Nationwide Restaurant Affiliation asks Congress for assist amid omicron

On March 18, 2021, people in New York City dine at an outdoor dining patio set up at a restaurant.

Angela Weiss | AFP | Getty Images

The National Restaurant Association is asking Congress to replenish the Restaurant Revitalization Fund as the Omicron variant hits operators’ businesses.

Last year, lawmakers set up the $28.6 billion fund to help bars and restaurants struggling in the wake of the crisis pandemic. The grants were intended to cover a restaurant’s total pandemic losses of up to $5 million for a single location or $10 million for a business with fewer than 20 locations. Public companies were not eligible, but their franchisees could still apply.

With the fund depleted, restaurants pressed for Congress to refill it. Several lawmakers have introduced legislation to do so, but the bills haven’t gained traction and the Biden administration didn’t seem interested in backing the measure.

but the recent spike in Covid-19 cases and its impact on restaurants could change minds.

The latest National Restaurant Association survey of operators found that 88% of restaurants saw a drop in demand for indoor dining due to the Omicron variant. More than three-quarters of those polled told the trade group that business conditions are worse now than they were three months ago. And the majority of operators said their restaurant is less profitable today than it was before the pandemic.

“Alarmingly, the industry has still not recovered the more than 650,000 jobs lost at the start of the pandemic, a loss 45% more than the closest industry,” trade group top lobbyist Sean Kennedy wrote in a letter to the Congress leadership for both parties .

Kennedy also noted the benefits of the first round of RRF grants. The trade group estimates the first round of funding saved more than 900,000 restaurant jobs, and 96% of recipients said the grant made it more likely they could stay in business. A full replenishment of the fund would save more than 1.6 million jobs, the trade group estimates.

Omicron wave reveals early indicators of easing in states hit early

A woman receives a Covid-19 test during a drive through the Covid-19 Testing Center as hundreds of cars and pedestrians queue to check out a Covid ahead of the Christmas holiday in North Bergen, New Jersey, the United States, December 22, 2021 -19 test as Omicron levels up across the land.

Tayfun Coskun | Anadolu Agency | Getty Images

After weeks of rising infections, the latest Covid surge is showing signs of slowing in a handful of areas earliest affected by the Omicron variant – offering a glimmer of hope that this wave is beginning to wane.

The U.S. has been reporting an average of nearly 800,000 cases a day for the past week, more than triple the previous record set last winter, according to data from Johns Hopkins University. But in a handful of states and cities, particularly on the East Coast, cases appear to have plateaued or been declining in recent days.

In New York, the seven-day average of daily new cases has declined since hitting a record high of 85,000 a day on Jan. 9, according to Hopkins. Cases there doubled over a series of seven-day periods in late December and early January, but have fallen sharply to an average of 51,500 since last week. In New York City, average daily cases have fallen 31% over the past week, data from the state Health Department shows.

“There will come a time when we can say it’s all over,” Gov. Kathy Hochul said at a news conference on Friday. “We’re not there yet but boy is it coming and we’ve been waiting a long time.”

New York is still reporting high levels of daily infections and ranks 15th among all states, down from the second-highest a few days ago, according to a CNBC analysis of population-adjusted case counts. New Jersey also recently fell out of the top five and is now 20th as the state saw a 32% drop in average daily cases over the past week.

At the end of December, Washington, DC had the highest number of Covid infections per capita than any other state, peaking at an average of 2,500 per day. That has since fallen to 1,700, the data shows.

And in neighboring Maryland, daily infections hit a pandemic high on Jan. 8 but are down 27% from a week ago.

In Illinois, said Dr. Khalilah Gates, associate dean of medical education at Northwestern University’s Feinberg School of Medicine, said the stabilization in hospitalizations is “already kind of being felt.” On Sunday, the state reported a seven-day average of about 7,200 patients hospitalized with Covid, a 4% increase from the past week, a more modest increase than the 30% weekly growth reported, according to the Health Department was only observed two weeks ago.

“There’s not that influx that we had at the beginning of the climb and things are just a little bit around,” she said. “And if that goes on for five to seven straight days, I think you start to breathe a little easier and say, OK, like we kind of got through that climb, got through that climb too.”

Cases are also declining in South Africa and the UK, which are being closely watched as potential clues to what could be happening in the US, as they have both experienced previous spikes. Hopkins data shows average daily infections in South Africa are down 80% from where they peaked on December 17 and in the UK by 42% from that country’s peak on January 5, although there’s no guarantee the US will will follow the same path.

American populations have different vaccination rates, previous exposure to the virus, and levels of underlying health conditions, so Omicron’s trajectory could vary.

Certainly, cases are rising in most states, with 23 reporting record-high infection rates as of Sunday, data from Hopkins shows. And yet, U.S. cases are undercounted due to the availability of at-home testing kits, the results of which are not typically reported to state or federal agencies.

That increase is particularly visible in western states, where average daily cases are showing some signs of slowing but are still up 14% over the past week. This has led to a “jumping up” in Covid admissions at Providence St. Joseph Medical Center in Los Angeles, Dr. Michael Daignault on CNBC Worldwide exchange Friday morning.

“We had this delta rise, it was a rise and then a plateau, and then the Omicron kind of lifted off this delta crest,” said Daignault, an emergency room physician at the hospital.

Caused the increase New Jersey Gov. Phil Murphy on Tuesday and Washington Gov. Jay Inslee on Thursday to issue emergency orders to combat the new wave of cases.

A steep peak

Experts predict the Omicron wave will fall almost as fast as it has risen, leaving the US with relatively few Covid cases sometime in February or March, although cities are likely to reach that point sooner.

While the threat of a new variant could always change projections, it’s possible Americans could see some breathing space as a large segment of the population retains some immunity to the recent infection.

“Sometime in early March, mid-March, we should be in a very good position,” said Ali Mokdad, professor of health metrics at the University of Washington’s Institute for Health Metrics and Evaluation. “April, May, we will have reported very few cases.”

However, how quickly cases drop after they have peaked depends on a community’s adherence to public health measures after that period.

