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Old 11-13-2014, 09:39 AM   #1
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Retailing

An opinion.
A generic heading for a business that affects the economy, and each of us, individually. At this time of the year, one of the highest interest news items.

Today's lead news item covers an article about employee reactions to last month's "urgent agenda", quoted here:
Quote:
Last month, the retailer issued an “urgent agenda” memo to managers across the country pushing them to improve performance on “Chilled and Fresh” items in its dairy, meat and produce departments, part of an effort by Walmart to stem long-sluggish sales. It also reflected customer complaints that Walmart has received in recent years as it has expanded offerings of organic foods and produce, often at cheaper prices than its competitors.

The memo, marked “highly sensitive,” tells Walmart marketing managers to make sure that the company’s 4,965 United States stores discount aging meat and baked goods to maximize the chance that those items will sell before their expiration dates. The memo — leaked for public use by a Walmart manager unhappy about understaffing — also tells stores to be sure to “rotate” dairy products and eggs, which means removing expired items and adding new stock at the bottom and back of display cases.
Here's the article about employee reactions... much more than just the food market part:
Walmart workers react to New York Times expose on understaffing ยป peoplesworld

From my own experience, this points up the maxim that "The only totally controllable factor for retail profits, is payroll."

I suggest that this Christmas Season could see the greatest change, ever, in what we have come to see as "normal", in our shopping habits. Not just on-line shopping, but:

Malls
Store inventories
Warehousing
Personnel/Payroll
Accounting
Store size
Premium on "convenience"
Trucking/transportation
Downtowns

The transition is taking place already, with malls that are emptying, tighter inventories and the landslide change from full-time to part time employment. Driving the changes... profitability, a no-brainer but the problem exacerbated by the years of a slow moving economy and reaching a point where the economies of scale, the advances in tech, and the irreducible labor costs, defy the hoped-for recovery. A point of no return for the kid of retailing we've grown used to.

Until now, the saving factors have been through a switch to up scale, hi margin goods, and of course, in the food industry... to the specialty food (gluten free, diet, and organic) large scale introduction. The continued softening in the economy is squeezing middle ground. The change in profitability from "mall type" specialty stores, to Dollar Stores reflects the widening gap between high and low end markets.

You may see this as a normal continuum of the same kind of change that we see in every industry. To an extent, this is certainly true, but retailing as we know it today, plays a large part in our social lives, as well as other major 'things" that come out of this: shopping travel, advertising, impulse buying.

Not just the difference between on-line and in-store, but the future of the retail business as it may be five years from now.

Open end for thoughts on any part of the subject.
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Old 11-13-2014, 02:12 PM   #2
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A little bit more on the subject:
First on the Malls... Googling "Dead Malls" brings not only the Wiki subject, but some total websites dedicated ONLY to closed or closing malls.
Some additional views:

Quote:
.................................................. .....................
The death of the American mall | Cities | The Guardian

................................
Are Malls Over? - The New Yorker

................................
Sneakernomics: The American Mall Is Doomed - Forbes

.................................
Plunging mall traffic is killing some restaurants and stores - CBS News

BBC - Culture - The death of the US shopping mall
.................................
.................................................. ....................
The other interesting part here, is that although on-line shopping has had a strong impact, last year it only represented 6% of retail sales. Even with the latest plans to develop huge Amazon type warehouses, and the space age "drone delivery", it will be a while before this becomes the predonimant way to shop.

The second part of this change in retailing is the physical changes taking place. The wagon wheel type megamalls with the spokes that contain restaurants, services and small businesses will all likely change, as the social center becomes less of a magnet.

In our local mall, with a reduction of about 25% of the stores, the three restaurants have closed, and the movie theatre is moving to a separate outside of the mall complex location.

Another part of the change, is the expansion of chain, free standing builder and farm store national corporations, out of their niche positions and into furniture, electronics, food, clothing and even pharmaceuticals.

The fate of "downtowns" is less directional. This seems to vary, depending on the local business and the support of local governments. We have seen wide variations in the rejuvenation of retail ghost towns.

The test of the degree of retail change will come during the Christmas Season. A measure of the projected competition for business just arrived, with:

Walmart to Match Amazon Pricing in 5000 stores.

Walmart Will Start Price-Matching Amazon at Its 5000 Stores

Of course, the question is... How will you do this? Since Walmart, Penneys,
and Target have no salespersons per se, either the store manager or the checkout person is going to be pretty busy.
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Old 11-13-2014, 02:27 PM   #3
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At our local Sam's Club a couple of years ago, a news station did a story on them putting new labels on expired meat. Customers peeled up the new stickers and found the old expired ones underneath. The station went to Sam's and found more. They said that was their procedure outlined by their corporate office.

