Kroger is using a giant, robot-powered warehouse — instead of opening stores — to break into Florida, a new market for the country’s largest supermarket operator.
It plans to use the same strategy in the Northeast, where it will deliver online orders to homes and serve customers in New York, New Jersey and Connecticut for the first time.
The automated sheds are a key piece of the company’s growth strategy and an effort to turn e-commerce into a bigger, more profitable business in a notoriously low-margin industry.

Kroger’s delivery vans double as a billboard. The company is using them to get out the word that it’s now offering grocery deliveries in Florida.
Melissa Repko

GROVELAND, Fla.— Kroger wants to attract tens of thousands of new customers in Florida — and it plans to do that without opening a single grocery store.
Instead, the supermarket operator is relying on a giant warehouse of robots that help retrieve such products as bananas, milk and meat, and a fleet of delivery drivers that drop off online grocery orders at people’s doors. The automated warehouse — big enough to fit nearly eight football fields — is a pricey bet for the grocer and an illustration of its e-commerce ambitions.

Three years ago, Kroger struck a deal with British online grocer Ocado to build a network of customer fulfillment centers, which it calls sheds, across the U.S. It chose Ocado because of its track record in the United Kingdom, where it’s gained popularity with customers. Kroger has opened two sheds so far, with plans for at least nine more over the next two years.
Florida is ground zero as Kroger rolls out a national strategy to become a more dominant e-commerce player. It has invested at least $55 million just on construction of its shed alone. It has hired 900 employees and counting across the state. And it has announced plans to use the state as a blueprint to break into new markets and take on grocery rivals, including entrenched regional players like Florida-based Publix and retail behemoths like Amazon and Walmart with market values that are about 54 times and 13 times larger than Kroger.
Kroger has argued that the sheds will help it keep up with customers who are buying more food and household items online — while increasing the money it makes from each of those orders. With its Florida expansion, the grocer must not only prove the sheds can power a large, profitable e-commerce business in a notoriously low-margin industry, it must also win over customers in a brand-new market where some may not even know its name. It may be the largest supermarket operator in the country, but in the state, Kroger is the newcomer and, at least initially, the underdog.
The playbook that the grocer is developing with Kroger Delivery in Florida will be useful as it expands the business to the Northeast. Last month, it announced plans to build a shed to serve customers in New York, New Jersey and Connecticut for the first time. It has not shared its timetable for that project.

‘Once it’s obvious, it’s too late’

CEO Rodney McMullen, 61, joined Kroger in 1978 as a part-time stock clerk. He said the company must invest in digital and break into new markets to stay relevant.

In his office at Kroger’s Cincinnati headquarters, he keeps a list of the top 10 food retailers over the past few decades. The company names and their rise — or fall — from the list remind him how quickly retailers can go from dominant to obsolete.
“Every time that it [the retail industry] transitions, there’s going to be winners and losers,” he said in an interview with CNBC. “And all you have to do is be the one that’s in front of that trend change. And once it’s obvious, it’s too late.”

A short drive from Kroger’s campus, there are signs of its competition. Publix, a regional grocer with a loyal following, has billboards that advertise its delivery service. It is powered by third-party delivery company, Instacart.
Melissa Repko

‘Tell your neighbors’

