Category Archives: Chain Store News

McDonald’s Debuts New Chicago HQ

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McDonald’s has called a Chicago suburb home for 40 years. No more: The company recently moved its HQ into the city – in The West Loop location once home to Oprah Winfrey’s Harpo Studios. CNBC said the area is “an up-and-coming neighborhood known for its trendy restaurants. It is here that Easterbrook foresees the company cultivating top talent and tapping into emerging food crazes.”

Craig’s Chicago Business reported that the company is leasing about 80% of the 600,000 sq ft (27,871 sq m) available in the newly-built, block-square building in what’s called the Fulton Market area of the city center. The $250 million (£187m) headquarters was officially opened on June 4.

In addition to office space, the facility also includes a floor dedicated to the company’s Hamburger University, a training ground for mid-managers, higher-ups and franchise owners in the company. More than 80,000 of them have graduated from HU, as the ‘campus’ is called.  (In Oakbrook, IL, the company’s former headquarters, HU occupied 130,000 sq ft (12,077 sq m). It occupies the entire 2nd floor in the new nine-story HQ building, which stands some 125 ft (38m) at its highest point.)

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Steve Easterbrook, CEO of McDonald’s, told CNBC that while the old HQ had “been a wonderful facility for us, it was a little detached from everyday life.” The new HQ definitely isn’t.

Its ground floor includes a restaurant open to the public. It shows off all the latest innovations in McDonald’s around the world, including menu selections (which often differ significantly in other countries from US offerings).

Truly, this is a photo story, so here are a few more from McDonald’s of their new HQ.

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Meet-up spaces

 

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The employee cafeteria, with stadium seating.
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“Work  neighborhoods”

 

 

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Roof-top work space, with views over Chicago.
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Walmart, Amazon Go Head-to-Head on Delivery Services

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Walmart has been working hard, in recent months, to outpace and outdo Amazon as much as the latter has been disrupting many competitors in moving products  — including edible ones – to consumer’ doorsteps.

More and more, Walmart commercials and print ads tout its ‘no membership’ plan for no- or low-cost delivery service to consumers’ doors. The company also is growing its car-side delivery service – where a phoned- or emailed-in order is ready to be picked up at a designated store-side place. A  phone call from one’s car at that place to the store’s delivery department gets the order heading out the door.

Somewhat surprisingly, the delivery folks reportedly don’t mind performing their duties even in ‘off’ weather, according to a couple of them at a Lynchburg VA Walmart. Perhaps they are, justifiably, incentivized by tips.

Both of those services work remarkably well. The to-your-door service works better, perhaps, than Walmart imagined. But then, this is a smart company, and it may have realized a clever opportunity for customers living closest to Neighborhood Markets, the company’s scaled-down store model focused on food and little else: With the company’s entire product catalog available, much beyond what the Neighborhood Markets offer can be home-delivered, at no cost to the consumer. How? By delivering from the nearest full-service Walmart!

That is speculation on our part, but conceptually, it makes sense as a solution to a potentially serious challenge to Walmart.

This program also enables stores to cut inventory (in, say, pet supplies) and still offer a ‘full range’ of, products via the delivery option. In practice, this means that, for example, my local Walmart has been able – possibly coincidentally, possibly because of delivery issues – to leave shelves without some popular cat litters while still offering them through home delivery.

On another front – new patents – Walmart scored some seriously interesting ones recently. And Now U Know, the produce industry newsletter, reported on May 31 that recently approved patents included one for a navigation device for shopping cards, a wearable, tracking device designed to improve    employee productivity (think shelf stockers). And instore inventory trackers that can track when stock needs to be reordered – or shelves need to be restocked. A bit more esoteric is a patent that could  provide instore drone assistance for price verification and in-store navigation.

One or several of these concepts could be implemented in a store near you in the foreseeable future.

