No Turn On Red

As speculated last week, Starbucks has announced layoffs and another round of store closings. For the quarter ending December 28, the coffee retailer announced a 69% drop in net income and a 10% drop in same store sales.

These store closings are on top of the 600 company-owned stores the chain closed in 2008. 200 of the closings will be in the United States with 100 closing oversees.

CEO Howard Schultz also announced that he is reducing his base pay to $10,000 from $1.2 milllion.

Follow reaction to the announcement in the comments posted over at Starbucks Gossip.

Did you find this post helpful? Then, you should also view these posts:

• More Retail Layoffs (1)
• Macy’s Closing 11 Stores (0)
• Is Atlantic City the next retail mecca? (2)
• Five ways you, as a customer, can improve customer service (2)
• 6/4/06 Retail Notes (0)

With the disappointing Holiday season behind us, the layoffs and retail store closings are continuing to mount:

Today, Home Depot has announced that they are closing their line of Expo home design centers and trimming support staff, resulting in 7,000 reduction in staff. With both home sales and the economy down, shoppers aren’t looking for high end home design solutions right now. The retailer is quick to note that the layoffs will not impact any customer service positions at the Home Depot proper chain.

It appears that their Expo stores weren’t performing well during the housing boom, so it’s no surprise that they would be doing even worse during the current economic conditions.

Another victim of the housing slump is Williams-Sonoma. On Friday, the retailer announced an 18% reduction in their workforce. In addition to stores being effected by the layoffs, the retailer will also close a call center in Pennsylvania and a distribution center in Memphis. I think the high end housewares stores have been hurt badly by both the economic downturn and mid-market retailers like JCPenney and Kohl’s.

Starbucks, who closed 600 stores in 2008, is expected to eliminate 1,000 jobs at their corporate headquarters and reducing district managers and field employees. The published report, prepared by investment firm McAdams Wright Ragen, speculates that these layoffs will happen in early February and won’t effect store-level barista positions.

And don’t forget that last week Circuit City announced that they are closing all US operations with job losses effecting up to 35,000 people.

Did you find this post helpful? Then, you should also view these posts:

• Circuit City fails to find buyer; will close all US stores (2)
• Starbucks announces layoffs, more store closings (0)
• Macy’s cutting 7,000 jobs (0)
• Macy’s Closing 11 Stores (0)
• Holiday’s Over (1)

A few of the stories I’m reading and wanted to share today:

John Zogby’s got a very insightful look into the political trends of retail consumers and dives behind the numbers to make sense of it all. He looks at presidential election polling numbers, the retailers the customers shop at, and how this relates to the retailers’ branding.

J.Crew’s website has had their share of mistakes and downtime lately. Church of the Customer is talking about the apology e-mail that the retailer sent out to their customers and what this means for the company.

Matt at A New Marketing presents a clean, easily digestable definition of what social media is.

.. and finally – Starbucks is offering a $2 discount on iced beverages in the afternoon when you buy a drink in the morning. I think this is a smart move that should drive repeat business throughout the day. Besides that, I’m selfish and now look forward to saving a little bit of money on my second trip to Starbucks every day.

Did you find this post helpful? Then, you should also view these posts:

• Where’s the Petite Department? (0)
• July Retail Sales Disappoint Everyone (0)
• Five ways you, as a customer, can improve customer service (2)
• 6/18/06 Retail Notes, Father’s Day Edition (0)
• 6/11/06 Retail Notes (0)

Let’s play a game. I’ll name two retailers and you guess which one has more locations in the five boroughs of New York City. Ready?

Starbucks vs. Dunkin’ Donuts

McDonald’s vs. Burger King

Rite Aid vs. CVS

Coach vs. H&M vs. Pinkberry

Best Buy vs. American Apparel

According to a new study from the NYC-based think tank, Center for an Urban Future, the numbers are suprising.

