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    Published on: May 2, 2019

    This commentary is available as both text and video; enjoy both or either ... they are similar, but not exactly the same. To see past FaceTime commentaries, go to the MNB Channel on YouTube.

    It may be fast food, but McDonald’s appears to be interested in having more of a global focus.

    Kevin Coupe here, and this is FaceTime with the Content Guy, coming to you this week from one of the most unique McDonald’s in the country, if not the world - it is located in McDonald’s new headquarters building in Chicago’s trendy West Loop neighborhood. This McDonald’s doesn’t just sell the burgers, chicken sandwiches, fries and drinks that most of us associate - for better or worse - with the company. No, it also sells items from McDonald’s all over the world.

    There’s a Chicken McMuffin with Egg from Asia … a Mighty Angus Burger from Canada … a Manhattan Salad from France (though I’m not sure why it isn’t called a Paris salad, though maybe that’s what they would call it in New York) … Bacon and Cheesy Deluxe Potatoes from Spain … a Baci McFlurry from Italy … and other items.

    I think this is a smart thing for McDonald’s to do. We all know that McDonald’s is a global presence; New York Times columnist Thomas L. Friedman decades ago advanced what he called the “Golden Arches Theory of Conflict Prevention,” suggesting no two countries that both have McDonald’s will ever go to war, because they have a kind of economic self-interest rooted in globalism that actually can make the world a safer place. (This rule doesn’t really hold anymore, probably because McDonald’s is in more places and people are less enlightened and more willing to engage in stupid wars. But that’s another column…)

    But beyond McDonald’s global presence, this unique restaurant actually establishes McDonald’s universality, which is something very different.

    When I was in the global McDonald’s, just a few weeks ago when I recorded this FaceTime video, I suggested that it might benefit the fast food company to extend the concept throughout the chain, especially in the US … perhaps once a month feature a new global specialty, and rotate them constantly. It would do a lot for the menu - even I would go to McDonald’s for the opportunity to try the Chicken McMuffin with Egg, just out of curiosity. I also think it wouldn’t be a bad idea for Americans to try foods from other places, even if they’ve been McDonalds-ized … it would get us outside our sometimes narrow lanes of thinking.

    But then, go figure, Food & Wine reported that this is exactly what McDonald’s is planning to do, starting next month with items that will include “Spain’s Grand McExtreme Bacon Burger, Canada’s tomato-mozzarella chicken sandwich, Australia’s cheesy bacon fries, and the Netherlands’ Stroopwafel McFlurry.”

    Smart stuff. I’d try that Stroopwafel McFlurry.

    It always is good for businesses to think outside their lanes, to go beyond traditional boundaries and challenge themselves and their customers to think differently about the world, about consumption, about connections. McDonald’s is such a global presence that it actually has an advantage in this that a lot of companies don’t have.

    McWorld, indeed.

    That’s what is on my mind this morning, and, as always, I want to hear what is on your mind.

    KC's View:

    Published on: May 2, 2019

    by Kevin Coupe

    Two interesting stories about retailers trying new things and stretching their muscles in different ways…

    The Chicago Business Journal reports that “Lululemon Athletica Inc. will open a flagship ‘experiential’ store in Chicago’s Lincoln Park. The three-story, 20,000-square-foot space will offer food, drinks, fitness classes and a meditation room, in addition to apparel sales.”

    And the Chicago Sun Times reports that “this summer, Planet Fitness is offering teenagers free access to its gyms as part of its Teen Summer Challenge. From May 15 to September 1, teenagers ages 15-18 can work out and take fitness classes for free at any Planet Fitness location in Chicago.”

    To me, this is all about recognizing opportunities … opportunities to expand one’s reach and appeal, to figure out ways - consistent with a brand’s vision and strategy - to develop tactics that can result in growth.

    At a time of increasing competition - heaven knows that there are enough places to buy athletic gear and go work out - it is important and Eye-Opening for companies to identify ways to come to the consumer from different angles.
    KC's View:

    Published on: May 2, 2019

    delivery service Shipt have made a deal that will offer customers delivery of both prescriptions and other products throughout the country from some 6,000 CVS stores.

    Terms of the deal were not disclosed.

    The story notes that “Target is a natural partner for CVS, of course. The Woonsocket, R.I.-based chain bought Target's pharmacy business for $1.9 billion in 2015 and now runs the in-store pharmacy departments and health clinics in hundreds of Target stores.”
    KC's View:
    So natural a partner, in fact, that there is starting to be some speculation out there about an eventual merger of Target and CVS. I’m not sure if the two companies are better off together than they are the way things are now, but it would seem to be a natural next step. Maybe even inevitable.

    Published on: May 2, 2019

    Having opened three Nordstrom Local stores in the Los Angeles market, the iconic department store retailer now plans to open two of them in New York City, on the Upper East Side and in the West Village neighborhoods.