Meanwhile, Amazon is boosting membership fees for Prime service – which most users value most for its free delivery feature. The company also recently expanded Prime to Whole Foods customers in select areas. More recently still, according to International Business Times, the company expanded Prime offerings to twelve states beyond the original test area around Ft. Lauderdale FL. A company news release said the expansion affects 121 Whole Foods stores in Colorado, Idaho, Arkansas, Louisiana, northern Nevada, northern California, Texas, Utah, and Kansas – as well as the Missouri side of Kansas City.

The company says Prime discounts also are now in place at Whole Foods’ Market 365 stores around the country. That Whole Foods sub-brand was launched in 2015, IBT noted.

 

Lidl Alters Stock, Prices In Danville VA Store

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The Lidl store in Danville, Virginia has been open a couple of months. It’s already made some (much needed) shifts in its product offerings. And, though staff on hand on a recent Wednesday afternoon reported business has been “good,” it was pretty slow on our second visit.

That, for the company, is the bad news. The good news is how ably they work with consumers wanting to return something – often a hassle ao competitors’ stores. On our first visit, we’d bought a device to catch and kill houseflies. It didn’t work. Despite the fact it was many weeks before we could get back to the store (it’s nearly an hour’s drive away), the return process – done at the checkout, not a consumer service counter – went smoothly… once a manager was located: That took a couple of minutes.

A bit later, at the conclusion of the same visit, we realized that a bottle of wine we’d purchased was not the one we wanted – a less than one-third the price of the one we walked out with. I immediately walked it back into the store, spotted the same manager on the floor, and he OK’d a return even though, he said, Virginia law bans the return of wine. (Since we’d only bought it moments before, and had the receipt, he reckoned the law could be ‘waived’ (read ‘overlooked’.) We returned to one of the checkouts – only three were open on this slow afternoon – and were promptly issued a store ‘gift’ card.

Back in the chilled foods section along the right wall, it was clear that someone has paid attention to the fact that people on Virginia’s Southside don’t have much interest in Indian food, as the choices in the heat-and-serve section have been trimmed (to one!) and other, similar meals have been culled, as well.

The bakery’s offerings are more numerous, and samples are more in evidence – with a lighted sign rotating through the day’s offerings.

But one of the greatest changes – hardly unexpected for a new, price-oriented store – has been the push to drop prices – an effort evident in most every department. One dramatic example: whole “young” chickens were offered at $.69 (69 cents) per pound, down from $.99 – the price of comparable birds at Food Lion, along with Walmart, a chief competitor in Danville.

(The town – a small city, actually – used to have two Piggly Wigglys and a Harris Teeter. One of the former was replaced by a Walmart; The latter simply pulled out of the market. There’s one Save-A-Lot, a limited assortment discount store. It’s so NEVER busy, you wonder why it’s still in business.)

Lidl needs to do, in this and other locations, product shifts to reflect the fact locals aren’t interested in “Cheese [or anything else] from Europe”. Most of their new US stores are in small, often rural, unsophisticated communities. The natives there don’t know (or care) about brie or other ‘specialty’ cheeses, or foods from foreign lands. But they do go for Lidls’ bakery goods, many of which – such as fresh bagels, croissants and similar pastries – are all but unknown beyond the products offered in the bake-it-yourself section of the dairy aisle.

Some reports have said Lidl isn’t doing the business it expected to in its launch stores. But as someone pointed out, the privately (German-) owned company has deep pockets, and is committed to a long term success in the US. There is every reason to put faith in that – and the fact that both Lidl and Aldi, it’s German-based cousin, which also is growing its US store count, will continue to disrupt the US grocery-selling scene for years to come.

McDonald’s To Test Delivering Via UberEats

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McDonald’s is planning to test deliveries via UberEats in three Florida markets starting in late January, The Chicago Tribune reported a few days ago.

Though a person close to plan said the deal linking McDonald’s and UberEats hadn’t been signed asa of last week, The Trib said McDolnald’s has said that it is intended to include some 200 restaurants in the Orlando, Tampa, and Miami markets.  The paper said UberEats lets customers order online or through its app, anda an Uber “Courier” deliveries the food.