Going back to the mall stories, our mall is about 25% empty now. It's so strange and quiet some days. I rarely go myself, but we went the other night and it was spooky.
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Old 11-13-2014, 04:15 PM   #4
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I have been burned in the past buying milk, produce, and meat from the product closest to me. So now I always buy from the bottom on everything and get the package with the freshest date. Too bad for them...


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Old 11-13-2014, 04:24 PM   #5
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Originally Posted by Ally View Post
Going back to the mall stories, our mall is about 25% empty now. It's so strange and quiet some days. I rarely go myself, but we went the other night and it was spooky.
The one nearest us is like that - I don't know how they pay to keep the heat and lights on, let alone pay employees. A major anchor store closed up and left two years ago and that part of the mall has been razed. They're going to turn it into a strip mall attached to a regular mall. Not sure how that works.

Quote:
Originally Posted by Mulligan View Post
I have been burned in the past buying milk, produce, and meat from the product closest to me. So now I always buy from the bottom on everything and get the package with the freshest date. Too bad for them...
I look at the dates and pull from the back row often. Unless it's discounted because of close expiration date and I can cook it that day or the next. They seem straightforward about that - they'll leave the original sticker and put a yellow "discounted" sticker next to it with the same expiration date. It's usually good for ~40% or so off.
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Old 11-13-2014, 04:26 PM   #6
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Retail is beginning to die. Cities and Counties continually increase property taxes, making it tough for retailers. Brick and Mortar retailers need to be in the cities where taxes are the highest. Brick and Mortar stores cannot compete with on-line mass merchants that can be in low tax and lower income outlying areas. A few retailers will try, and subsidize their brick and mortar stores with their on-line profits.

Coming changes with immigration will only help retailers that can save on labor costs by hiring the masses to produce something that can help profitability. Retailers will train workers to do their small piece of the cog in the wheel, creating a specialized 'factory' worker in a retail environment.

Companies like Alibaba will make the connections between consumers and manufacturers even closer. Why go to Walmart or Target to get something made in China, when you can get the same product from China directly?
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Old 11-13-2014, 06:03 PM   #7
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Nowadays, I tend to shop primarily online even if the retailer has a brick and mortar location nearby.

It's not so much about price anymore, as the gap between online and retail prices has narrowed considerably IMO. For example, I recently found out that DW's shampoo was cheaper at Whole Foods (!!!) than on Amazon, where I used to buy it. But online shopping has its advantages, like a greater product selection, easier price comparison, and convenience. Also, I tend to stay away from mass market products so the internet allows me to access niche products that may be difficult or impossible to find at traditional retailers.

But if the retailer offers outstanding customer service at its brick and mortar location, then I'll actually step into that store.
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Old 11-13-2014, 06:30 PM   #8
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Nowadays, I tend to shop primarily online even if the retailer has a brick and mortar location nearby.
I find myself doing the same thing. It is just so much easier and the shipping costs, if any, are usually competitive with the cost of driving there and picking it up myself.

All other things being equal I usually can put off immediate gratification to save myself the trip.
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Old 11-13-2014, 06:42 PM   #9
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A couple of weeks ago I went to Sears to buy a new bra. The store was busier than I had expected it to be. At the checkout desk, I proffered my Sears card, which I have had since 1990, but last used about 3 years ago. The clerk informed me that due to their "new system" I would have to get a new Sears card but that she could process the application then and there, and I would get a discount on the bra. I was then asked for a bunch of personal information, including the numbers of my other credit cards! I decided against such an invasion of privacy and paid cash.

I don't think I will be shopping for my undies at Sears any more. And I'm going to cut up my old Sears card. I don't think they will be around much longer in Canada. And Target's entry into Canada has been an unmitigated disaster.
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Old 11-14-2014, 07:29 AM   #10
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An interesting article about Walmart's future being in small stores, rather than "big box".

http://www.huffingtonpost.com/2014/1...n_6152484.html
Even more interesting to me, was the mention of the migration of the population away from the suburbs and toward the urban areas.

If that is indeed a growing trend, understanding the macro economics may be a predictor of the economy for the coming years, not just for retailing.

Here's a recent article about college grads choosing urban locations.