Kroger’s delivery vans serve as giant billboards, signaling the grocer’s arrival in Florida. Each work day, Latoya Thornton puts on her Kroger uniform and gets behind the wheel to shuttle orders to customers. The vans keep groceries chilled in the Florida heat, even on long drives to far-flung rural communities with dirt roads.
But a short drive from Kroger’s central Florida shed is all it takes for Thornton to see the company’s competition — and its opportunity. Publix, a Florida-based grocer, has billboards advertising its delivery service, which is powered by third-party delivery company Instacart. Nearby, construction cranes dot the landscape in new subdivisions with big banners that call out “New Homes Coming Soon.”
The migration of people to the Sun Belt is why Kroger decided to plant its flag in Florida. Many Floridians have moved from other states where the grocer is already a household name, McMullen said, giving the company a quicker way to win business.
As U.S. population growth has slowed over the past decade, Florida has defied the trend with a more than 14% increase from 18.8 million in 2010 to 21.5 million in 2020, according to the U.S. Census Bureau. At least some of those new Floridians belong to wealthier households who moved to the state because of its low taxes — and they are an appealing customer base for grocers.
Kroger has nearly 2,800 stores across 35 states. In Florida, though, it has only one store, which is near the Georgia border. Elsewhere in the state, there are none of its many banners, which include Fred Meyer, King Soopers and Ralphs.
The Sunshine State is dotted with numerous Publix locations, a privately held grocery chain with deep roots and the largest share of the state’s market, according to market research firm IRI, which tracks sales of consumer packaged goods. Publix did not respond to a request for comment.
Publix rings up 37% of Florida’s grocery sales, while Walmart has a 26% market share, according to IRI. That excludes categories that IRI does not track, such as prescription medications, apparel and fuel. And it doesn’t include Costco and dollar store retailers.

Yet the market is still fragmented. Other grocers, including Aldi, Sprouts Farmers Market and Amazon-owned Whole Foods Market, see opportunity in Florida, too, and are opening new locations there.
Thornton said she realizes that part of her job is getting the word out about Kroger. At traffic lights, drivers sometimes honk at the delivery van, roll down their windows and ask for the location of the nearest store. She hands them business cards with delivery service details.
Some customers are homebound seniors or older residents who flocked to the state for the warm weather and moved into large retirement communities, such as The Villages. Others are busy parents or shoppers who see home delivery as a way to save time.
“I tell them the greatest tip you can give us is ‘Tell your neighbors,'” she said.
McMullen said Kroger’s online-only offering helps it stand apart. “If you go in with just physical stores, how do you distinguish yourself between what’s already there?” he said. “By going into the market with a shed, it’s really offering something that’s not offered in the same way today.”
Kroger Delivery’s service fee starts at $6.95 per delivery, on top of grocery charges. Florida customers can sign up for Kroger’s Delivery Savings Pass, an annual subscription service that costs $79 for unlimited delivery. To reel in new customers, Kroger has been dangling $15 discounts off of the first three orders.

Making the switch

McMullen declined to share how many customers Kroger has so far in Florida. He said it is “tracking ahead of where we thought we would be.” The service also has high repeat rates — a reflection, he said, that customers are pleased when they use it.
New customers tend to order fewer items initially, McMullen said. Over time, the home delivery orders resemble curbside pickup, he said, with baskets about “three times the size of somebody going into a store.”
One shopper who made the switch is Caitlin Zausner, a 35-year-old mother of two who lives in Bradenton — about 100 miles from Kroger’s shed in Groveland. When the pandemic began, she was pregnant, juggling a toddler and trying to reduce her family’s risk of getting Covid-19.
She stopped making frequent trips to her local Publix and started getting groceries through curbside pickup. Each Saturday, she put her 2-year-old, Emmy, in the backseat and drove to Walmart and a local farmer’s market to retrieve online grocery orders.
As they waited in the parking lot, she played kid’s music and kept dry Cheerios handy to keep the toddler busy. The weekly ritual took about an hour and a half.
That changed in June when Zausner read a Facebook post from a neighbor, who tried and liked Kroger Delivery. Zausner knew of Kroger from her sister-in-law who shops at its stores in Tennessee.
Even before the pandemic, Zausner said, she associated trips to the grocery store with stress: Will the baby sit in the stroller? Should she put her into a baby carrier? How will she keep her amused?
She placed an order and said she was impressed by the fresh produce and meats — and the slightly lower prices than Publix. Now, a Kroger delivery arrives each week and she can spend her Saturdays at the playground.
“It’s just a hassle to carve out time to go [to the grocery store] and have a list,” she said. “I don’t miss grocery shopping.”