In the case of McDonald’s – which already delivers through such third-party companies as DoorDash and Postmates – the Uber fee is said to be set at $5, lower than the delivery and service fees of the other delivery service McDonald’s is using.

McDonald’s also is planning to roll out a mobile order and pay service next  year, and it is spending considerable sums upgrading its restaurants and introducing kiosk ordering systems and bluetooth-enabled table service.

The Trib article noted that the world’s largest burger chain presently does two-thirds of its business via drive-thrus, and several tweeks have been introduced to them to speed up service to drivers.mcdonalds_sign

Food prices down? Fine, for now; But they’re market-driven, and winter’s coming

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Supermarkets across the U.S. continue reacting to deflationary market pressures by lowering prices on both commodities and packaged goods. Sometimes one chain or another – think of Walmart – doesn’t do reductions and price fluctuations as smoothly as they could, though.

Walmart, like a lot of major food retailers – it is, after all, America’s largest supermarket company – has been promoting store-wide ‘permanent’ roll-backs in prices for most or all of 2016. What they haven’t been talking about, with good reason, is the fact that the kinds and levels of price changes they institute will hardly negatively affect the company’s bottom line.

Example: Way earlier this year, a 20-oz. (567 g) loaf of their Great Value white bread could be had for $.88. Then, a couple of months later, the price was quietly upped to $.99. It’s since been upped again, to a bit more than one dollar.

(At one point in the late spring, the company seemed to have actually killed that bread brand, as shelves were devoid of it for a couple of weeks or more where I shop, in Central Virginia. But that could have been just another far-too-typical out-of-stock situation – a problem Walmart seemed to be struggling with a lot until recently, when they’ve actually brought back a few brands first appearing to be out-of-stock then totally disappearing.)

Example II: Generic large egg prices fell to an amazing $.88 a dozen in the early summer – in part due to an oversupply situation in the industry. That price held, at ‘my’ Walmart, for close to a month. Then, in an amazingly stupid more, the price was pushed up to $.99 behind promotional signs touting a ‘new low price’! Yep, they still were cheaper than the dollar-plus per dozen price at Food Lion, the only other chain retailer readily available to me. But how dumb do you think your customers are when you tout a higher price as a new ‘low’ one?

(Meanwhile, as consumer demand for ‘cage free’ eggs and chicken has grown, prices at that end of the hen fruit market have moved, and stayed, higher. But As this blog reported on Oct. 21, ‘Cage Free is Far From Trouble Free’, and this is an issue the chicken and egg industry is going to have to deal with.)

Rochester NY-based Wegmans announced a few days ago that it is cutting a bunch of prices across the store, with produce being among the most-positively-affected sections. Other supermarketers across the country have done the same or similar in recent months.

But consumers need to keep one thing in mind: In the 1980’s, a supermarket company named Grand Union – a venerable company with a colorful past – it was probably the first, and one of the few, supermarket operators to employ customer helpers who traversed a then-considered-huge 100,000 sq ft store in central New York state on roller skates – made a series of serious mistakes. One of them, the first or second in a sad series, was to declare that a round of price reductions it was introducing were ‘forever’. If you’re a believer, you may argue that God knows ‘forever’; whether you’re a believer or not, the smallest bit of common sense dictates that no supermarket company can afford to make promises like that.

Long story shortened: A year or so after one of its executives suffered what clearly appeared to be a ‘mob hit’ – his body was never found – this New Jersey-based company went bankrupt.

The ‘forever’ issue was only a symptom, as it turned out: The real cause of the company’s come-down/put-down was a succession of management companies’ desire to fatten their purses at the expense of the golden swan – the layer of the golden eggs.

As a shopper, you can count one thing, and only one thing, where supermarket prices are concerned: They are, and will continue to be, market-driven, both up and down.

While some of your best buys will always be found in your favorite store’s weekly flyer, the very best ones will always be found in your meat department, where items too close to a sell-buy date are marked down – sometimes way down.

