS Pharmacy’s exclusive K-beauty-inspired brand from Kiss Products, Joah, has teamed with national nonprofit Girls Inc. in honor of March’s designation as “Women’s History Month.” From now through the end of the year, Joah will donate a portion of proceeds from select "Better than the Best" items at Joahbeauty.com, select CVS stores and cvs.com to Girls Inc., which works to provide girls with “the experiences, mentoring relationships and programming to succeed in life,” according to a March 18 press release.AMAZONHanesBrands has partnered with Amazon to make its value-priced C9 by Champion line an Amazon exclusive, marking the first time the brand — previously a Target exclusive — will be available globally. Flagship Champion products are also already sold on Amazon. (See Related Updates below.)

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