“It depends on how high the peak is. And whether people, when they see case numbers going down, kind of ease things up,” said Aubree Gordon, associate professor of epidemiology at the University of Michigan School of Public Health.

hospitals overwhelmed

There is a growing body of evidence that the Omicron variant makes people more contagious, but not as sick as the Delta variant.

Still, there is a record 156,000 Americans in US hospitals with Covid, according to a seven-day moving average of HHS data, up 17% over the past week. A significant proportion of Covid hospitalizations appear to be from people admitted for other reasons who test positive for the virus once in a facility.

Miami Mayor Francis Suarez told CNBC: “screeching in the streetlast week that about half of the city’s hospital admissions are people who were diagnosed after being admitted for something else. NY Governor Hochul on Sunday reported that 42% of hospitalized Covid patients in New York were admitted for something other than the virus.

Even if the omicron variant causes less severe diseases, the hospitals can still be burdened due to the high patient volume in combination staff shortage.

“The rate-limiting factors are still the incredible speed of this variant, the number of patients who come into the ER or require an admission,” said Daignault, the LA physician. “And even if we do peak in late January, you still have the back end of that spike for the rest of February.”

Daignault suspects that many of the intensive care patients at his hospital are currently suffering from the more virulent Delta variant. Delta cases could also contribute to a spike in LA’s daily Covid deaths, he said. Still, the CDC recently estimated omicron now accounts for 95% of new cases.

Nationwide, cases and hospitalizations have passed the peak of last winter, but there are about 87% as many patients in intensive care with Covid. The US is reporting a seven-day average of nearly 1,800 Covid deaths a day, according to Hopkins data, which, while rising, is about half the peaks recorded around this time last year, before vaccines were widely available.

While vaccines, particularly without a booster dose, appear to offer less protection against infection by Omicron, they appear to withstand the serious illnesses and deaths that they were originally designed to prevent. While this means that vaccinated people may be contributing to the rise in cases, in reality it is the unvaccinated who are driving hospital admissions.

But the high transmissibility means many healthcare workers have contracted the virus and are being forced to isolate, pushing some hospitals to their limits even sooner.

Although a peak in cases provides some light at the end of the tunnel of this surge, hospitalizations and deaths have lagged the rise in infections. The full impact of the Omicron spike remains to be seen.

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WATCH: Signs Covid is peaking in the North East

A brand new labor battle opens on Broadway as omicron closes exhibits

A sign indicating canceled performances of “Mrs. Doubtfire” due to Covid is displayed in the window of the Stephen Sondheim Theatre on December 16, 2021 in New York City.

Dia Dipasupil | Getty Images

After over a year of industry-wide closures, Broadway theaters finally reopened in September, but 2021 did not end the way theater professionals hoped it would. The late 2021 comeback had largely bucked London’s touch-and-go reopening earlier that summer: only a handful of Broadway productions temporarily closed due to delta infections. But omicron outbreaks late in the year stalled live theater. Before Christmas, 18 productions canceled performances. Five shows closed permanently in December, citing extreme uncertainty ahead this winter and increased challenges from the pandemic.

If some shows can’t go on under these conditions, how Broadway producers are choosing to close is creating a new labor controversy involving artists already among the hardest-hit by the pandemic.

Kevin McCollum, a prominent producer of numerous Broadway shows including the Tony Award-winning productions of “In the Heights,” “Avenue Q,” and “Rent” says he remains “very bullish on the theatre business,” but he just made a decision that has theater unions alarmed.

McCollum has multiple shows currently running on Broadway, including “Mrs. Doubtfire” and “Six,” but as omicron surged in New York City, “Mrs. Doubtfire” had yet to find its footing.

“Mrs. Doubtfire was especially vulnerable because [it] just opened,” McCollum said.

With no cast album (unlike the wildly popular show “Six”), he says opening the show as cases spiked was “like planting a sapling, but there’s a hurricane.”

Doubtfire was open for seven days before an omicron outbreak in the cast forced McCollum to cancel Sunday’s matinee performance on December 12. Due to infections, the show did not reopen until December 22. During the 11-show shutdown in December, McCollum says the production swung $3 million: $1.5 million in expenses and another $1.5 million in ticket sales refunded to customers. But the larger issue was the shutdown’s impact on advance ticket sales, coupled with negative to lukewarm reviews.

Prior to the shutdown, the show sold around $175,000 in ticket sales per day, a relatively decent figure compared to gross weekly ticket sales during the same period in 2019. After the shutdown, that number dropped to $50,000. “When a show cancels a performance due to Covid, we see an increased cancellation rate for all performances,” McCollum said.

The Broadway League suspended their publication of gross-ticket sales during the pandemic, making it impossible to verify box office performance. The Broadway League declined to comment.

The decrease in box office sales and increase in ticket cancellations was particularly concerning to McCollum as the holiday season is the most profitable, bolstering Broadway productions through the slower winter months. Family-oriented musicals, such as “Mrs. Doubtfire,” in particular benefit from the busy season.

“Especially for a family show, there are younger people who are not vaccinated, and with a family of four, none of them can come in because they’re not going to let their child wait outside,” McCollum said.

He remains optimistic that family-oriented productions will have a greater chance of survival later this spring, benefitting from rising vaccination rates among kids and FDA approval of booster shots for younger children.

But in the meantime, McCollum has made a move that has attracted controversy: the show must be suspended, with a plan to return, but no guarantee for any of the artists involved.

An unprecedented ‘Mrs. Doubtfire’ suspension

In a move described by unions as unprecedented for the Great White Way, McCollum decided to temporarily suspend performances until March 15. Soon after announcing the hiatus, two other productions followed in McCollum’s footsteps. “To Kill A Mockingbird,” the hit play based on Harper Lee’s novel of the same name, announced Wednesday that it would suspend performances until June (temporarily laying off the cast and crew), and reopen the show in a smaller theater. “Girl from the North Country,” a jukebox musical featuring the work of Bob Dylan, will also end its run this month, but the production is currently in “advanced talks” with the Shubert Organization to reopen at another Broadway theater later this spring.

McCollum says he’s “not just throwing in the towel.”

