If you have a good product you want to sell it where people can see it. Nearly everyone has access to Amazon. However most have forgotten about Sears and have assumed their stores are all closed. The ones still open look like an attic of random products tossed about. Not very inviting. The last place Sears should consider selling products is in their own stores.
Price, quality, service, experience and signature private labels are driving shoppers to smaller stores. Most large supermarkets can't compete in this area. Especially the traditional publicly-held, plain vanilla conventional supermarkets. They have a huge center-store that is boring and unhealthy. There will always be a handful of very well-run large grocers like H-E-B, Publix, Hy-Vee, WinCo, Woodmans and Wegmans. Those kinds of grocers have more flexibility to hire good people and experiment with new trends because they are employee- or privately-owned, have stayed out of debt and have long-term objectives.I think in the next five years we will see huge bankruptcies, stores closings and mergers with some of the largest and most boring supermarket chains. There is not much the plain vanilla retailers can do. Throwing mud at the wall with loyalty cards, gas programs, coupons, mobile apps and copycat online shopping will be futile and they will fall further behind. It's very easy to see who the next A&P dinosaur to go extinct will be.
Saw the same thing happen in Oklahoma City and Atlanta during the Obama years. If there is a crackdown, the undocumented won't drive. Taxis aren't cheap. A quite a few Hispanic stores went dark. Another opportunity for Amazon. Smart Hispanic retailers will make out well with home delivery.
Good workers are paid well. Period. If they are not, they find someplace who will pay them well. Retail workers are like baseball players. You have major leaguers who are paid well and you have minor leaguers who take what they can get. Retail is a rough game and often a cruel one. Most workers are disposable and replaceable. Those who are of value will be paid well.
No, I don't think grocers have figured out how to make online work. It's becoming such a distraction they are ignoring their brick-and-mortar business. Sensationalized headlines are creating overreactions. Will Amazon acquire Whole Foods or did they just make that announcement for shock value to see the reactions? Time will tell but it reminds me of wolf packs coming down and distracting a herd of buffalo, disrupting their routine and causing them to make mistakes.
Usually the first thing private equity does is take on massive amounts of debt and pay investors back. The strength to capitalize on is the line of credit. Then make drastic cuts in labor while at the same time raising prices. If there is any real estate owned, sell it and lease it back. Cut expenses to the bone. Make sure lots of press releases are sent out saying how there are big plans to improve the business. Milk as much of the cash flow as possible and pay dividends to the investors.
This is just a novelty and experiment for Grand Rapids. These types of stores only work in densely, vertically populated urban areas. Grand Rapids does not fit this mold so this is nothing more than a good deed gesture. I doubt they believe they will make money. I've seen Meijer expand rapidly in the past few years only to see low-volume stores waiting for competitors to close. When Kroger bought Roundy's that took a lot of hope away from Meijer. Lucky for Meijer they are debt-free and don't have to answer to Wall Street.
The larger the chain the more difficult it is to find quality people to be involved. Ever since the Amazon-Whole Foods acquisition was announced, new messages of hope have been invented. Look for other large chains to get their PR departments working overtime to create happy messages of hope.
People shop Whole Foods for the experience. But lately they have overbuilt, panicked when sales did not increase like in the past, and then tried the failed 365 concept. Amazon won't be able to expand the experience but they will be able bring the products to the rest of the country. Whole Foods is generally in large metro areas, very high income areas, near a major university or medical center complex. These are not "B" locations but rather prime real estate. Where else would you want to be? Whole Foods brings with a lot of retail and real estate expertise. Still, look for a lot of layoffs of redundant employees.
Now they don't have to spend money getting to the store to buy groceries, if they are lucky enough to have supermarket nearby and have access to transportation. Food Stamps users will be money ahead. Our local food pantry and Meals on Wheels already is delivering food. Amazon will just be another delivery for them.
Fitness centers absolutely benefit a mall. With an aging population, early retirees and a focus on health, the fitness center is the new workplace. Instead of going to work, many spend their day at a high-end fitness center exercising, taking classes, lounging at the pool and having lunch. With complementary daycare, Wi-Fi and exercise workstations for laptops, I'm seeing more people turning the fitness center into an office. Some of these facilities have thousands of members. In my opinion you want to have a club that caters to higher-income people. Avoid the $10 a month-type clubs with minimal features.
New warm bodies in management need to do something to justify their hiring. Throwing mud at the wall to see what sticks. This is small change compared to trying to open stores in Canada. A "minority investment" of $75 million is small change but makes for a good press release. I would expect Target to continue to make similar small and safe investments like this. Although its not something that will take Target to the next level, it will keep the investment analysts busy with something to write about.