Covering the costs

While Zausner is a fan, not all Americans are on board. Habits need to change for Kroger’s risky bet to pay off. More than $1 billion for construction spending alone is on the line as Kroger looks to build 20 facilities across the country over time.
Then, there are labor costs. Despite the help from automation, Kroger must employ hundreds of pickers and delivery drivers, who are employees rather than gig economy workers. Driver pay starts at $19 an hour.
Meantime, Kroger pays Ocado an undisclosed portion of every sale as part of its agreement.
The grocer is banking on the premise that online grocery shopping will drive a larger and larger percentage of total grocery sales — and that customers will embrace home delivery.
At the moment, Americans tend to favor curbside pickup when they order online. That approach has financial incentives for consumers and retailers, since shoppers can skip fees and companies can reduce delivery costs.

Like other grocers, Kroger’s online business took off when the pandemic began as consumers cooked and dined more at home. Its digital sales more than doubled in fiscal 2020 from the prior year. Kroger’s shares are up 35% year to date, putting its market cap at $31.94 billion.
As consumers return to restaurants and travel, growth has tapered off for online grocery shopping, but it has persisted at a much higher level than pre-pandemic. About half of U.S. households — 64.1 million in total — bought groceries online through ship to home, delivery or pickup in September, according to a survey in late September by Brick Meets Click, an independent research initiative, and sponsored by Mercatus, a digital commerce tech provider.

The customer is going to win, because the customer is going to be able to get what they want in an easier way. And to me, I think it’s cool to be in the middle of that.

Rodney McMullen
CEO, Kroger

Online grocery orders now drive 12.3% of all grocery sales versus 1.8% pre-pandemic, according to the polling done by Brick Meets Click/Mercatus. That translates to $8 billion of roughly $65 billion in monthly grocery sales.
Online grocery shoppers placed an average of 2.76 orders in September — a higher and more stable number than a year ago, its surveys said.
Kroger points frequently to Ocado’s success on its home turf. British shoppers have embraced online grocery shopping more than Americans and generally favor home delivery instead of pickup.
In the U.S., Kroger has said the sheds can churn out orders for curbside pickup, too — at least in markets where it has stores. This is already happening in Ohio.
Karen Short, a retail analyst at Barclays, said the landscape has changed dramatically since Kroger struck the Ocado deal. At the time, she said, Kroger felt an urgency to catch up to Amazon and Walmart. It was nearly a year after Amazon bought Whole Foods, a move that spooked legacy grocers. Meanwhile, Walmart was investing heavily in its e-commerce business.
Now, Short said, grocers can opt for lower-cost solutions. Walmart, for instance, the country’s largest grocer by revenue, is carving out parts of its stores and turning them into mini, automated warehouses — a strategy called micro-fulfillment. Albertsons struck a deal with third-party delivery company DoorDash.
“The problem you have now is Kroger is locked into this high capital expenditure commitment,” she said.

Latoya Thornton is one of about 500 drivers across Florida who drop off groceries for Kroger Delivery. Some customers are homebound seniors and others are just looking to save time.
Melissa Repko

Plus, she said, construction costs have likely ballooned from the grocer’s initial projections as the price of materials and labor rise. (Kroger declined to comment on the final cost.)
Short estimates that Kroger pays 4% or 5% of every dollar of sales to Ocado — less than the estimated 8% it had paid Instacart in 2018 when it signed the deal with the British online grocer. She said that lower fee is now likely in line with third-party players like Uber Eats and DoorDash, which could fulfill orders without the need for sheds.
She has a sell rating on Kroger, with a price target of $37. That’s roughly 14% below where Kroger closed Wednesday.

For grocers, including Kroger, a big challenge is turning e-commerce sales into ones that are just as profitable — or more profitable — than a sale at a store, even while taking on additional labor and delivery costs.
Kroger has said each shed will break even in its third year of operations and by the fourth year, it will match the profitability rate of a store. And it’s said one shed is equal to 20 stores worth of sales, but with only 60% of the capital and labor.
Matt Fishbein, retail analyst at Jefferies, said hitting that benchmark will be the grocer’s biggest challenge. If it doesn’t bring down the cost of fulfilling online orders, the addition of sheds in its current grocery markets could potentially divert foot traffic away from its stores and toward a sale that makes less money. He has a hold rating on Kroger, with a price target of $40. That’s about 7% below where shares are currently trading.
Short said Kroger’s Ocado deal could play out best, however, in new markets like Florida where it can gain share without cannibalizing store sales. In regions like Florida, the Northeast and Northern California, she said Kroger can beat rivals on price.