According to the producer, the cost of the shutdown will be between $750,000 and $1 million. However, if the show were to remain open and experience additional closures as infections permeate the cast and crew, the production would lose around half a million each week. Between a decrease in ticket sales, mounting last-minute ticket cancelations and refunds, the evaporation of group sales (which account for a large portion of box office sales), and a plethora of costs associated with Covid testing (which average $30,000 per week), McCollum says the show would be forced to close permanently if it attempted a January run.

Other producers have made the final curtain call. Among Broadway shows that have closed for good: “Thoughts of a Colored Man”, “Waitress”, “Jagged Little Pill” and “Diana.”

The Temptations’ jukebox musical “Ain’t Too Proud” is closing later this month. “Caroline, or Change” also recently closed, though it was scheduled as a limited run.

Theater unions push back

McCollum says the nine-week hiatus is the only viable option to keep the production open.

“I have to figure out a way to extend my operation,” he said. “Because with the 14 unions … we don’t have a mechanism to hibernate. We do have a mechanism to open and close. Therefore, using that binary mentality of opening and closing, I had to turn the show off … preserve my capital, and use it when the environment is more friendly towards a family show.”

But according to the NYC Musicians Union, who represents musicians on Broadway, there is a mechanism for a production to hibernate. Provisions in the union’s contract with Broadway productions allow producers to temporarily close for a maximum of eight weeks during the months of January, February, and September. To do so, producers must get permission from the union and open their books to prove the show is losing money. McCollum declined, forcing the production to officially shut down — albeit temporarily, if all goes according to plan.

The union claims the producers of “Mrs. Doubtfire” intentionally chose to close the production (rather than enter an official, union-sanctioned hiatus) to hide their finances. “Our Broadway contract does allow a show to go on hiatus in a way that protects everyone’s jobs and gives audiences the promise that the show will return. But some producers choose not to follow this route so they can hide their finances from us. Instead, they simply close down their shows completely, with a vague promise of re-opening,” Tino Gagliardi, the President of the NYC Musicians Union Local 802, said in a statement to CNBC.

A spokesperson for McCollum’s “Doubtfire” production said the producer’s decision to shut down rather than follow the procedure for a union-sanctioned hiatus was due to difficulties in coordinating a unified deal between multiple unions, who presented the producer with different terms.

NEW YORK, NEW YORK – DECEMBER 05: Producer Kevin McCollum poses at the opening night of the new musical based on the film “Mr. Doubtfire” on Broadway at The Stephen Sondheim Theatre on December 5, 2021 in New York City. (Photo by Bruce Glikas/Getty Images)

Bruce Glikas | Getty Images Entertainment | Getty Images

Actor’s Equity Association – the union that represents Broadway actors and stage managers – says their contract with the Broadway League includes language from the last century that permits a show to close for at least six weeks.

According to Mary McColl, the union’s executive director, the archaic provision was meant to prevent producers from closing a show, laying off the entire cast, and re-opening shortly after (often in a new city) to “revitalize” the production, potentially with a new cast. McColl, whose last day as executive director of AEA was Friday, told CNBC that “it was never contemplated that it was made to create a layoff circumstance, which is what it is being used for now.”

“Even though it might completely comport with that specific article in our contract, it was never contemplated that it would be used in this way. And I don’t believe that any producer, up until now, has actually put it out in the public realm as ‘this is just a hiatus,'” she said.

While omicron has put shows in a challenging financial position, she says producers like McCollum are using that as an excuse to engineer a new cost-cutting tool: producers suspend productions during the winter months when shows struggle to sell seats, a challenge facing the industry even before the pandemic.

“I think this producer really looks at this as a layoff that’s necessary in the winter,” McColl said. “I don’t think it’s just exclusive in their mind to the Covid situation we’re in, but to create a layoff provision in the production contract, which we do not have.”

She says the move to go on hiatus should have been bargained between the union and The Broadway League (which represents shows in negotiations with artist unions). The union attempted to negotiate, but The Broadway League refused. The League recently came under fire for its disparaging comments against understudies, in which president Charlotte St. Martin blamed show closures on “understudies that aren’t as efficient in delivering their role as the lead is.”

In declining to comment, The Broadway League added to CNBC that it “would refrain from commenting on an individual show’s business model.”

As a result of McCollum’s decision, 115 people will be laid off for at least nine weeks while the show is shuttered; an especially difficult prospect for theater artists who have been out of work for over a year. One of those workers losing her job is LaQuet Sharnell Pringle, who is a swing, understudy, and assistant dance captain for “Mrs. Doubtfire.” Pringle says she had to find additional streams of income while Broadway was closed for 18 months. Now, she is leaning on those side hustles again – entrepreneurial opportunities that include teaching, writing, and editing.

While McCollum argues the temporary closure will ensure “long-term employment,” others are not as optimistic about the show’s future.

“This is either going to be a wonderful idea that helps to keep live theater going during a global pandemic, or it is just prolonging us actually being closed,” Pringle said. “There’s the actor side of me that wants to believe in this [but there is also] the actor who has lived through this for going on two years now [that] says it might be too soon for theater to be back.”

Will the cast return?

It remains unclear whether the cast, crew, and musicians will return if the show re-opens in March, as many are still recovering from the significant financial blow of 18 months of unemployment and may look for work elsewhere.

Pringle is pondering another career, like many on Broadway, looking for work in less volatile sectors of the entertainment industry. “I’m auditioning for as much television and film as I can to get work that way,” she said. While she doesn’t think ongoing closures will dry up Broadway’s pool of talent, she says it will “severely injure it.”

She wants to continue with “Mrs. Doubtfire” but said, “I have to be smart, business-wise, and keep all my options open. … Actors care about the projects we’re attached to, but we also have to think about our livelihoods.”

“It’s been painful,” McCollum said. “There’s nothing harder than working in the theater.”

McCollum says Broadway’s need for mask-less employees coupled with a live performance poses a unique challenge to the theatre industry, in which Covid is more likely to spread and interfere with operations.