Dunkin Donuts has more locations (341) in the five boroughs than Starbucks (235). Though Starbucks’ has more than double the amount of Manhattan locations (186 vs 78). McDonald’s has 248 locations compared to Burger King’s paltry 92. Rite Aid has 209 locations to CVS’s 108, but not as much as NYC-favorite Duane Reade (with 216 locations). Coach and H&M have as many NYC locations as California upstart Pinkberry (all with 12 locations in the city) and would you believe that American Apparel has more locations than Best Buy (16 vs 9).

The details revealed by the study are interesting, with a thorough breakdown of how many locations each retailer has in each borough. It is worth downloading the PDF and taking a look at their results.

Couple of interesting commentaries on the report from the New York Daily News, the New York Observer, and the New York Post.

Photo above from Flickr user lab2112, used under Creative Commons.

Did you find this post helpful? Then, you should also view these posts:

• Five ways you, as a customer, can improve customer service (2)
• 6/11/06 Retail Notes (0)
• Sick economy, healthy business (0)
• Report: Rite Aid to buy Eckerd, Brooks drug stores (3)
• Express Lane for August 6, 2008 (0)

Entering the weekend, here’s some things that I’m reading tonight:

Starbucks is pulling Jones Soda out of their stores in order to create room for more salads. Interesting.

Kelly Clarkson has cancelled her summer tour and one Consumerist reader has found out that Ticketmaster’s non-refundable fees are, well, non-refunable.

Margaret Brennan at CNBC is talking about how critical the next few days are going to be for retailers. Get rid of the clothing now or else you’re selling it marked down in July.

Finally, Canadian retailer Futureshop will be opening forums on their website next week. Allowing customers to interact with employees, it will be a very interesting website to watch. Will parent company Best Buy follow suit?

Did you find this post helpful? Then, you should also view these posts:

• Starbucks announces layoffs, more store closings (0)
• NYC Chain Stores, By the Numbers (0)
• More Retail Layoffs (1)
• Jim Cramer on Kohl’s and JCPenney (0)
• Is Atlantic City the next retail mecca? (2)

Just a few quickies this weekend:

In case you missed in, Andrew Young resigned from his position with Wal-Mart after putting his foot in his mouth.

EnVision Marketing Group has partnered with Kroger Food Stores to offer advertising on the conveyor belt at the supermarket checkout. Interesting concept. Whenever I go to my local supermarkets, I notice how much advertising they cram in there. Any marketable space seems to be taken up by an ad for a local contractor or lawyer. One food store has a model train that goes around the front end, with the track suspended by wire from the ceiling. The train pulls a number of cars with advertisments for said local companies. But my question is, who’s looking at it? Will these conveyor advertisments actually work or will they just be another outlet for an unnoticed advertisment for the local computer repair place, although this time covered in meat juice?

Over at Starbucks Gossip, one story has ignited a debate over the cost of two ounces of coffee. Read the story and read the comments, some very interesting points are brought up from both customers and employees alike.

I like throwing in some local retail notes, so here goes: looks like White Castle has an application for construction on Route 36 in Hazlet, NJ. That’s the last thing I need nearby! Also, lots of development at the Monmouth Mall as Jessica McClintock and Yankee Candle are opening new stores while The Limited is opening up a new location.

Until next week.

Did you find this post helpful? Then, you should also view these posts:

• Express Lane for August 6, 2008 (0)
• 6/4/06 Retail Notes (0)
• 6/11/06 Retail Notes (0)
• Wal-Mart’s Urban Tale (0)
• Wal-Mart using Facebook to target young consumers (0)

Let me say this first, I love Atlantic City. I do enjoy playing cards and sitting in front of an Elvis slot machine. Although my last few trips haven’t been very successful, I have enjoyed watching the development of The Pier at Caesars unfold.

The Pier at Caesars is a $200 million redevelopment project of the former Ocean One Mall on the beach in Atlantic City. Boasting a mix of high and mid level retailers (Coach, Gucci and Louis Vuitton meet Ann Taylor, Quiksilver, Gymboree and Victoria’s Secret), this mall has been eagerly anticipated by tourists and residents alike.