Robots glide on top of a grid and help retrieve groceries in Kroger’s automated warehouses. The robots are powered by software from U.K.-based Ocado.

“There’s pockets of the country where if you can do it and undercut your competitors and still maintain your margin — even with the fees that you pay Ocado — it seems kind of like a no-brainer,” she said.
Fishbein said Kroger’s first-party approach could give it an advantage over other grocers that use third parties, even though that comes with higher costs. He compared it to restaurants that rely on delivery companies and give up aspects of customer service, such as making sure that food arrives hot and having the data to make product recommendations or communicate directly with that customer.
But Fishbein said simply recruiting customers could trip up Kroger. Some shoppers are already hesitant to buy items like steak and fruit online, since they prefer to check for quality and ripeness.
“Why would you think that Kroger delivering it is going to be fresher and better than you just getting off your butt, getting in the car and going down the street to Publix?” he said.
The Ocado deal is just one facet of its e-commerce strategy, McMullen said. The company also recently signed an agreement with Instacart to offer deliveries in as little as 30 minutes nationwide.

Kroger is already doubling down on Florida. It will add two smaller-sized fulfillment facilities to serve the southern part of the state. It already has two hubs in Jacksonville and Tampa where fleets of additional trucks can take filled orders and fan out from there to help expand its delivery area. One of these new sites will be a micro-fulfillment facility powered by Ocado.
The expansion will allow it to deliver to customers in as fast as 30 minutes with an assortment of 10,000 items and to deliver same-day and next-day orders with 35,000 items, Kroger said. It hasn’t disclosed the timetable for this project nor its costs.
McMullen shakes off the naysayers. He said he finds the speed of change in his longtime industry energizing.
“The customer is going to win, because the customer is going to be able to get what they want in an easier way,” he said. “And to me, I think it’s cool to be in the middle of that.”

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New data from Goldman Sachs’ 10,000 Small Business Voices finds food, restaurant and hospitality owners feeling an outsized impact from the Covid pandemic’s continued effects on operations.
Nearly 100% have seen an increase in operating costs, with 93% saying inflationary pressures have risen since June, having negative impacts on finances.
The data show 79% say workforce challenges have worsened since before the pandemic, compared with 64% in the broader small business community.

Ruby Bugarin owns two restaurants in California and is being hit by rising supply chain struggles and inflation.
Courtesy: Ruby Bugarin

Restaurants around the county were looking ahead to the economy’s reopening over the last few months, as Covid vaccines became more widespread and pent-up consumer demand was palpable.
But headwinds from supply chain disruptions to a labor shortage and rising costs are hitting the industry as the contagious delta variant clouds hopes of a return to normalcy.

Food, restaurant and hospitality small business owners are more worried than most about the pandemic’s continued disruptions to operations, according to new data from the Goldman Sachs 10,000 Small Business Voices program. The data find 84% of owners in these sectors are concerned about the impact of rising Covid-19 infection rates on business, compared with 75% of the overall small business population.
Nearly all have seen an increase in operating costs, with 93% saying inflationary pressures have risen since June, having negative effects on finances.
The data subset of 117 food, restaurant and hospitality owners comes from a broader survey of 1,145 participants in the Goldman Sachs 10,000 Small Businesses program earlier this month.
The figures underscore the sustained pressure facing restaurants even in an economy that has rebounded from the worst of the damage inflicted by the coronavirus. While the rollout of vaccines and looser public health restrictions have moved the industry closer to normalcy, challenges abound as restaurant owners look toward the fall.
Ruby Bugarin, who runs Margaritas and Pepe’s restaurants in the greater Los Angeles area, said both the availability of goods and higher costs have hit her businesses. Products like crab are more challenging to find, chicken and pork costs have risen more than $1 per pound, and prices of other goods have soared.