Another issue hitting many Broadway productions is the absence of older patrons, which theater heavily relies on. For the 2018-2019 season, the Broadway theatergoer was on average 42.3 years old. Conversely, film audiences skew younger. According to PostTrak’s Motion Picture Industry Survey, those aged 18-24 represent the largest demographic among moviegoers.

Despite the challenges, he insists that his team is “ready to do whatever we have to do to re-open the show in March” and he says those who want to return to the production can have their jobs back.

No guarantees

However, according to both unions, McCollum has not guaranteed that “Mrs. Doubtfire” will return in March, nor has he contractually guaranteed that the current workers will remain with the show when it is scheduled to re-open. If he had closed the show temporarily under the musicians’ union’s contractual provisions, he would be obligated to re-hire all musicians, according to their union, when the show resumes performances.

“Stopping a show abruptly and firing everyone creates a financial shock to our musicians and the other hardworking theater professionals,” Gagliardi said. “When a show closes like this, none of the artists have a guarantee of being re-hired when, or if, the show reopens. Artists deserve a written guarantee that they will be re-hired.”

The unions are collectively perplexed by McCollum’s resistance to working out a deal.

“If in fact, they’re saying we have to do this because we don’t have enough money to keep the show running, and we want to save enough money to reopen the show at a time when we think people will buy tickets, why would they not put that in writing so that the actors, and all the other workers, have some security, because everybody’s laid off,” McColl said.

Producers are also not obligated to re-hire the cast under the same terms of their original contract. In other words, the union will have to renegotiate the contracts when the show re-opens, and the actors could be paid less as a result.

The spokesman for the Doubtfire production said there are no guarantees to anyone who works on the show that it will re-open. “The show has closed. Kevin has said he will be offering everyone on the show their jobs back on March 15, if they want to come back,” the spokesman said. But he said anyone associated with the production has “no obligation to come back to the show if we don’t want to and we are free to take other employment if we wish.”

“When a show closes, their contract ends. Their contract is just negated regardless of how long it was supposed to run for,” outgoing AEA executive director McColl said, who added the union will be taking up issues related to the McCollum decision in its next negotiations, though she will no longer be leading it. “If they are an actor or stage manager who earns above the union minimum, which a lot of actors and stage managers do, they’re able to negotiate over scale. Without a guarantee that they’ll come back at that dollar amount, it’s possible that that producer would offer them less money to come back.”

McColl says that in negotiations with McCollum, the producer refused to put his words in writing. Although he has made a verbal “promise,” McColl says, “there is no guarantee that that’s going to happen,” and that is a difficult position for all of the workers, including actors, stage managers, musicians, stagehands and wardrobe workers on “Mrs. Doubtfire.”

To make matters worse, equity members’ health insurance is based on the number of weeks they work, and many workers will be unable to gain access to unemployment benefits, as some have not worked long enough since the 18-month shutdown to qualify.

Union officials are concerned that other shows, like “Mockingbird” and “Girl from North Country” have done, will enter similar hiatuses during slow months, dealing a significant blow to workers in the entertainment industry who will be without pay and health insurance while productions wait to open in a more fiscally advantageous environment.

The situations are different. Mockingbird is downsizing and moving to a new theater, while the Dylan musical is working on a new reopening plan. Unlike Doubtfire, they were not in negotiations with unions that fell apart. Neither union commented on these shows to CNBC, but expressed concerns about the general trend of going on hiatus.

Producers for “Mockingbird” and “Girl from North Country” could not be immediately reached for comment.

“It’s just a terrible circumstance that our members find themselves in, and the fact that it is now being picked up by other shows is a really terrible situation,” McColl said. “If an employer wants something, usually the negotiation provides something in return for the worker. I see that coming for The Broadway League and their members. I see that coming.”

Missed this year’s CNBC’s At Work summit? Access the full sessions on demand at https://www.cnbcevents.com/worksummit/

New Jersey calls public well being emergency amid omicron hospital surge

New Jersey Gov. Phil Murphy speaks to volunteers as he meets with Newark Mayor Ras Baraka during the gubernatorial election in Newark, New Jersey November 2, 2021.

Eduardo Munoz | Reuters

Phil Murphy, Governor of New Jersey reinstated a public health emergency Tuesday as hospitals struggle to keep up with an influx of patients as Covid cases surge amid a persistent shortage of medical staff.

The recent spike is being fueled by the rise of the rapidly spreading Omicron variant, which the Centers for Disease Control and Prevention has in its possession These account for about 95% of the sequenced Covid-19 cases in the US Although vaccines, and especially booster doses, provide statistical protection against serious illness and death, experts say the sheer volume of cases is overwhelming hospitals.

Murphy said the state is seeing nearly 35,000 new Covid cases a day and more than 10,000 residents have been hospitalized in the past two weeks.

The re-declaration allows the governor to exercise certain emergency powers, including mask mandates in schools.

Murphy said the renewed state of emergency will have “no new impact at all” on local residents’ daily lives.

“That’s what it doesn’t mean,” he said. “It doesn’t mean new universal mandates or passports. It means no bans. It means no business restrictions or collection limits.”

Half of the hospital beds at Newark University Hospital are filled with patients who have been diagnosed with Covid-19, some of whom were admitted for something else but subsequently tested positive, said hospital president Dr. Shereef Elnahal in an interview on CNBC’s “Squawk box” On Wednesday.

But Elnahal said the Covid infection itself is not his main concern.

“Actually, I’m more worried about a health issue than a Covid-19 issue,” Elnahal told CNBC Becky Swift. “Right now we see our workforce demoralized. There is no light at the end of the tunnel to paint now like I did in Spring 2020.”

He said the industry is losing talented clinicians between the ages of 45 and 60, “often the most energetic and knowledgeable people in the hospital.” That’s a problem that may actually outlast omicron, “which appears to have already plateaued, at least in cases in the New York metro area.”

Elnahal said nearly 10% of his hospital’s staff are traveling with Covid, bringing the hospital closer to a staff crisis with “awkward” staff-to-patient ratios.

Elnahal said he would like the government to come up with a “clear definition” of the endgame in relation to Covid-19.

