Government Run Amok!
First, I admit, I believe local, state, and federal governments
should be smaller and should quit trying to dictate how
businesses are run. Unfortunately, they can't seem to stop
themselves. They continue to dream up laws and ordinances that
do exactly that--tell people how to run their businesses. The
spate of new laws and ordinances of late have gotten out of hand.
This business of mandating what people consume probably started
a few years back with the smoking bans passed around the
country. The lawmakers haven't stopped with tobacco. In
2006, the city of New York was the first in the nation to ban
the use of trans-fats in restaurants. Those evil little
trans-fats are what make some foods actually taste good.
Apparently they're really bad for you, so now the California
legislature has jumped on the bandwagon and issued forth the
same decree.
This is the California legislature that has been deadlocked for
several weeks over adopting a new budget. This is the same
legislature that spends billions of dollars more than it takes
in year after year. If you were to run your business like this
state legislature runs California, you would be belly up in a
flash. In the middle of this budget morass, the legislature
stops everything to ban trans-fats. Why exactly does banning
trans-fats trump passing a budget? Who determines priorities
here?
The latest offensive by city and state governments targets
plastic bags. Earlier this year, San Francisco outlawed the use
of plastic bags. Now several other cities are considering such a
measure. Yes, I know it's California, but we're not alone. The
Seattle City Council recently voted to make supermarkets, drug
stores, and convenience stores charge customers 20 cents for
every plastic bag they use.
Not to be outdone, the San Francisco city council passed a law
prohibiting drug stores from selling cigarettes (not grocery
stores, convenience stores, or gas stations, just drug stores).
They are going to protect the citizenry of San Francisco whether
they like it or not!
Last week, in one more moment of such madness, the city council
of Los Angeles put a one year moratorium on fast food outlets in
the southern area of the city. Why the southern area of the
city, you ask? Because that's where mostly low income people
live, and it has too many fast food outlets and not enough
places selling healthy food. Will banning trans-fats,
cigarettes, and limiting the number of fast food restaurants
cause people to lead healthier lifestyles?
Granted plastic bags have proven to be a scourge on the
environment, and solutions to environmental issues must be
found. But local and state governments increasingly infringe on
how retailers do business. What's next? Any time politicians
decide it's their job to determine what's best for retailers, I
get riled. The more they get away with doing these kinds of
things, the more they want to do.
It's time to take a stand. If anti-business legislation is being
considered by your city council or state legislature, make
yourself be heard. Let the politicians know they have to answer
to the business community not just special interest groups.
Best Buy Gets into the Musical Instrument Business!
For general merchandise retailers such as big discounters,
warehouse clubs, and department stores, nearly any category of
merchandise can be a good vehicle for increasing business. But
what about specialty retailers? Recently consumer electronics
retailer Best Buy announced the opening of musical
instrument departments in a number of its stores. Having spent
a portion of my retail career in the musical instrument business and as
a close observer of the industry, I believe this could be a
big mistake.
Selling musical instruments has always been a tough business.
Today it's even tougher for several reasons. Although some
children certainly enjoy learning to play an instrument, video
games, computers, and other technology related activities more
often capture the interest of kids. And for those who do want to
learn, the lack of musical education funding in schools means
children aren't exposed to musical instruments in the course of
their education. The influence and exposure must come from
outside the school environment. With fewer young people learning
to play, we see fewer adults playing as well.
Lastly, two kinds of stores dominate the musical instrument
business today. First, small neighborhood stores serve the
musical instrument needs of amateur and professional musicians
in their communities. Second, the Guitar Center, the largest
musical instrument retailer in the world, operates 210
Guitar Center Stores across the country, 95 Music & Arts stores
that rent and sell band and orchestra instruments, and
Musician's Friend, a highly successful web site.
How tough is the musical instrument business? Just ask Mark
Begelman, the guy who founded Office Depot. In 1997, Begelman
opened his first Mars Music in Florida. Over the next few years,
with more than adequate financial resources, he opened several
more Mars stores across the country. The stores were large,
great looking, and fully stocked with all the best musical
instrument brands. The company lasted five years and eventually
liquidated.
No doubt, Best Buy is very good retailer and has enjoyed a great
deal of success in recent years. But I have real doubts whether
Best Buy can successfully sell musical instruments. For the most
part, the wants, needs, and purchasing expectations of musical
instrument customers differ greatly from those of consumer
electronics buyers. I guess we'll just have to wait and see.
THE HIGH RENT DISTRICT!
Even though many countries, including
the U.S, are experiencing challenging economic times right now,
rents in the world's priciest neighborhoods continue to rise.
According to the international real estate firm of Cushman &
Wakefield, retailers on New York's Fifth Avenue between 42nd and
59th can expect to pay approximately $1,500 per square foot per
year. To put this amount in perspective, a retailer with a
20,000-square-foot store makes annual rent payments in the
neighborhood of $30 million a year.
WHAT SLOWDOWN?
Over the last several months, a growing number of
national chains have announced the scaling back of new stores
openings because of the economic slowdown. I guess the folks at
Target didn't get that message. In late July, Target opened 43
new stores in locations all across the country. Nine new stores
opened in California, six in Texas, five in Florida, three in
Virginia, and the rest spread throughout several other states.
A REALLY BIG CUSTOMER!