“The past two or three weeks the price of avocados have gone from about $40 a case to $85 a case. So that’s more than double,” Bugarin, a member of the Small Business Voices program, said. “We can’t do the same thing to our customers — we raise prices once or twice a year.”
Labor costs are also rising at her two restaurants, which together have 63 employees. Bugarin said she would like to add a cook or two at each location, but instead is paying her current staff overtime weekly.
Labor challenges have also hit restaurant, food and hospitality owners like Bugarin at higher rates than seen in the broader small business community. The data show 79% of those business owners say workforce challenges have worsened since before the pandemic, compared with 64% overall.
Recent data from the National Federation of Independent Business underscores the labor issues weighing on small business optimism. Unfilled job openings were above the 48-year historical average in August for the second month in a row.
“In June, 67% of small businesses, despite inflation, despite the workforce challenges, said they thought the U.S. was headed in the right direction,” said Joe Wall, national director of Goldman Sachs 10,000 Small Businesses Voices. “That number is now 38%. The delta variant is for sure theme No. 1 in terms of why sentiment has shifted, and then you pile onto it, the inflation dynamic and the workforce challenges.”
As the pandemic taxes restaurant operators, Goldman’s data found nearly 40% of food and hospitality businesses say they expect to have to take out a loan or line of credit for their business this fall or winter. That compares with 29% of businesses overall.
The Small Business Administration recently announced an overhaul to the Economic Injury Disaster Loan program for businesses. The loan cap will increase to $2 million, and recipients will be allowed to use the funds to prepay business debt, which would let restaurants put the money toward commercial debt and more.
“At a time when there is still an extreme need for small business restaurants to access working capital, these changes will improve the outlook for thousands of operators and will lift the economic outlook for communities small and large,” said Sean Kennedy, executive vice president of public policy at the National Restaurant Association, said in a statement. The group worked with the SBA on the new terms for small businesses.
Beyond these changes, small business and restaurant owners and advocates have called on lawmakers to replenish the $28.6 billion Restaurant Revitalization Fund. It provided grants to the industry but was quickly tapped out due to high demand.
“We were able to disperse it to over 100,000 businesses across the country. However, the demand was 2.5 times that amount,” SBA Administrator Isabel Guzman told CNBC last month of the RRF. “There are still restaurants, food and beverage businesses out there who need support, we know they were the hardest hit, and are oftentimes going to be the last to reopen in communities, yet they define so many of our Main Streets. However, I can’t comment on specifically what Congress’ actions will be, but the SBA would stand ready to administer these programs swiftly and efficiently and equitably.”

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Homesick candles
Source: Homesick

For retailers looking to compete with Amazon around its annual Prime Day event, it’s not all about offering deep discounts to catch customers’ attention on the internet.
Start-ups like Warby Parker, Allbirds, Outdoor Voices and Everlane rarely offer promotions. Many of these companies have built their businesses online around a playbook that essentially says: We will never go on sale.

“As a brand, we don’t have sales,” said Brian Berger, CEO of the direct-to-consumer men’s sweatpants maker Mack Weldon. “We have a permanent loyalty program. … And that gets us out of the cycle of having to think about promotions and retraining customers in a way we wouldn’t want them to behave. We want them to shop whenever they want.”
Instead, around Prime Day and through this holiday season, Berger said, Mack Weldon will be boosting its marketing efforts, especially on social media. The brand launched its first-ever television campaign in June, which it continues to run. Its sweatpants have surged in popularity during the pandemic, with consumers looking for comfortable clothing. At one point early on during the Covid-19 crisis, Mack Weldon was selling 1,000 pairs of sweatpants per day, Berger said.
“During the holidays, you have to break through the noise and have a great offer in the market,” Berger said. “And there are other ways to break through the noise,” besides being promotional, he said.
Men’s activewear brand Vuori also launched its first-ever TV ad campaign on Monday.