“Which case level defines the endemic case?” What does this mean for healthcare regulations and what can we do, what should we avoid? How much capacity should we create? What is the guidance for healthcare organizations that will be dealing with this pandemic but also with the aftermath?” are some of the questions he wants answered.

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WATCH: University Hospital CEO on Covid staff crisis: Our workforce is demoralized

Retailers see staffing challenges as omicron rages, gross sales taking a success

A sign saying “Now Hiring” is posted in an Urban Outfitters store in San Francisco.

David Paul Morris | Bloomberg | Getty Images

Retail executives presenting at the ICR virtual conference this week explain how the highly contagious Omicron variant drives sales and leaves stores and distribution centers understaffed.

But investors seem to be shrugging the bad news as they see it as a short-term challenge. For many retailers, the silver lining is that consumer demand appears to be well intact.

Lululemon said sales will be in the November-January quarter are at the lower end of their previous expectations because working hours had to be reduced at some locations due to a lack of labor. Lands’ End said it had been a difficult time hiring. Abercrombie & Fitch lowers its sales estimate for the fourth quarter because it didn’t have enough goods in stock to meet consumer demand. While Urban Outfitters said shoppers’ visits to its stores had not increased as planned in December, and were instead purchased on its websites.

Still, Abercrombie shares rose nearly 8% on Tuesday lunchtime, while its rival American Eagle Outfitter increased by about 3%. Urban Outfitters ‘stock rose nearly 2% and Lands’ End rose a little over 2%.

And these are just a few examples of how the recent surge in Covid cases in the US is sure to continue to rock the retail sector in the coming weeks. On Monday, around 1.5 million new cases of Covid-19 have been reported, according to data from Johns Hopkins University, bringing the seven-day average of new cases to 754,000 daily. While many vaccinated people infected with the virus say symptoms are mild, hospital admissions are on the rise, especially for those who get sick and are not fully vaccinated.

While these retailers may be weeks away from releasing full Christmas quarter results, the revised forecasts and comments provide analysts and investors with a preview of what’s to come. Companies from Lululemon to American Eagle are also shedding light on how to deal with the effects of omicron.

Work overtime

Lands’ End chief financial officer Jim Gooch said Tuesday that some employees had been working overtime in the past few weeks.

“We know that the work will be a big problem. … We hope this will normalize in the future, but this year has been a challenge,” he said during an ICR presentation. “And that’s why the teams are doing what they can to try to come out on top this year.”

Abercrombie & Fitch said Tuesday it was able to drag workers from one of its brands into stores of another brand in order to keep the doors open when workers call in sick. The company also owns Hollister and Gilly Hicks.

“In a mall where we have multiple brands and we have a staffing problem because we have a store that might come into contact with Covid, we can borrow staff from the other stores and that has helped us tremendously,” said Abercrombie Chief Executive Fran Horowitz, during an ICR presentation.

As a result, Horowitz said, Abercrombie has not had to close any stores entirely due to Covid outbreaks. However, it has temporarily reduced opening hours in some locations, she said. That’s an approach that companies take off Macys to gap to Nike also recently took.

“A little déjà vu”

“The first day of ICR 2022 was a little déjà-vu where we all sat in front of our computers and went from meeting to meeting with one click,” said Dana Telsey, CEO and Chief Research Officer at Telsey Advisory Group.

“Unfortunately, the Omicron variant of Covid-19 appears to have the negative impact we all feared on sales and staffing levels in January,” she said in a statement to customers.

Urban Outfitters reported Tuesday that sales for the two-month period ended December 31st were up 14.6% compared to 2019. Digital sales grew double-digit during this period, while in-store sales declined a low double-digit percentage on a two-year basis, the company said.

“We believe omicron affects our store sales … It’s hard to say how much,” said CFO Melanie Marein-Efron during an ICR presentation. “As soon as your stores start restricting their hours of operation, you are clearly limiting the ability of consumers to get into your store.”

American Eagle, which also owns lingerie brand Aerie, predicts fourth-quarter sales will increase a medium-to-high percentage of teenagers year over year. According to refinitive data, this is less than the 21.5% increase forecast by analysts.

However, American Eagle raised its expectations for sales in 2023 from $ 5.5 billion to $ 5.8 billion, suggesting the effects of Covid will be temporary.

“We think it will be short-term if there is any impact, and more isolated in January … maybe into February,” said Mike Mathias, CFO of American Eagle, when asked about omicron. “We share resources as needed between tips in specific stores.”

Pfizer CEO says omicron vaccine will probably be prepared in March

Pfizer CEO Albert Bourla said Monday a vaccine that targets the Omicron variant of Covid will be ready in March and the company has already started making the cans.

“This vaccine will be ready in March,” Bourla told CNBC.Squawk box.” “We [are] are already starting to manufacture some of these endangered quantities. “

Bourla said the vaccine will target the other variants in circulation as well. He said it was still not clear whether an Omicron vaccine would be needed or how it would be used, but Pfizer will have some doses ready as some countries want it ready as soon as possible.

“The hope is that we can achieve something that offers much better protection against infection, especially, because protection against hospitalization and serious illness is reasonable right now, with the current vaccines, as long as you say,” the third dose “said Bourla.

Real-world data from the UK have shown that Pfizer and Moderna vaccines are only about 10% effective at preventing symptomatic infection from Omicron 20 weeks after the second dose, according to a study by the UK Health Authority. However, the two original doses still offer good protection against serious illness, the study found.

According to the study, booster vaccinations are up to 75% effective in preventing symptomatic infection.

Dr. White House chief medical officer Anthony Fauci said in December that it was no need for a booster shot specifically targeting omicrons, because the current boosters work well against the variant.

Modern CEO Stephane Bancel said CNBC on Monday The company is working on a booster targeting Omicron for this fall and will enter clinical trials shortly. Bancel said governments are in high demand as they prepare regular vaccinations for the virus.

Bourla said it was not clear whether a fourth dose would be needed. He said Pfizer would conduct experiments to see if another dose is needed.

Israel has made a fourth dose of Pfizer and BioNTechVaccine for people over 60, people with compromised immune systems, and healthcare workers.