The mall officially opened on Tuesday, although it is only the first phase. About a dozen of the ninety stores are open, with none of the resturaunts open yet. Developers say that more stores will open throughout the Summer with everything open by Labor Day. Work is still being done on some of the more decorative pieces, including fountains and billboards.

A good overview is the mall and the opening is available from the Associated Press: Once Tacky Resort City Gets More Class. The Press of Atlantic City has another, localized article about the opening which says that opening day was not all that impressive to some shoppers.

The Pier at Caesars is the second major retail project the town has. 2005 saw the opening of The Walk, aka the Atlantic City Outlets. This $76 million retail development project is beautiful – a great mix of stores that seems to be doing extremely well. From Gap to Polo Ralph Lauren to coffee at Starbucks, I have enjoyed walking this outdoor mall. Last year, the Baltimore Sun had an excellent article about the retail development of Atlantic City, with a focus on The Walk.

With all of this retail development in a city that is increasingly focusing on non-casino offerings, Atlantic City has become a great place to visit for those who are interested in visual merchandising and creative retail solutions. I have already enjoyed trips to The Walk and I am very interested in going to see The Pier at Caesars. I believe shoppers and tourists will respond well to the mix of stores available in Atlantic City.

This isn’t the end of large scale, non-casino development in Atlantic City. I can’t wait to see what the next few years bring.

Did you find this post helpful? Then, you should also view these posts:

• Growth in Atlantic City retail; expansion and new stores at The Walk (2)
• Retail roundup – Q1 results, American Eagle (0)
• Retail’s May numbers off to a positive Summer start (0)
• Retail Roundup: Abercrombie, American Eagle, Kohl’s, Wal-Mart (0)
• Five ways you, as a customer, can improve customer service (2)

The second half of last week was crazy busy for me. Let me catch up on a few of the stories I missed last week:

Fendi sues Wal-Mart over sales of fake handbags:

Italian fashion group Fendi S.R.L. sued Wal-Mart Stores Inc. in U.S. federal court on Friday, accusing the world’s largest retailer of selling counterfeit handbags and passing them off as genuine at its Sam’s Club warehouse stores.

Sam’s Club stores in California, New York, Florida and other states sold knock off handbags, wallets and key chains that were identified as “genuine” Fendi products, according to the lawsuit filed in U.S. District Court in Manhattan.

The suit by Fendi said that Wal-Mart has never purchased its products and never asked Fendi if any of the items bearing its trademark were genuine.

Having never stepped foot into a Sam’s Club, I’m suprised to even imagine that they would carry any Fendi products. This suit will be interesting to watch to see where the blame, if any, lies within Wal-Mart. Is this the case of an over-zealous buyer making sure they’re meeting “always low prices” or is this the case of Fendi not happy that their goods somehow ended up in Sam’s Club?

Good coverage in the comments over at Wake Up Walmart

More about the changes at Federated as the September transition to the Macy’s brand approaches. Here’s the rundown: Macy’s is the brand that people response to the most nationally, even if people in this article are negative about the loss of their regional department stores. Expect less promotions and increased private-label and exclusive offerings, as well as stores tailored to the region that they are in, so that Federated can maintain some of the things that people loved about all of the chains that they’ve swallowed up. Very informative article, though.

And lastly, two food-related quickies about two different chains who are being compared to Starbucks:

First is Dunkin Donuts, who are obviously competiting in the same space as Starbucks (in the sense that they both sell coffee). Boston.com has an article outlining the future growth plans of this chain. The plan calls for 15,000 U.S. locations in 2020, up from 5,000 today, and this will be done through a variety of store layouts and prototype as well as increased product offerings to drive afternoon business.

Is this all being done in an effort to compete with Starbucks? Not so much, it seems. As a loyal dunkin Donuts coffee drinker, I think that as much as these two brands concentrate around the same product (coffee), there is not too much overlap in their philosophy and themes, so I can see both of them co-existing pretty well in the world we live in. Seriously, though, whoever thought that there will be a day that we will live in a world with tens of thousands of locations of the same two stores?

The other eatery being compared to Starbucks doesn’t deal with coffee, but instead deals with ice cream.