‘Transcend dealbuster culture’

According to Harley Finkelstein, president of Shopify, the e-commerce platform for many direct-to-consumer brands including sneaker maker Allbirds, “deals are just one of the things shoppers are paying attention to” during the holidays.

“This is the year that purchases with purpose will transcend dealbuster culture,” he said. “More so than in any other year, consumers will vote with their wallets for merchants that align with their values — choosing to support Black-owned businesses, local merchants, and socially and environmentally conscious brands.”
Cookware brand Abbio won’t be on sale, either, during Prime Day.
“One of the advantages of having a strong direct channel is we don’t need to compete with Amazon on Prime Day,” said Jonathan Wahl, Abbio co-founder and CEO. “It’s a different customer and a different business strategy altogether.”
Prime Day is “all about the ‘deal’ as opposed to the value of the brand or the offering,” Wahl said.
Still, some brands might be choosing to break from the unofficial direct-to-consumer playbook. Some already have — in a bid to try to move inventory piled high in stock rooms and coax consumers to spend a little extra during the global health crisis.
Last month, luggage brand Away held its first sale in its roughly five-year history, promising deals of up to 50% off its bags — some of which retail for more than $400. 
In the thick of the coronavirus pandemic, Away said the sale, which was held both online and in its stores, outpaced the brand’s performance during every prior Black Friday and Cyber Monday combined, exceeding even its “most aggressive expectations.” Some customers reported website outages because of the heightened traffic around the event, while others later reported their shipments were delayed. They took to the company’s official Twitter account to complain.
While Away doesn’t currently have plans for another sale, during the holidays it will be releasing a number of new products, according to Brendan Lewis, vice president of communications and corporate affairs at Away. 
Meantime, apparel brand Everlane also ran a 25% off sitewide sale during the pandemic, claiming customers could find discounts on items that “usually don’t go on sale.” 
One email sent to customers in March about the event read: “We’ve never done it before. But there are a lot of firsts right now.”

“Most direct-to-consumer brands are nimble enough that they can adapt and roll with the changes that are happening,” said Taylor Sicard, co-founder of Win Brands Group, which owns a number of brands including the candles company Homesick. “This entire year is a great example — brands have had to adapt week by week, month over month.”

Partnering with Amazon

Two of Win’s brands, Homesick and ring maker Qalo, will hold sales, for 10%, 15% and 20% off, around Prime Day this year. Shoppers can actually find both of them on Amazon, in addition to their own websites. Qalo has been selling on Amazon since 2014, and Homesick since Nov. 2017.
“A lot of brands are hesitant to go in that direction, and there is good reason for it,” Sicard said about selling some its products on Amazon. “It is a very restrictive platform. You don’t have analytics on data … and then you also have very limited activity with the audience because Amazon owns the audience, not you as a brand.”
“But the way I see Amazon, I treat it the same way I would a big-box store, just on the internet,” he said.
Some other direct-to-consumer brands agree. The sheets start-up Brooklinen, mattress brand Casper and dog accessories maker Barkbox can also be found on Amazon.
Benefitting from Amazon’s annual Prime Day surge could be enough reason for some retailers to join its platform. Worldwide sales from the 48-hour shopping event, which kicked off Tuesday, are forecast by eMarketer to jump 43% from 2019 levels to $9.91 billion.
But for retailers not on Amazon, there’s also good reason to compete with another sales event of their own.
Sixty-three percent of consumers say they are “very likely” to compare Prime Day promotions with other retailers’ deals before they make a purchase, according to The NPD Group, which tracks the receipts of more than 130,000 consumers. And this year, with a Prime Day being held in October rather than July, 18% of consumers told NPD they believe they’ll find the best holiday deals around Prime Day, only slightly trailing the 20% of consumers who think that will come on Black Friday. Cyber Monday was the third most popular option in NPD’s poll.
According to Finkelstein, 55% of Shopify merchants believe consumers will start their holiday shopping even earlier this year.
“I do think that, at the end of the day, if you’re going to be promotional, a huge part of maintaining brand equity is the storytelling component,” said Mark Chou, founder of Bradhurst Ventures, which advises consumer-facing brands.
“If you were to just discount and say nothing else, in some ways it’s almost too obvious what you’re doing,” he said. “Consumers are not dumb, and they understand some industries are challenged. But if you’re able to still tell a story around why you’re doing something it can be brand assertive and not dilutive.” More