    Nordstrom Local is the company’s take on what the department store of the future looks like - no merchandise, but rather a hub where people can try on, purchase and pick up products they have selected online, have items altered, and get styling advice and maybe even have a cappuccino or a glass of wine while doing so. Depending on the location, Nordstrom Local may also offer manicures and/or shoe repair services.
    KC's View:
    This isn’t just Nordstrom throwing stuff against the wall to see what sticks - they’ve done research in New York and found that people really don’t like to leave their neighborhoods to go to stores, and so they want to bring the store to those neighborhoods to the best of their ability.

    Nordstrom is doing this even as it opens its more traditional department store formats in Manhattan for the first time. It is using those as hubs, and then serving the Local stores from their product selections and integrating its e-commerce capabilities in a way to energize the overall business.

    This is 21st century thinking … it puts the needs of the shopper ahead of the traditional priorities of the retailer, by realizing and acting upon the fact that the needs of the shopper have to be the uppermost priority for every retailer.

    Really smart … and it will be interesting to see the degree to which this strategy plays out, not just in markets where Nordstrom can create a hub-and-spoke construct, but even in markets where it may not have those hubs but feels that this may be a way to serve people living and working there.

    Published on: May 2, 2019

    The Washington Post this morning reports that the Texas lawmakers are considering legislation that would stop people there from using their Supplemental Nutrition Assistance Program (SNAP) benefits, otherwise known as food stamps, for the purchase of energy drinks, sugary soda, candy, and other products referred to as junk food.

    The goal of the legislation is to address the health issues often created by poor diet choices.

    Some context…

    The story notes that SNAP “provides nutrition assistance to around 40 million Americans, in a program costing taxpayers about $70 billion annually. According to a 2016 U.S. Department of Agriculture report, sugary drinks account for about 10 percent of SNAP food dollars spent. A study in the American Journal of Preventive Medicine found that stores market sugary drinks more heavily on days when SNAP benefits are issued, which might in part explain the $7 billion bill for beneficiaries’ sweet tooth.”

    Plus, the Post points out that “the Texas bill is not the first time legislators have attempted to limit government subsidies of sugary drinks. In 2012, then-Florida state Sen. Ronda Storms (R) sponsored a bill to restrict the purchase of soda and junk food with SNAP dollars. It did not pass. In 2011, the USDA denied a request by then-New York City Mayor Michael R. Bloomberg to bar the use of food stamp dollars to purchase sodas.”

    If it passes, the Texas bill would be implemented starting on September 1, 2019.
    KC's View:
    I’m sure that the lobbyists have descended on Austin in the hope that if they spread around enough cash, both over and under the table, they can somehow forestall this bill from becoming law. But I’ve always thought that this sort of thing is a good idea, that since SNAP benefits are public money, we actually have a responsibility as a culture to not spend it on stuff that isn’t healthy, or that, when consumed, can create health issues that cost us more money.

    The Post article actually quotes one expert as saying that “the U.S. agricultural system is designed to favor crops that yield unhealthful processed foods and that more nutritionally dense products typically are 10 times the price.” Which also doesn’t make a lot of sense to me.

    Published on: May 2, 2019

    The New York Times has a terrific story about Canada’s Indigo, a bookstore chain that has managed to challenge conventional wisdom about bricks-and-mortar weaknesses and create a business that continues to grow - and that has opened its first US unit in a New Jersey “luxury mall,” with plans to open more.

    According to the story, “Indigo is positioning itself as a ‘cultural department store’ where customers who wander in to browse through books can make impulse purchases of cashmere slippers or crystal facial rollers … Over the last few years, Indigo has designed dozens of other products, including beach mats, scented candles, inspirational wall art, Mason jars, crystal pillars, bento lunchboxes, herb growing kits, copper cheese knife sets, stemless champagne flutes, throw pillows and scarves.”

    While “it may seem strange for a bookstore chain to be developing and selling artisanal soup bowls and organic cotton baby onesies,” the Times writes, “Indigo’s approach seems not only novel but crucial to its success and longevity. The superstore concept, with hulking retail spaces stocking 100,000 titles, has become increasingly hard to sustain in the era of online retail, when it’s impossible to match Amazon’s vast selection.”

    You can read the entire story here.
    KC's View:
    There are a couple of lines from Indigo’s CEO, Heather Reisman, that I really like and that I think are applicable to many other retailers.

    First, she says that the goal of the retailer is to “curate ideas — big ideas — that we think are going to work across the board.” I love that.

    And then she adds, “In those categories where we play, it’s a curated assortment. We are not looking to be the everything store. Someone’s already doing that.”

    Exactly. If you are going to succeed, you have to bring your sense of taste, your ability to curate, a differentiated vision and the ability to retail around these core values. Otherwise, what’s the point?

    Published on: May 2, 2019

    MarketWatch reports that in the UK, Sainsbury “plans to compete head-on with Amazon by selling third-party products and services.” CEO Mike Coupe (no relation to the Content Guy, as far as we know) said yesterday that “the business would look for growth by expanding into wholesale, and using Sainsbury’s online platforms to host products, it doesn’t sell, for third-party partners.”