http://www.nytimes.com/2014/10/20/up...abt=0002&abg=1

And one more:http://transitionvoice.com/2014/09/a...y-alternative/

Quote:
According to census data, population growth in outer suburbs, which had been the engine of residential growth for much of the 2000s, ground to a near halt from 2010 to 2011, increasing by just 0.4 percent. Cities and high-density inner suburbs, meanwhile, grew twice as fast, marking the first time in twenty years that city growth surpassed that of the exurbs. Our largest cities, meanwhile, grew at a faster rate than their suburbs for the first time in almost one hundred years.
Gettin' harder to keep up with this stuff.
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Old 11-14-2014, 11:34 AM   #11
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The closest mall to us is about 60% empty, and all the major anchors have left. It is called '(Mall-name) Square', but now everybody calls it '(Mall-name) SCARE' because of all the crime around there. I went out there about 2 years ago at Christmas, and you could have thrown a bowling ball all the way from one end to the other and not hit anyone. They did have 4 or 5 kiosks selling those gold grill things you put over your teeth--that was pretty cool.
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Old 11-14-2014, 02:06 PM   #12
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In the last five days we have placed three orders with Amazon. Can't beat shopping on line if you know what you want. Great prices, great delivery, and no need to go to the mall/shops to hunt around for what we want. Works for us.
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Old 11-14-2014, 04:43 PM   #13
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We went to a Phoenix mall not too long ago at around 5 pm. Parked in the closest stall to the building. Went into Sears where 2 salesmen approached us asking if we needed help. I told one of them that I needed a refrigerator water filter. We couldn't tell what kind to get, so I told him I'd come back the next day with my old filter to compare. He wrote down some figures on a scrap of paper. I came back the next day - he was happy to see us - and he pulled his notes out of his pocket. He got us the right filter - he was just happy to have a customer.

I don't know how these malls are staying open
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Old 11-14-2014, 05:45 PM   #14
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Wife told me exactly what she wanted for Xmas last year so I went to the nearest store that had the item on sale but they were sold out. Customer service was good and they checked thier computer and gave me a location not too far away with the item in stock. The location was the last anchor of a ghost mall. I went early in the morning and I was amazed how packed the mall was as a group of 20 people passed by me even though most of the stores were empty and the ones still in business were not even open. On my way out I saw the same group of people and realized they were seniors "mall walking" for exercise!
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Old 11-15-2014, 08:17 AM   #15
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Wife told me exactly what she wanted for Xmas last year so I went to the nearest store that had the item on sale but they were sold out. Customer service was good and they checked thier computer and gave me a location not too far away with the item in stock. The location was the last anchor of a ghost mall. I went early in the morning and I was amazed how packed the mall was as a group of 20 people passed by me even though most of the stores were empty and the ones still in business were not even open. On my way out I saw the same group of people and realized they were seniors "mall walking" for exercise!
Our Micropolitan area 154,000 pop., has a number of open malls, and one relatively small closed mall in my own town. Suffering the same loss of stores as most malls, (about 25%)... the inside mall is not giving up without a fight. Here are some of the things that we see happening... to keep the traffic coming, and instill life into a dying cause.
Mall Walking- The Mall opens at 8AM, though the stores don't open until 10AM, and the mall is comfortably heated. Both Summer and winter see many, many walkers (three times a many in winter).
The local hospital uses the mall as a health center, supporting a well used indoor playground for children and using two of the closed stores' space for
- Tai Chi classes twice a week... attendance about 70
- A lecture room with periodic classes on health issues.
Throughout the mall, many periodic kiosks... most come and go and follow fashion trends.
A small business based weekly class for different local services to present expertise on their offerings. Computers, Real Estate, Finance, Insurance etc... general informational classes.
Another closed store, used for presentations from the Community College, Library- Childrens' story telling sessions.
The regular "Santa Claus is here" sitting while the mall is open.
Pre teen beauty contests in the summer... Car showa, full mall health clinics, with testing, twice a year.
All in all, the local area is fighting hard to keep business and jobs in the area. Tax breaks have enticed some national chains to open in some free standing (closed) big box closed stores. Hobby Lobby, Rural King, Dunham Sports have replaced Kmart, and two national food stores. We no longer have a "closed" freestanding retail location.

This by way of noting that there is a pushback from some semi rural communities, saving many jobs and avoiding resident flight. A mixed bag!

And so, overall, slower sales, suburbs move to metro, and rural holding its' own. All waiting for the magic wand to restore jobs, and flashback to a booming economy...
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Old 11-15-2014, 11:18 AM   #16
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Our mall stores have been closing and moving out to independent locations. It's much easier to drive up to a single location and they don't have teens hanging out all over around it. Kohl's did this. Old Navy moved out to and independent location. Stein Mart moved. Mervyns was turned into a theater. The only business to move into the Mall is a big Barnes and Nobles.


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Old 11-15-2014, 04:15 PM   #17
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Wife told me exactly what she wanted for Xmas last year so I went to the nearest store that had the item on sale but they were sold out. Customer service was good and they checked thier computer and gave me a location not too far away with the item in stock. The location was the last anchor of a ghost mall. I went early in the morning and I was amazed how packed the mall was as a group of 20 people passed by me even though most of the stores were empty and the ones still in business were not even open. On my way out I saw the same group of people and realized they were seniors "mall walking" for exercise!
Edit to Add: Another curious thing about this dying mall is that there are many stores located on the fringe of the parking lot which are thriving. The newer "Town Center" shopping areas being built are not enclosed and seem to be more popular although parking is an issue IMHO....they don't really want too many people driving to these places.
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