Israel found that a fourth dose of the vaccine increased the antibodies that protect against the virus five-fold a week after receiving the vaccine.

Omicron compounds employee scarcity, provide chain woes for retailers

One shelf stands empty while customers shop in Columbus, Ohio.

Matthew Hatcher | Getty Images News | Getty Images

Shorten store opening hours, temporarily close locations, and send letters of apology to customers for long lines and late appointments.

These are some of the unusual steps retailers and restaurants are taking when Covid cases rise across the country, fueled by the fast-spreading variant of Omicron.

Corporations no longer worry about state and local governments shutting down stores.

Instead, companies struggle with labor shortages as people call in sick, become exposed to the virus, or seek childcare. And there is a risk of further supply chain problems as the highly contagious variant spreads around the world.

“There’s no question that staffing is definitely a big issue this time around,” said Stephanie Martz, chief administrative officer and general counsel for the National Retail Federation. “It was perhaps less measurable when we were at one point in the pandemic when so much was closed and everything so scaled down.”

“I don’t know if I would go as far as to say that we have an unprecedented number that can’t work, but it’s high,” she said. “It’s really high.”

Covid cases have increased. According to a CNBC analysis of data compiled by Johns Hopkins University through Thursday, the US reports a seven-day average of about 600,000 new cases each day, an all-time high, and up 72% from the previous week.

Source: Lauren Thomas, CNBC

An increasing number of sick, exposed or overworked workers has caused retailers and restaurants to take unusual steps as their existing work problems worsen. Macys Shortening hours of operation in locations across the country for the remainder of this month. Walmart almost 60 stores in coronavirus hotspots temporarily closed in December. And other employers, including Starbucks, Chipotle and Nike have been forced to close some of their doors as they simply don’t have enough people to keep them open.

Walgreens Sent an apology email to customers this week noting customer complaints about long lines, out of stock items, and delays in Covid vaccines or test appointments. In the note, the company’s executives mentioned the many tasks that pharmacy staff juggle – namely dispensing over 55 million Covid vaccines and more than 23 million Covid tests while filling out over a billion prescriptions annually.

“The system has been under heavy load,” said James Kehoe, chief financial officer of Walgreens, on a conference call on Thursday on the company’s results. He said the company will spend around $ 120 million more on workers to help its elongated, thin workforce.

Morgan Harris is the shop owner of the Green Bambino in Oklahoma City. She said the store, which sells baby items from toys to strollers, is facing staff shortages and she feared it could get worse.

Morgan Harris

Regular opening times go ‘out of the window’

For understaffed retailers, reducing working hours is one of the first logical steps, said Craig Rowley, senior client partner at Korn Ferry and director of the company’s retail division. Some stores will be scaled back on weekdays when only a small percentage of sales are happening compared to busier weekends, he said.

He said pandemic-related changes could lead retailers to permanently rethink store opening hours, especially as more sales go online.

“The labor shortage of [Covid] goes to almost any customer-facing business, “said Rowley.

Morgan Harris owns Green Bambino, an Oklahoma City store that sells baby items such as onesies, diapers, and toys. She said she had to ditch one of the most important retail rules as it operates with four employees – less than half of the 10-15 people she would have expected. The store had to change its schedule. It is now open five days a week instead of seven.

Now she sees some corporate giants doing the same when they are hit by the “Great Resignation” and further squeezed by the wave of omicrones.

“In the past, you never changed your opening times in retail,” she said. “That’s out the window.”

Some companies have gotten better at using technology to notify customers of staff shortages or store closures. For example, a understaffed Chipotle location can turn off digital orders through their app and instead focus on in-store transactions while nearby restaurants take delivery and online orders.

Rowley said the good news is that retailers and restaurant chains at least survived the vacation rush. “The workforce is no longer what it was before Christmas, so companies have that advantage,” he said.

Retailers could even ask temporary vacationers to stay in the New Year and work extra hours, he added.

However, Harris said she feared Green Bambino may have to deal with leaner staff even if sales skyrocket. Annual sales rose to nearly $ 900,000 last year – 23% more than in 2020 and 14% more than before the pandemic in 2019.

Applications have slowed down to a trickle despite seeking the help of a recruiter. And she said the omicron wave hasn’t reached the region yet – which could mean more employees calling in sick.

“I assume that our staff will continue to shrink and not get bigger,” she said. “I have very little hope that all of a sudden we will find all these great people and attract them.”

In addition, the recent wave of the pandemic could further delay the return to continuous deliveries of popular baby items such as car seats and strollers. The business is pulling out of the furniture business due to delivery delays and higher freight costs. It stopped accepting deposits for many items because it couldn’t predict if – or when – those large items would be back in stock.

“I don’t feel like I’m reinventing business every two weeks like I was in 2020, but we have no idea what business to do after the pandemic,” she said. “The uncertainty will linger for a few more months, if not longer.”

A customer waits for a contactless roadside pickup at the Recreational Equipment Inc. (REI) flagship store in Seattle, Washington, USA on Thursday, May 14, 2020.

Chona Kasinger | Bloomberg | Getty Images

Muscle memory

Shoppers, on the other hand, have continued to spend money – even with some browsing online rather than down aisles or switching to roadside pickup or home delivery, which have become part of their muscle memory.

According to a survey by Coresight Research of more than 500 US consumers on December 27, compared to the previous weeks, avoiding some public places has crept in again slightly. An increasing number of consumers said they were withdrawing from activities such as international travel and using public transport. Almost 66% of respondents said they avoid any public place – up from 62% when the survey was conducted on December 13th.

About 38% of respondents said they avoided shopping malls and shopping malls and about 33% said they avoided restaurants, bars and cafes, up from 32% and 30% two weeks ago.

However, the company’s survey showed no significant changes in what consumers were buying or how much they were spending.

The hospitality industry may find itself in another downturn. Restaurant analyst Black Box Intelligence found that restaurant sales declined for the first time since mid-March in the week ending December 26, but the reversal was largely due to Christmas, which fell on a weekend that year, and the rise in omicrones .