But a word of caution: If you seek out that kind of savings, pay close attention to the ‘use or freeze by’ dates. While they are generally generous, in terms of absolute safety, don’t push your luck: Use, or freeze. (Or cook and freeze; The benefit is the roughly the same.)

Organics Now Close to 11% of All U.S.-sold Produce

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You needn’t have been paying a lot of attention to notice, over the past few years, more and more of the offerings in food store produce sections are organic products. Everything from apples to strawberries is increasingly being raised in ways not depending on pesticides, or artificial fertilizers, or other means at odds with nature’s own way of producing things from the ground, trees, and bushes.

Among the latest growers to announce a big organics push is potato and onion provider Potandon Produce, based in Idaho Falls ID. The company this week announced it is now offering organically grown red and yellow potatoes from fields in North Dakota.

Ralph Schwartz, the company’s vice president of sales, said that these are the first organic potatoes to be grown commercially in North Dakota, and plans already are underway to increase acreage next year in anticipation of growing consumer demand.

Fresh produce has always been and will continue to be the gateway for organics,” he said in a company release. “We’ve watched as organic products, especially produce items, have shifted from being a lifestyle choice for a small share of consumers to [being] mainstream for a majority of Americans.”

Pharmacy Chain Accused of Saying Elders ‘Like To Steal’

Most retailers take steps to encourage people to shop their stores and seek to get those who do so to remain customers. The CVS pharmacy has been accused of turning those concepts on their heads: Several discrimination suits filed against the chain in New York City on Oct. 31 accuse the retailer of advising staff, in a ‘loss prevention’ handbook, that older people ‘like’ to shoplift and of failing to discourage employee actions intended to embarrass departing older visitors, creating the impression that they may be hiding and stealing items.

The New York Post reported that the employee handbook warns employees that senior citizens on a “fixed income” present a “special shoplifting concern.”

The paper said that attorneys from the Manhattan law firm Wigdor LLP brought the suits on behalf of former employees arguing that the policy is “tantamount to an admission of discrimination against older customers.”

Lawyers Michael Willemin and David Gottlieb noted that they have testimony from 16 whistleblower ex-staffers who claim that CVS stores across the city discriminate by profiling elderly shoppers as well as blacks and Hispanics.

One of the cases was initiated by Anson Alfonso, a former “market investigator” for CVS, where he was part of a team of undercover employees who helped track and bust shoplifters.

Alfonso, 27, worked as a store detective from January 2013 to October 2014. He told The Post that store managers, supervisors and even stock personnel would frequently swipe security tags past checkpoints to set off an alarm when an elderly person was leaving a CVS store. The intent was to intimidate them and imply, with no evidence whatsoever, that the older person was shoplifting.

“They would say, ‘I didn’t see it but I know that old person was stealing,’ ” Alfonso said.

The paper noted the shoplifting-among-the-AARP-set theory mirrors a 1998 “Seinfeld” episode titled “The Bookstore,” in which Jerry catches his Uncle Leo stealing a book from Brentano’s. When Jerry confronts him, Leo protests that the petty theft is his right as a senior citizen.

“It’s not stealing if it’s something you need,” Jerry’s dad, Morty, says, with his mom, Helen, noting, “Nobody pays for everything.”

A shocked Jerry shouts, “You’re stealing, too?!” and Morty explains, “Nothing. Batteries. Well, they wear out so quick.”

But attorney David Gottlieb says there’s nothing funny about the pharmacy chain harassing innocent seniors and other groups protected under the law.

“It is reprehensible that CVS targets customers based on race, ethnicity and even age, and we intend to hold the company accountable for these practices,” he said.

The new filings come a year after Gottlieb’s firm sued CVS in a federal class action, alleging store managers ordered security guards to focus on minorities.

A CVS spokeswoman said, “We are not aware of these new cases, so we are unable to comment specifically. However, in previous cases brought by the same law firm on similar complaints, plaintiffs’ attorneys have not been able to produce any documentary evidence to support their allegations.”