COVID-19

Kroger, offering antibody tests, may be well placed to distribute a vaccine

Sabri Ben-Achour Dec 3, 2020
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Coronavirus antibody tests are another way for Kroger to get people in the door, and health and wellness is already a major part of the chain’s business model. Callaghan O'Hare/Getty Images
COVID-19

Kroger, offering antibody tests, may be well placed to distribute a vaccine

Sabri Ben-Achour Dec 3, 2020
Heard on:
Coronavirus antibody tests are another way for Kroger to get people in the door, and health and wellness is already a major part of the chain’s business model. Callaghan O'Hare/Getty Images
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Kroger reported third-quarter results Thursday morning, beating profit estimates and falling just short of sales expectations. The grocery chain, which also owns Ralphs, Harris Teeter, Fred Meyer and many more, is lately offering rapid antibody testing at its pharmacies nationwide. Antibody tests allows people to find out if they have had COVID-19 in the recent past.

The line between grocery stores and health care is getting finer and may blur further as vaccines reach the market. Millions of Americans are spending a lot more time at home, which includes a lot more time eating at home, which means grocery stores are benefiting.

“Especially as restaurants have been restricted or, in many cases, closed,” said Zain Akbari, an equity analyst at Morningstar. “As a result, Kroger has seen a significant uptick in its sales in the first and second quarters.”

That’s great for Kroger, said supermarket analyst David Livingston of DJL Research. It’s also not great for Kroger, he said.

“It’s not all rainbows and unicorns just because your sales go up,” Livingston said. “You’ve lost some employees, you’re looking at paying overtime, you’re trying to add employees for the increased sales, you’ve had to prepare your stores for the pandemic.”

It’s perhaps no surprise that Kroger is offering antibody testing at its pharmacies; it’s another way to get people in the door. Health and wellness is already a major part of the chain’s business model.

“Sometimes they’ll do 20% of their total sales just in the pharmacy,” Livingston said.

If consumers associate Kroger with COVID-19 testing, that could pay off when a vaccine rolls out. Greg Portell, with A.T. Kearney’s global consumer practice, said the vaccine — or vaccines — are an opportunity for big retailers in general and grocery chains in particular.

“There have been discussions about grocers and retailers being involved in vaccine distribution,” Portell said. “Obviously they provide lots of points of access, which is important when you talk about vaccine distribution.”

Grocery stores have the ability to transport goods in cold storage already, and some vaccines require very cold storage. And pharmacies, which are sometimes inside grocery stores, already provide flu shots. If people start heading in droves to the grocery store for their vaccines, a retail subsector that was able to succeed as the virus emerged could benefit all over again from its demise.

COVID-19 Economy FAQs

Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?

This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.

Could waiving patents increase the global supply of COVID-19 vaccines?

India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.

Can businesses deny you entry if you don’t have a vaccine passport?

As more Americans get vaccinated against COVID-19 and the economy begins reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.

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