OpenTable data shows that in the United States, fewer seats were reserved with online, phone, and walk-in reservations in the first week of 2022 compared to pre-pandemic levels, but consumers could have take-away switch or try to stick to New Year’s resolutions.

If that happens, it could mean Americans are spending on things rather than services. Christmas sales were well on their way to hitting a record high of up to 11.5%, according to the National Retail Federation. (The final numbers won’t be released until the end of next week.)

The retail company’s chief economist, Jack Kleinhenz, said: Increased consumer appetites for goods and reluctance to spend on travel, restaurants and other expenses could fuel inflation.

John Mercer, research director at Coresight Research, said that for the most part, shoppers “roll their eyes, take a deep breath, and sigh, and then move on as much as possible.”

“It’s very different this time,” he said. “Consumers were jabbed twice, three times. You have seen this before. It’s really obvious that Omicron is generally much weaker in other countries. “

Almost three in four Americans are fully vaccinated as of Thursday, according to the Centers for Disease Control and Prevention. To date, 73 million people have received a booster vaccination – that’s roughly 22% of the US population. And on Wednesday the CDC gave the go-ahead Pfizer and BioNTech‘s Covid Booster Shots for children from 12 to 15 years.

And there is some evidence suggests that Omicron is milder than previous variants, according to World Health Organization officials.

That could begin to change the outlook for Americans who get sick. The country reports an average of around 1,250 deaths per day, Hopkins data shows, well below the record highs after last year’s Christmas season, when the daily average was above 3,000 for about a month from January 2021. The death toll tends to fall, but the number of cases and hospital admissions increases.

Martz of NRF said both retailers and consumers understand the coronavirus better. That has led to a greater emphasis on tools like booster shots, home Covid tests, and better masks, rather than wiping down counters or installing Plexiglas panels.

One way the industry is moving forward is to host their annual conference in person. NRF’s Big Show is next week in New York City at the Javits Center – previously a mega-center for Covid vaccines and possibly the source of the first known case of omicron spread in the United States.

Martz admitted the conference will look different than it did before the pandemic. All participants must wear a mask and present a vaccination card. The booths in the showroom may have fewer staff. And the trading group will distribute Covid tests at home and host a mobile testing unit.

Up to 20,000 visitors are expected – around half of the visitors in 2019.

Still, she said, it feels right to move forward as the frontline retail workers go to work in person, day in and day out.

“We believe this is a reasonable time to somehow get back together,” she said, although “it won’t look like our shows have done in the past.”

CNBCs Nate Rattner, Lauren Thomas, and Amelia Lucas contributed to this report.

Cyprus reportedly discovers a Covid variant that mixes omicron and delta

CSL staff will be working in the laboratory in Melbourne, Australia on November 8, 2020, where they will begin manufacturing AstraZeneca-Oxford University’s COVID-19 vaccine.

Darrian Traynor | Getty Images

A researcher in Cyprus has discovered a strain of the coronavirus that combines the Delta and Omicron variants. Bloomberg News reported on Saturday.

Leondios Kostrikis, a professor of biological sciences at the University of Cyprus, named the strain “Deltacron” because of its omicron-like genetic signatures within the Delta genomes, Bloomberg said.

So far, Kostrikis and his team have found 25 cases of the virus, according to the report. It’s too early to say if there are any more cases of the stress or what impact it might have.

“We will see in the future whether this strain is pathological or more contagious or whether it will prevail against the two dominant strains Delta and Omicron,” said Kostrikis in an interview with Sigma TV on Friday. He believes Omicron will overtake Deltacron too, he added.

The researchers sent their results this week to GISAID, an international database that, according to Bloomberg, tracks viruses.

The Deltacron variant is coming as Omicron continues its rapid spread around the world, leading to a surge in Covid-19 cases. According to a CNBC analysis of data from Johns Hopkins University on Friday, the US reports a seven-day average of more than 600,000 new cases daily. That’s a 72% increase from the previous week and a pandemic record.

Read the full Bloomberg News story here.

Omicron variant prone to gas inflation, as Individuals hold purchasing, economist says

damirkudisch | E + | Getty Images

According to Jack Kleinhenz, chief economist at the National Retail Federation, the spread of the highly contagious variant of Omicron is likely to fuel inflation as Americans keep shopping instead of spending more outside the home.

However, the advisor to the major retailer said in a press release on Wednesday that he was not up to date with the latest wave of Covid Cases that trigger an economic slowdown or company shutdowns.

“Omicron’s impact on consumer demand is little known, but people who stay at home because of the option are more likely to spend their money on retail goods than on services such as dining out or personal entertainment,” he said in the press release. “That would put inflation under further pressure as supply chains around the world are already overloaded.”

He said that “each subsequent variation has slowed the economy, but the rate of slowdown has been less.” And he added that consumers may have more confidence from being fully vaccinated or hearing of milder cases of the variant.

Covid cases in the US hit a pandemic record of more than 1 million new infections on Monday, according to data compiled by Johns Hopkins University. According to a CNBC analysis of Hopkins data, the country now reports a seven-day average of more than 480,000 new infections, almost double the previous week.

The surge in coronavirus cases has prompted retailers and restaurants, including Starbucks, Apple, Nike and gap-Own Athleta to close stores or shorten opening times as they cope with scarce staff or intensify disinfection. Walmart in the interim nearly 60 US stores closed in coronavirus hotspots last month to disinfect them. Macys said on Tuesday that it is so Reduction of shop opening times for the rest of the month.

However, many of these stores have made it easier for customers to shop another way – from home delivery to roadside collection.

The National Retail Federation also doesn’t expect the pandemic to affect Christmas sales. It predicted sales in November and December Increase between 8.5% and 10.5% compared to last year and achieve record sales of $ 843.4 billion to $ 859 billion.

Kleinhenz later raised that forecast, saying in early December that Vacation sales could increase as much as 11.5% compared to the same period last year.

The trade group expects to announce official holiday sales next week after the Census Bureau released December retail sales data.

Omicron wave appears to have peaked in South Africa, London subsequent?