Several months ago Gibson Vedamani, the
CEO of the Retail Association of India, put me on his newsletter
mailing list. I don't know much about retailing in India, but I
always enjoy reading his newsletter. Here's a piece from the
most recent issue.
"Customer footfalls do make a difference to any retail business.
A cloth store in Varanasi in India has a different kind of
footfall. The store is visited by a cow, which unfailingly takes
it's place right in the center of the store every day. The store
owner believes it is a Holy Cow and that God visits his store
every day. The cow has aroused a good deal of curiosity and it
generates customer footfalls too!"
A REALLY COOL SHOPPING CENTER!
Whampoa Garden, a large housing
development in Hong Kong, boasts 88 high-rise buildings; dozens
of restaurants, schools, and shops; and one of the world's most
architecturally creative shopping centers. Since the area was
once home to the Whampoa Dockyards, someone decided that
building the shopping center to look like a ship would be a good
idea. I agree. Here are two photos of the shopping center/ship, one taken
in the daylight and the other in the evening (click to enlarge).
Until next month...
A TIMELY NEW KEYNOTE FROM RETAIL EXPERT GEORGE WHALIN
Over the last year we've seen dramatic changes in consumer
sentiment, shopping habits, and overall economic confidence. In
its latest survey, the Conference Board reports that consumer
confidence in June is at its lowest level since 1992. Retailers
must adapt and shift their thinking in order to deal with this
new reality.
This timely new keynote will help retailers better position
their stores, fine-tune their operations, and respond to a
changing retail world. The ideas, insights, strategies, and tips
George shares in this valuable presentation provide real-world
solutions to the challenges retailers face every day!
This is an opportunity for retail associations, trade shows,
franchise companies, manufacturers, and industry suppliers to
help retailers survive and thrive in this challenging economy.
Call 800-766-1908 today to check date availability.
Seminars and Training Programs for Managers and Associates
Delivering performance-enhancing speeches and seminars for retailers
since 1987, George jam-packs his presentations with practical,
real-world information. His seminars for managers and associates
teach store management skills, customer service improvement, and
sales techniques. If you want to improve store productivity and
profitability, we encourage you to call George Whalin. Don't
wait, his calendar fills up quickly.
Topics for managers' meetings and corporate conferences:
(Click on a topic for details)
Great Store Managers Make Great Stores!
How to Find an Eagle in a Flock of Turkeys! Finding, Hiring, and Keeping the BEST Retail Employees
Customer Focused Selling
Every Customer Every Day!
For more information go to our web site or call 800-766-1908.
Speeches and Seminars for Retailers
As one of the nation's best-known and most popular retail
speakers, George's speaking schedule includes events for
retailers and consumer products manufacturers all across the
country. He's added some exciting new convention and trade show
topics. If you are a meeting planner or are involved with
speaker selection and would like to book George for your next
convention, we encourage you to call as early as possible.
George's calendar fills up quickly.
Topics for conventions and trade shows:
(Click on a topic for details)
NEW! Strategies for a Changing Retail World
Into the Future! Powerful Trends Shaping the Future of Retailing
Retail Success! Increase Sales, Maximize Profits, and Wow Your Customers in the Most Competitive Marketplace in History
Stop, Look, Touch, and Buy: The Dynamics of Merchandising
12 Powerful Advertising Secrets Every Retailer Should Know
Power, Punch & Pizzazz! Create Advertising that Grabs Customer Attention and Sells More Merchandise
Customer-Direct Marketing: Increase Retail Sales with High-Impact Direct Mail & E-Mail
Double Your Sales and Triple Your Profits with High-Impact Marketing and Promotions!
Competition? What Competition! Standing Out in Today's Competitive Retail Marketplace
How to Find an Eagle in a Flock of Turkeys! Finding, Hiring, and Keeping the BEST Retail Employees
Every Customer Every Day!
For more information go to our web site or call 800-766-1908.
Resources for Retailers
George Whalin's book RETAIL SUCCESS! is now in its ninth
printing. A number of consumer products manufacturers have purchased the book
for their retailer customers. Retailers have provided copies for their
managers who regularly refer to portions of the book in their
managers' meetings. And managers are referring to the book in their
daily store meetings. If you haven't purchased a copy yet, what
are you waiting for? For multiple copies, call us
for volume pricing. For individual copies, there are also some very good deals to be
had at amazon.
Go to our
web site
today where you'll find several other books in addition to
RETAIL SUCCESS that George recommends. Check it out often, he keeps adding to the list.
If you have an opinion or thoughts about any of the topics
posted, I invite you to comment at retailerblog.com It's easy to
do. And if you have a topic you would like to see addressed on the blog, send me an e-mail at george@whalinonretail.com.
In addition to speeches and seminars, George also consults
with retailers helping them improve the operation of their
businesses. His consulting services include helping retailers
with strategic planning issues, marketplace positioning,
merchandising and store layouts, developing results-driven
marketing and advertising programs, personnel management, and
improving store performance. If you need solid, practical,
proven insights and ideas to grow and improve your business,
call us toll-free at (800) 766-1908.
We encourage you to pass this publication along to
your associates and colleagues. If all or any portion of this
newsletter is reproduced in another publication, attribution
should read as follows: Copyright 2008. Reprinted with
permission from George Whalin's Retail Management E-Letter. To occasionally reprint portions of this newsletter one time, no
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please contact us at 800-766-1908 or info@whalinonretail.com.
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