deaverb

McDonald's Earnings Growth Could Surprise

Useful and crisp. Impressive to read a short well thought through article without fluff. A little info, especially reminding us about McD getting with the coffee (and tea!) business with iced beverages. As Drucker says, "Small line extensions often bring the largest most predictable rewards." McD continues to impress--sticking with their knitting--and doing it better. I admit--I like their coffee now. I like Starbucks too. But liking McD means less trips to Starbucks.

Publishing in Peril: Rivals Think About Collaborating

Long term decline abetted by liberal/leftie bias in news reporting, as well as online reading.

My experience is online sources of information tend to be more balanced, neutral, and don't put editorials on the front page where news belongs. Many friends of mine have been turned off by the NYT going from "the paper of record" to "Against George Bush."

Bush may be good or bad; but historically, the NYT stayed news not editorially oriented. I think this is causing many to back away from the various news "brands." Once left, rarely returned to these days with so many other options.

One more reason print is in triage.

Costco, Wal-Mart Lead a Consumer Revolution

You miss the dollar chains--the growth is even stronger there.

Carly, Out! Meg, Out! Now Diane Greene, Out!

Same for women as for men. As Peter Drucker says, "The charisma entrepreneur is overrated and often a danger." Many of the legends only became so AFTER they had built their companies brick by brick: Sam at Walmart; Ray at McDonalds; Joe Wilson at Xerox.

Hurd, at HP said famously, "At NCR we moved iron." Sales. Not charisma.

Paychex Looks Cheap

The first comment says it all. Paychex sticks to its niche and does it well. They are the low cost provider of payroll services, and specialize in companies with less than 12 employees. That's everyone these days. One starts/one stops; they keep on trucking.

They have always been underestimated.

Wal-Mart Gains As Economy Falters

Real story is international. 23% to 37% in
4 years suggests a trend toward 51% in
another 4. Then the anti-walmarters will
have even less clout. Walmart could follow
McDonalds formula worldwide. Awesome.

Big Lots, Wal-Mart and Costco: 3 Musketeers of the Pooring of America

As a supplier to Target, Best Buy, and other high end folks, as well as grocers like Kroger, drug chains such as Walgreen, and our core growth area--dollar, Dollar Tree (growing 700% faster in US than Wal-Mart, with more stores), Big Lots, DG, and 99 cent stores, we see things outside of the charts.

1. They buy great stuff. Our software/audiobooks sell for $1 to $1.99 in these outlets; same stuff at $4.99 or higher in the high end folks. Same for many others.

2. The Ames, Zayre, Kmart junk of old is gone. The value retailers only buy solid reliable products (of course an error occurs here and there, but my experience is Target and BBY has more of them).

3. Cost control. N 30; FOB; no returns; clean. That means people price to the penny.

4. Simple systems: emailed or faxed orders; scan goods on back of truck. No invoices allowed as a rule. No expensive EDI. Clean.

That's a formula for growth.

Year-Over-Year Jobless Growth Falls to Zero

As said before, temp help/business help is down because efficiency is up so much. At annual grocery show, all grocers reported a great 2nd Q (e.g., Kroger up 15%). Less trips; more efficiency in checkouts-reorders-spa... planning; buying more than basics. Ditto for McDonalds (not taking the extra stop at Starbucks), Dollar Tree, Dollar General, Big Lots. And they big guy, Wal-Mart.

Also consumer saving tons through Internet: pay bills on line; no envelopes, 42 stamps, late charges (pay minimum immediately; record clear on it), checks, trip to PO, etc. File taxes on line; pay tolls via EZ Pass; search on line.

Products: iPhone--4 in 1. Was going to Garmin for maps; whoops, iPhone has it; saved 3 garmins (less employment at BBY and Garmin, and the trip to BBY); no new laptops--use iPhone; no watch. Cheap at $20 extra per month.

Paper: gone paperless finally, by and large. 4 bags to recycle per week have become one every other week. PDFs other online things prevent need for all that.

Systems simplifying--simple email orders or faxes; no more expensive EDI. And on and on it goes.

Warp speed efficiency improvements. More to come. That's the story about employment, not to speak of angry salarymen who make employers shudder (hey, the angry salarymen may be right; but what employer needs it--so they make do).

What Was Left Out of the Jobs Report

The key factor in employment, I think, is the warp speed improvement in productivity and efficiency. At a recent grocery show, all grocers (e.g., Kroger profit up 15%) reported a great 2nd quarter--less trips; more purchases per trip; faster processing through register; easier replenishment. McDonald's reports same; ditto Dollar Tree, Big Lots, and other value retailers, including the elephant itself, Wal-Mart.

Then see the iPhone: 4 in 1. Was going to get a Garmin for car; iPhone had the same (whoops, there goes one purchase down the drain; actually 3 in the family). No more watch, use iPhone; no more Laptop on the road, use iPhone.

All of this is saving consumers a lot of money. Our customers and suppliers are both communicating more simply and cheaper--and therefore our transaction costs are down--which relates to less labor on all fronts.

This is the real story. Used to throw out 4 bags of paper every week; now recycle them; now only 1 bag every 2 weeks because the paperless society is upon us. Pay bills by mail; bye bye 42 cent stamps, envelopes, trip to PO, etc. and so on.

In simple terms, employers can do far more with far less people--and there is still a ton of fat out there.

Is the Great Moderation in Danger?

End of price controls. I remember when with price controls we started to get 48 ingots of aluminum for the same old price for 50. It was a simple solution for us, who needed the aluminum, and the supplier who needed the money at a fair price.

The loser? Society. This was not a "moral" issue; this was a pricing one. Turned everyone into a bazaar.

Not a zero sum game. Oil goes up; good things start to happen too: smaller cars on the road; less driving; less wear and tear on everything from cars, to streets, to people on the road, to pollution.

And finally a domestic solar business seems to have life.

Not all bad.

Wal-Mart Keeps Growing Globally

Mr. Perry, as usual, is clear and succinct, willing to comment on the obvious that is easy to overlook. Wal-Mart is taking a page from McDonald's book and becoming a worldwide force. At some point in Bentonville, they will figure out to "leave" America alone, avoid the hostility, and expand where people want them--China, South America, and so on and so on. And they may get really smart on do a Halliburton--move out of the country. Bejing would be smart, the center of all of it for them--new customers/suppliers (such as ours).
We are "too cheap" for the US Wal-Mart stores; China stores welcome us as being "too cheap" for the US. So they have balance too--know what price points work, where. An awesome achievement!

Wall Street Breakfast: Must-Know News

Interesting about solar in particular.

Dollar Tree et al: Four Retailers

Dollar Tree is growing much faster than Wal-Mart in US. They have a strategy of getting the closest outparcel (Wal-Mart lease prohibit dollar stores near them, where this is legal) to a Walmart. The message: shop at Dollar Tree first; if you can't get it there, go to Wal-Mart. Don't count out 99 or FDO or Dollar General (not mentioned) or Freds. All top class outfits; very nose to the grindstone, working at it 24/7.

Waiting for the Rise of the Phoenix

Excellent.

Costco: The Enigma

Costco is solid because it has a clear mission: suppliers (we sell software at $1 to $2 by and large, up to $9.99 at high end outlets; therefore, Costco doesn't offer enough value discounting these kinds of items so leaves them to the Target, grocery, drug, and dollar chains); consumers (they know the deal); employees (not a complicated store for people to navigate).

They are both "high" end (great values in bulk and big ticket items) and "low" end (great value on cereals, food, essentials). And, of course, most consumers buy some "high" end and some "low" end at the same time or different occasions.


Continually impressive on all fronts. Awesome performance.