McFresh from McDonald’s

Posted on July 13, 2013 by bermanevansretail
As we have reported before, the new McDonald’s McWrap is a very important addition to the fast food chain’s menu and its attempt to lure more young adults.
Now, the McWrap is the subject of a July 2013 Businessweek cover story by Susan Berfield: 
“It’s a reality of the fast-food business that what can be ordered in a few words, served up in seconds, and consumed in minutes is often the product of years of research and testing. Consider McDonald’s Premium McWrap, a 10-inch, white-flour tortilla wrapped around 3 ounces of chicken (grilled or “crispy”), lettuce, spring greens, sliced cucumbers, tomatoes, and cheddar jack cheese. On top is ranch, sweet chili, or creamy garlic dressing. You could easily make it at home without a recipe in about five minutes, varying it with whatever hasn’t rotted at the bottom of the veggie drawer. At McDonald’s, it took almost two years to perfect.”
“The McWrap is one of the most important additions to McDonald’s U.S. menu in years. It’s made to order. It has cucumbers, a new vegetable for McDonald’s. The McWrap is also a salvo in the Fresh Wars: a high-profile attempt to get the attention of customers who have turned to fresher, seemingly healthier offerings from competitors such as Five Guys, Chipotle, and Subway.”
Click the Businessweek cover image to read more.


 

Posted in Part 1: Overview/Planning, Part 4: Store Location Planning, Part 6: Merchandise Management and Pricing, Part 7: Communicating with the Customer, Part 8: Putting It All Together | Tagged , , , , , , , , , , , , , , , , | Leave a comment

Reshaping Retail the Ahold Way

Posted on July 12, 2013 by bermanevansretail
Ahold is a leading global food retailer. In Europe, it comprises Albert Heijn,  Etos, Gall & Gall, albert.nl, and Albert/Hypernova, and Bol.com. In the U.S., Ahold operates Giant Carlisle, Giant Landover, Stop & Shop, and the Peapod online business.
Recently, Klaus Behrenbeck of the McKinsey consulting firm interviewed Ahold CEO Dick Boer about the retailer’s revamped strategy. These are some highlights of the interview:
  • “The company has gone through a number of phases, and it would be wrong to highlight only our strategy over the past two years. I think the turning point for Ahold actually came in 2006. At the time, the company was a mixed bag — different brands, different structures, even different businesses, with food retail in Europe and food service in the United States. So the board asked us to do a full review of our business.”
  • “That review led to a clear statement, that our focus would be on food retail, and our focus would be on markets where we were — or could become — number one or two. We sold the wholesale division. We started moving toward continental strategies, with a clear delineation between Ahold USA and Ahold Europe.”
  • “Essentially, we laid the groundwork for regaining credibility among our stakeholders, both internal and external. But we also needed to show the market that we had a strategy for growth. We started working on our next phase, and that led to our current strategy: ‘reshaping retail.’
  • “We had a few things going for us, already, at that time. We’d decided to close down our hypermarkets and focus on supermarkets, convenience and smaller-store concepts, and the online channel — all mainly to help fulfill the daily needs of consumers. We felt that was our domain, what we were good at. We also had the benefit of a diverse and highly skilled team, both in the United States and Europe, that we’d built over the past few years.”
Click the Ahold logo to read more of the interview.

 

Posted in Global Retailing, Part 1: Overview/Planning, Part 2: Ownership, Strategy Mix, Online, Nontraditional, Part 3: Targeting Customers and Gathering Information, Part 4: Store Location Planning, Part 5: Managing a Retail Business, Part 6: Merchandise Management and Pricing, Part 7: Communicating with the Customer, Part 8: Putting It All Together | Tagged , , , , , , , , , , , , , , , , , , , | Leave a comment

Retail Rents on the Rise Again: The Example of Hong Kong

Posted on July 11, 2013 by bermanevansretail
We know that the cost to rent retail space can be high; and rent varies widely based on the desirability of the location. For instance, the annual rent for a 20,000-foot U.S. retail location in a less desirable area may be $40,000; the average annual rent for a 20,000-foot retail location in the United States is about $400,000; and the annual rent for a 20,000-foot retail location on Manhattan’s upscale Fifth Avenue may be as high as $40 million or more. Yes that’s right, $40 MILLION per year.
The cost to rent retail space is a concern to companies around the globe. The current rental rates in Hong Kong are a good example of this.
As Bettina Wassener and Mary Hui report for the New York Times: 
“Nam Kee Noodles is a typical Hong Kong restaurant: functional, popular, and busy. A dozen plastic-topped tables offer room for about 40 patrons. Customers line up outside at lunchtime, waiting to consume spicy noodle soup, dumplings, and iced soy milk amid the clatter of plastic bowls and chopsticks. In April, however, the little restaurant, in the heart of Causeway Bay, one of Hong Kong’s busiest shopping districts, nearly had to shut down after the landlord tripled the already-expensive rent.”
“We were paying around 200,000 dollars a month,” said Au Kei-hong, the shop’s manager, referring to an amount in Hong Kong dollars equivalent to about $25,800. “But the landlord then increased it to 600,000. It was too expensive. We cannot afford that.” After frantic negotiations, Mr. Au agreed to a smaller — though still steep — increase that has allowed him to stay put for an additional year. Causeway Bay, where Nam Kee Noodles is struggling to survive among high-end clothing and watch retailers, commands the most expensive retail rents in the world: an average of 1,950 Hong Kong dollars, or $251, per square foot per month [about $3,000 per square foot annually — roughly 50% more than NY’s Fifth Avenue rents!!], according to figures for the first quarter of 2013 from Cushman & Wakefield, a real-estate consulting firm.”
Click the image to read more.

Photo by Lam Yik Fei for the International Herald Tribune

 

 

Posted in Global Retailing, Part 1: Overview/Planning, Part 2: Ownership, Strategy Mix, Online, Nontraditional, Part 4: Store Location Planning, Part 5: Managing a Retail Business, Part 6: Merchandise Management and Pricing | Tagged , , , , , , , , | Leave a comment