A massive funding package to combat the impact of coronavirus did not get enough votes in a key Senate procedural vote Sunday evening. The stalemate came hours after Democratic leaders warned that the bill was not to their liking because they said it did too much to bail out companies and not enough to help workers. […] More

Dr. Scott Gottlieb, former FDA chief in the Trump administration, told CNBC on Friday that White House doctors are “probably considering” whether to give President Donald Trump remdesivir, Gilead Sciences’ the antiviral drug approved for treating Covid-19 under emergency use authorization.
“Remdesivir is indicated for hospitalized patients. But there is thinking that it probably improves outcomes earlier it is introduced in the course of the disease,” Gottlieb said in a “Squawk Box” interview.

The main question on how to proceed now that the president, first lady Melania Trump and White House advisor Hope Hicks tested positive for coronavirus is whether they are exhibiting symptoms, Gottlieb said before the New York Times reported Friday morning that the president is said to be exhibiting some mild symptoms.
Trump, 74, tweeted  at 12:54 a.m. ET that he and the 50-year-old first lady tested positive for Covid-19, hours after the president said he would begin a quarantine process after the 31-year-old Hicks’ positive test.
The president and first lady are “both well” at the moment, according to a statement from White House physician Dr. Sean Conley, released shortly after the president’s tweet. Conley also wrote that he expects Trump to “continue carrying out his duties without disruption while recovering.”
“They all have a good chance of doing well. [Trump] was previously in good health by all reports and will get excellent care,” Gottlieb said.
However, Gottlieb said, “The president is in a high-risk group simply by virtue of his age, 74. He’s also reported to be overweight.”

Gottlieb said the White House is likely to “cast a wide net” on tracing whom the president came into contact. “I wouldn’t be surprised if they tested the whole compound today, and brought in some different testing equipment so they can get a more sensitive result,” he said.
The goal will also be to protect Vice President Mike Pence, Gottlieb said. Pence and the second lady, Karen Pence, tested negative, the White House announced Friday. Treasury Secretary Steven Mnuchin also tested negative on Friday morning.
The vice president is next in line to the presidency, followed by the speaker of the House, Democrat Nancy Pelosi, and Senate president pro tempore, Republican Sen. Chuck Grassley of Iowa.
Trump is scheduled to appear at the second presidential debate with Democratic nominee Joe Biden on Oct. 15 — just 13 days after he revealed his diagnosis. During their first debate Tuesday night, the president, generally eschewing mask-wearing and downplaying the virus, mocked Biden for wearing masks.
The president’s positive test underscores how widespread and contagious the coronavirus is, Gottlieb said. The “bottom line message” is everyone is vulnerable, Gottlieb said.
How Americans view the virus given Trump’s diagnosis depends on his condition — if Trump gets sick, people could get the message of the severity of the disease, Gottlieb said.
However, if Trump does not exhibit any symptoms, it could “cut the other way” and people could view the virus is not that bad, Gottlieb said.
Democratic presidential nominee Joe Biden tweeted Friday morning: “Jill and I send our thoughts to President Trump and First Lady Melania Trump for a swift recovery. We will continue to pray for the health and safety of the president and his family.” Biden made no mention of whether he was tested in the tweet.
Disclosure: Scott Gottlieb is a CNBC contributor and is a member of the boards of Pfizer, genetic testing start-up Tempus and biotech company Illumina. Pfizer has a manufacturing agreement with Gilead for remdesivir. Gottlieb also serves as co-chair of Norwegian Cruise Line Holdings′ and Royal Caribbean’s “Healthy Sail Panel.”  More