USA Today has an article outlining the future growth of Cold Stone Creamery and the ice cream business in general. Two quotes that sum up this article really well are the following:

Cold Stone doesn’t just sell sundaes and sorbet, it sells sizzle. “It’s like Starbucks for kids,” says George Carey, president of Just Kid, a consulting firm.

and

An industry that once sold ice cream now is selling an ice cream experience.

Tonight I went to Friendly’s to get a large Reese’s Peanut Butter Cup sundae. I’m not concerned with the experience, I just want good ice cream. But with that said, it will be very hard for me to resist the new Cold Stone Creamery that they are building three minutes from my house.

That’s all I got tonight.

Did you find this post helpful? Then, you should also view these posts:

• Where’s the Petite Department? (0)
• Five ways you, as a customer, can improve customer service (2)
• Express Lane for August 6, 2008 (0)
• Retail roundup – Q1 results, JC Penney (0)
• NYC Chain Stores, By the Numbers (0)

First in maybe a weekly column? Hopefully.

Some quick retail notes for this lazy Sunday:

I hear that the new Abrecrombie & Fitch Back To School Preview floorset is this week. The seasonal transition at A&F is very impressive and seamless. Sales will be strong but it will be tough for A&F to compete with themselves and the high comps they had with BTS 2005 (June, July & August had comps of 38%, 22% & 24% in 2005). Look for solid increases in the gross margin with decreases in markdowns and sales for this upcoming season. This will be another great season for A&F.

Two quickies from the Loss Prevention blog: Cop kills man in grocery store shoplifting and Kroger manager jumps on hood of shoplifter’s car. I have nothing to say about the unfortunate shooting, but I’m sure Kroger’s corporate management doesn’t look fondly on employees jumping on cars to apprehend shoplifters. There has to be more to the story than that.

Last week, the Chicago Sun-Times ran an article showing where some of the former Sears executives have gone: Life After Sears.

And finally, a story from Starbucks showing how a good idea from worker, combined with the support of co-workers, the corporate office and customers can lead to a very positive outcome: Starbucks worker brews plan to get java to GIs in Afghanistan. A Starbucks employee from Maine organized a campaign where her co-workers donated their weekly bag of coffee they recieve as a benefit and, with corporate approval, solicited donations from customers. The result? 106 pounds of coffee sent to troops in Afghanistan. [via Starbucks Gossip]

Did you find this post helpful? Then, you should also view these posts:

• Retail roundup – Q1 results, Abercrombie & Fitch (0)
• Five ways you, as a customer, can improve customer service (2)
• Retail Roundup: Abercrombie, American Eagle, Kohl’s, Wal-Mart (0)
• Retail roundup – Q1 results, Target (0)
• July Retail Sales Disappoint Everyone (0)

Here is one thing I believe in: customer service is not one way street.

Customers, as well as businesses they deal with, have an obligation to better customer service. Customer service cannot go from bad to good if the company doesn�t know that they are providing bad customer service. On the same hand, customer service cannot continue to be good or great if the company doesn�t know that they are already providing that level of service. It is important for the customer to communicate with whoever they are able to in order to help build good customer service relationships.

I�d like to share with you five ways that you, as a customer, can improve customer service in the places that you shop. Although the scope of this post is geared towards retail, restaurants, and industries where customer interaction is one-on-one, the basic tenets that I will describe can be applied to almost all of our business relationships.

Most of these ways should seem simplistic and obvious, but that’s the point. Talking to friends and family, it doesn’t seem that a lot of people are doing these incredibly simple and easy things that they can be doing to help businesses improve customer service.

For a little back story as to why I wrote this, check out my other post: On poor customer service and me being a poor customer.

Continue reading this entry

Did you find this post helpful? Then, you should also view these posts:

• Retail roundup – Q1 results, Target (0)
• NYC Chain Stores, By the Numbers (0)
• Express Lane for August 6, 2008 (0)
• 6/4/06 Retail Notes (0)
• 6/11/06 Retail Notes (0)