Health workers at the Steve Biko Academic Hospital on January 19, 2021 in Pretoria, South Africa.

Gallo Pictures | Gallo Pictures | Getty Images

Within a few weeks, Omicron’s Covid-19 variant – which was first discovered in November in South Africa and Botswana – has seen a sharp surge worldwide, leading to millions of new cases and the reintroduction of coronavirus restrictions in many countries.

The US and Europe have introduced booster vaccinations as soon as possible, according to the research of the Covid vaccine manufacturers PfizerBioNTech and Modern that the Omicron variant undermines the effectiveness of the two standard doses of their Covid vaccinations, but that booster shots increase the protection against the variant significantly.

Still, cases have increased in both regions, with the US reporting over 1 million new daily Covid cases on Monday, and the UK and France are also among those reporting a staggering number of daily infections, in the most recent numbers over 200,000 per day. Hospital admissions are also increasing steadily in the affected countries, although admissions and deaths remain well below previous highs.

As well as more and more evidence Experts are cautiously optimistic that the Omicron wave turns out to be sharper than with previous variants, but could also be shorter.

For example, South Africa believes its Omicron wave has peaked, and London – where Omicron cases spiked in December before the variant really hit the rest of Europe – could see a plateau of cases, according to experts, which is hopeful that the Omicron wave could soon peak elsewhere.

Omicron “may have peaked”

South Africa’s government made a statement on December 30th which said the country’s health ministry reported a 29.7% decrease in the number of newly discovered cases for the week ended December 25 (89,781 cases) compared to the number of newly discovered cases the previous week (127,753 ).

“All indicators suggest that nationally the country may have passed the peak of the fourth wave,” the statement said, with cases in all provinces except the Western Cape and Eastern Cape, which show an increase of 14% % and 18% respectively decreased.

Nonetheless, there has been a decline in hospital admissions in all provinces except the Western Cape, the statement added, noting that admissions were generally lower for the Omicron variant.

“Although the Omicron variant is highly transferable, there were lower hospital admission rates than in the previous waves. This means that the country also has free capacity to accept patients for routine health services. The number of deaths increases slightly “in all provinces.”

“Flood” of infections

Global experts have been keeping a close eye on South Africa’s Covid data as it was one of the first countries to discover the Omicron variant and alerted the World Health Organization, which on November 26th described the heavily mutated strain as a “variant of concern”.

Real-world studies from South Africa and Great Britain suggest that people infected with Omicron develop a milder disease compared to the previously predominant Delta variant. However, Omicron is far more transmissible, which means that a larger number of cases could put more pressure on health services.

When Omicron was first discovered by doctors in South Africa, They observed that their patients had milder illnesses that looked more like a cold than the fluwhose symptoms have been linked to previous strains of Covid. South African doctors also found that most of the patients hospitalized with Omicron were hospitalized for other reasons and did not need oxygen.

Other to learn published in International Journal of Infectious Diseases on Dec. 28 indicated that the Omicron wave of hospital admissions in Tshwane (a town in South Africa’s Gauteng province where Omicron cases rose in December) had peaked “within 4 weeks of its onset of 33 Days. “

Fareed Abdullah, director of AIDS and tuberculosis research at the South African Medical Research Council, compared the wave of omicron infections to a “flood” and described the rate of rise, peak and fall of the wave of omicrones as “jarring.”

Cautious optimism about London

Like South Africa, the UK was watched closely as it became the first European country to be hit hard by a surge in omicron infections in December before the variant spread to the US and mainland Europe.

The UK capital, London, saw a surge in omicron infections in December, but there are signs that cases are starting to stabilize, which in turn suggests that this wave of omicron will peak faster than the previous ones.

Epidemiologist Neil Ferguson, a professor in the School of Public Health at Imperial College London, said Tuesday he was “cautiously optimistic that infection rates in London are in that important 18- to 50-year-old age group that is fueling the Omicron epidemic , possibly plateau, “although he told the BBC radio show” Today “that” it’s too early to say if they’ll go under. “

“We may be seeing a different pattern of hospital admissions,” he noted, echoing other officials who warned UK hospitals are likely to be under further pressure in the coming weeks, and Ferguson noted that “we have high levels for a few weeks could see. “

Hospitalizations and deaths typically delay new infections by several weeks, but the UK’s widespread Covid vaccination program has helped keep hospital admissions and deaths far lower than in the early stages of the pandemic. Whether or not South Africa’s Omicron experience can be compared to the UK remains to be seen, given the differences in demographics, vaccination densities and population immunity.

Lawrence Young, a professor of molecular oncology at Warwick University, told CNBC on Tuesday that “it looks like cases in the 18-50 age bracket in London are plateauing” but are next Weeks will prove crucial to see how the Omicron Crisis plays out.

“The problem is now spreading to older age groups, which was likely fueled by the mixing during the holiday season and will lead to more severe outcomes and hospital admissions,” he noted, as well as “more infections in younger school-age children”. [that] will further increase the number of cases. “

“But given the widespread and rapid spread of omicrons along with the level of immunity in the population, there won’t be many more susceptible people to become infected, so the case numbers are expected to drop over the next few weeks, the same sharp drop as in South Africa due to different rates of infection in different parts of the UK affected by variable restriction measures, “he noted.

Danny Altmann, a professor of immunology at Imperial College London, told CNBC on Tuesday that South Africa’s omicron data and experience give cause for optimism, as does the fact that Europe’s “massive caseload” of omicron infections “is not proportional to one intensification “leads to hospital admissions and deaths regardless of the constraint that death takes time.”

Hospital admissions were the most important metric, according to Professor David Heymann, epidemiologist at the London School of Hygiene and Tropical Medicine.

“This coronavirus, like other coronaviruses, will be an endemic virus in humans and will likely cause a cold. That’s because immunity is increasing in the population and antibody levels in the UK are already over 90% by the time this occurs. ”The virus is modified – it won’t stop re-infecting or re-infecting people who have been vaccinated – but it will prevents it from causing serious illness, so it is extremely important to monitor hospital admissions, ”he told CNBC’s Squawk Box Europe on Wednesday. .