    Coupe told MarketWatch: “If a customer uses what will be a universal search function to find a birthday cake on our site we might also list a range of related products. If, for instance, we didn’t sell balloons we could use our distribution network to deliver them and take payment for a partner, or offer other options.”

    The move comes just days after UK regulatory authorities derailed Sainsbury’s plans to merge with Walmart-owned Asda Group, saying that it would result in higher prices for consumers.

    Companies like Sainsbury and Asda are seeking any and all methods of combatting German discounters Ali and Lidl, which have been expanding both their presence and market shares in the UK.
    KC's View:

    Published on: May 2, 2019

    • Wegmans has set an opening date for its first New York City location, a 74,000 square foot store located in the Brooklyn Navy Yard - October 27.

    A story in the Grub Street column in New York magazine points out that “inside shoppers will find 60,000 products, including 350 varieties of cheese … There will also be take-home meals created by chef David Bouley, a bar, and a café. Altogether, the new location will hire 500 employees, 70 percent of whom will be part-time.”

    • The Lakeland Ledger reports that Publix Super Markets had a pretty good first quarter - profit was up 44 percent to $981 million compared to $680.3 million in the same period a year ago, “juiced … by a $321 million gain on the value of stock Publix held in the corporate portfolio during this year’s first quarter, the report said. But even after subtracting the gain from first quarter 2019 results and making other accounting adjustments, such as a $32 million stock market loss in the first quarter 2018, Publix still had a $741.7 million profit in the quarter ending March 30, a 5.3% increase from the adjusted $704.2 million profit a year ago.”

    Quarterly sales were up 4.3 percent to $9.7 billion, while same-store sales were up two percent.
    KC's View:

    Published on: May 2, 2019

    We had a story recently about how some localities are trying to ban - or at least charge for - reusable paper cups, and I agreed.

    One MNB reader responded:

    Interesting conundrum. The waste of a disposable cup vs. an establishment refilling a customers reusable mug. I have seen some hygienically questionable coffee mugs being passed back to a barista for a refill. Might be even worse for self serve..... 

    From another reader:

    Seems to be plastic water containers are a far greater hazard. You seldom see headlines about those except when are rivers and oceans have a mass accumulation?

    And another:

    I'm not sure I want the general public bringing their own mugs to refill coffee. How long has that sat in their car unwashed and what about the food safety issues involved with that? The general public has no idea how to prevent foodborne illnesses. A paper cup that's recyclable is just fine thank you.

    On another subject, from MNB reader Kim Cates:

    Something struck me as I read your recent article about Amazon employees knowing the addresses of some Alexa users. In the article it minimizes the number of users who's personal information is accessible by saying, " a limited number of employees who require these tools to train and improve the service by processing an extremely small sample of interactions”.

    I'm curious, if there are 100 MILLION Alexa devices out in the world, just how many would it require to  be considered "an extremely small sample"? I'd consider 1% to be an extremely small sample, but in  this case, that's 1 MILLION devices being monitored. In this case, I think, size DOES matter…….

    On the subject of Marvel’s remarkable movie universe, MNB reader Monte Stowell wrote:

    Congrats to Marvel for having a 22-0 winning record. They obviously have a product that today’s customer wants and is willing to get, and paying the cost of admission and overpriced concessions. I have a friend who works for Regal Cinemas, and told me that concession sales account for over 65% of this profits. Streaming, for most people to watch movies is convenient, less costly for a movie ticket, and the cost of concessions is negated. The movie buying experience to watch first run movies is much too costly for most families today. Showing my age, I remember My parents and my three siblings going to the movies every Friday night. The cost was $1.00 for mom and dad, and $.50 for us kids, and about $1.00for goodies, mom always brought along a big bag of M&M’s for everyone. Mr. Rose, the manager, always saved the same six seats for us. Good old fashioned customer service. Saturday matinees were $.45 for us kids and a Sugar Daddy was $.05. A Coca Cola was a dime and a Carnation ice cream bar was Also a dime. The Saturday morning cowboy movies, the comedy shorts, and the serials. Ah yes, the good old days to go to the movies.
    KC's View:

    Published on: May 2, 2019

    In this new edition of the Retail Tomorrow Podcast, we discuss the unique partnership between Kroger and Microsoft, developing cutting edge innovations that will take each of them to the next level when it comes to things like digital shelving, video analytics, sensor networks, temperature tags … and beyond. And here’s the thing - the innovations that emerge are not proprietary, but will be available to any retailer looking to leap into the future.

    This podcast was recorded at GMDC’s recent Retail Tomorrow Immersion conference in Los Angeles.

    Our guests:

    • Kevin Fessenden, Senior Product Manager at Sunrise Technology, which is a Kroger company.

    • Chris Dieringer, Senior Director of Industry Solutions for the Retail and CPG Industry at Microsoft.

    The host: Kevin Coupe, MorningNewsBeat’s “Content Guy.”

    You can listen to the podcast here, or on iTunes and Google Play.

    Pictured, from left to right:

    Kevin Coupe, Chris Dieringer, Kevin Fessenden.

    KC's View: