Beltway Plaza: The Future of Malls?

The Washington Post: “At Beltway Plaza, Spanish rings out from every aisle and the food court is populated by not Taco Bells, but various immigrant cuisines … Mostly, Beltway Plaza has found a niche as a large — and faintly 1980s — urban souk, hawking the necessities, and the oddities, of immigrant life … In a retail landscape that is increasingly bleak, could this be this the future of malls? … It’s the quintessential American mall, once flush with people, now scraping along as national retailers shudder.”

“Local real estate magnate Sidney J. Brown opened Beltway Plaza as an open-air discount mall in 1963 in Greenbelt, one of only three garden-filled towns in America developed for low-income families in the late 1930s under the New Deal … Greenbelt, envisioned as city filled with smartly manicured greenscape, eventually came to look more like a thicket of concrete and strip malls. But the mall, with its awfully affordable S. Klein Department store, a two-screen movie theater and a pizza parlor, was a hit.”

“At Jo-Ann Fabric, the sewing aisle, a beacon of immigrant industriousness, was humming … We trek to Import Cottage, where you can purchase brazen replica Louis Vuitton suitcases, large laundry bags emblazoned with ‘Charm of Africa’ and untarnished Indian costume jewelry … A stroll across the mall’s dated white-tiled corridors takes you past a cookie place that is not Mrs. Fields and a restaurant that is not Panda Express but Jodeem African Cuisine, offering the Ni­ger­ian specialties ogbono soup and fufu. There’s an El Taco Rico, about as large as a broom closet and just as dark.”

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Times Square: Crossroads of Experiential Retail?

The Wall Street Journal: “Times Square’s flashy retail scene is known for its hordes of tourists drawn to Broadway shows, mass-market shopping options and kitsch. But asking rents have been coming down this year as more shopping moves online. That has prompted landlords to seek out more ‘experiential retail,’ such as food and entertainment venues, and more interactive elements in stores.”

“At 20 Times Square, a hotel and retail project at Seventh Avenue and West 47th Street developed by Witkoff and its partners, customers will be greeted by a 40,000-square-foot interactive football exhibit and theater from a venture comprising the National Football League, the NFL Players Association and Cirque du Soleil. Kushner, meanwhile, has signed leases at its retail condominium at a former New York Times building on West 43rd Street to bring an 11,970-square-foot food hall curated by chef Todd English; a 60,000-square-foot interactive exhibit from National Geographic called ENCOUNTER: Ocean Odyssey; and a 49,000-square-foot miniature world called Gulliver’s Gate.”

“Operators of these experiential businesses tend to generate more sales than conventional retailers do … Landlords are seeking a specific mix of tenants to cultivate their properties as destinations not just for tourists. Growing numbers of office workers and residents populating areas near Times Square are seeking out food, cosmetics and affordable fashion.”

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Nestlé & The Scientific ‘Garden of Eden’

Quartz: “This is where Peter Brabeck-Letmathe, the outgoing chairman of the world’s large food company, has staked his flag, casting Nestlé—with its $88.8 billion in annual revenue—not as the purveyor of natural foods or conveniently-available snacks, but as the vessel to deliver a new, scientifically engineered Garden of Eden … Brabeck-Letmathe has forged into new territory, carving out a ‘nutrition, health, and wellness’ industry.”

“In Brabeck-Latmathe’s future, people will undergo health testing during varying stages of life to learn more about the genetic material of the microbes—the bacteria, fungi, protozoa, and viruses—living inside their bodies. Each time, the tests would analyze genetics, caloric levels, predisposed illnesses, and more. Such information would allow Nestlé to create products that essentially act as medicine to alleviate known health issues … Nestlé isn’t looking to enter the prescription drug business, but through these partnerships and acquisitions it plans to apply its new scientific knowledge to food products—something that could one day include a frozen pizza that’s healthy and prevents Alzheimer’s disease.”

“As the company incorporates its know-how into hardware, it will further develop its food products, sweeping out more sugars, salts and preservatives, replacing them with micronutrients and potentially with phytonutrients—plant-derived compounds hypothesized to be responsible for much of the disease prevention provided by plants. In theory, if a watch or implant tells you that you need more magnesium in your diet, consumers will be able to go to the grocery store and find products—made by Nestlé—to deliver that nutrient.”

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Food Trends: Buddha Bowls & Ugly Fruit

The New York Times: “Each December, lists of culinary forecasts pour forth from public relations companies trying to elevate their profiles, food companies looking to sell more food and professional associations hoping to guide chefs as they try to translate the zeitgeist into menu items. Social media wonks have jumped into the pool, too, eager to show off their powerful search analytics.”

“Meals in a bowl are … driven by … yoga, Gwyneth Paltrow, the gluten-free movement, a new appetite for Asian street food and the demand for grab-and-go convenience … It doesn’t hurt that food in bowls can be visually attractive, perfect for an Instagram feed. At Pinterest, which is used by 150 million people a month, Buddha bowls filled with simple vegan or vegetarian ingredients are among the top items that users post. The name evokes the mindfulness with which a monk holds a bowl of food.”

“Lynn Dornblaser, the director of innovation and insight for Mintel, has been trend-spotting for 30 years … The most important development on her list, she said, is the idea that healthful food and drinks are not luxuries … pointing to the growing sales of imperfect fruits and vegetables, often marketed as ‘ugly produce.’ She comments: “People who earn less than $50,000 a year are not buying gourmet olive oil or having Blue Apron delivered. But they’ve got a need for quality products just like everyone else does.”

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GNC Addresses Its Prices Crisis

The Wall Street Journal: “In October, the acting chief executive of GNC Holdings Inc. made a confession: The big vitamin retailer had ‘a badly broken business model.’ Its prices were too confusing and constantly undercut by online competitors. Sales were plunging. Behind the scenes, executives had decided the only way to fix things was to start over. So on Wednesday, GNC will close its 4,400 U.S. stores to overhaul its pricing system, which featured as many as four different prices on some labels.”

“When the stores reopen the next day, labels for GNC’s protein powders, herbal remedies and nutritional supplements will feature just one price. There will still be discounts, but about half of the company’s products will start at lower prices than before, while a quarter of the prices will be higher … While heavy promotions, especially during the holiday period, have become a sophisticated calculus, the nature of setting retail prices has become more complex. Online stores can set algorithms to change prices by the hour and nearly every shopper is armed with a smartphone, making the market transparent.”

“At GNC, executives gathered input from outside consultants, ran tests in 10 markets and had to get the support of outside vendors as well as its franchise owners. The company eliminated gaps between web and store prices, moved to end a discount-card program and determined new prices by comparing products it carried against similar ones at competitors.”

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Short List: Less is More in Processed Foods

The Wall Street Journal: “A yearslong effort by General Mills to remove synthetic food dyes from cereal seems to have turned around that business, with retail sales of its reformulated cereals up 3% in the U.S. in the last reported quarter. But now a persistent decline in yogurt sales has General Mills scrambling … General Mills is adding more organic yogurt and introducing new products like yogurt drinks and snacks that don’t come in the traditional yogurt cup.”

At ConAgra: “Reddi-wip is advertising its use of ‘real cream’ rather than hydrogenated oils, and ‘no artificial growth hormone.’ Hunt’s is promoting how it peels its tomatoes with steam, rather than chemicals. ConAgra’s website for Hebrew National hot dogs brags that they have no artificial flavors, no fillers and no byproducts because ‘the shorter the ingredients list, the better’.”

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Primark & The Art of Bargain Shopping

The Wall Street Journal: “Shopping at Primark stores, stylish Brits know, requires strategy and skill. As many retailers struggle, the destination for trendy $5 sweaters and colorful $3 T-shirts is planning to expand in the U.S. beyond the handful of stores it currently has in the Northeast. The store doesn’t sell online, but operates in nine countries outside its home in the U.K. and Ireland. Its six U.S. stores include one at the original site of Filene’s Basement in Boston.”

“To visit Primark is to navigate throngs of people. They hunt through crammed racks for jeans that look almost like a pair spotted on the runway but at a fraction of the price, with the fear that they may disappear into another shopper’s arms in minutes … Primark stores are large, and product moves quickly. The largest store, in Manchester (UK), occupies 155,000-square feet over three floors.”

“On a recent tour around London’s flagship Primark store on Oxford Street, David Latham, commercial director of Primark, said products are generally organized into three categories. First, there are ‘basics,’ such as plain T-shirts and undergarments that might go for around £2. Then, there are ‘essential’ items like denim roughly in the £8 range. Finally, there are fashion items, which likely have higher price points and more in-demand looks. He recommended mixing and matching across these three categories. Savvy locals, said Mr. Lathan, come into the store ‘three to four times a week’.”

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Total Wine: $2.5 Billion Retail Empire

The Wall Street Journal: “Twenty-five years ago David Trone and his brother Robert opened a small wine shop in Claymont, Del. Today, the Trones preside over a $2.5 billion privately held retail empire based in Bethesda, Md., with 149 Total Wine & More stores in 20 states and plans to open many more next year … Total Wine, which has been profitable since 1991, opened 20 stores this year alone … Total Wine’s biggest impact on American drinking habits has been through its ‘winery direct’ offerings. The company took a commonplace practice—sourcing wine directly from wineries—and turned it into a powerful sales tool.”

“Total Wine bills itself as America’s Wine Superstore, and Mr. Trone believes its reach is greater than even large grocery-store chains … With a considerable customer database, Total Wine executives target specific wines to specific markets. For example, in New Jersey, Total Wine offers a larger selection of Italian wines than it does in other states … The company is also increasing its focus on education, with more in-store seminars and tastings. It’s a wise business move; educated buyers tend to spend more on wine and buy more often.”

“In pursuit of wealthier wine buyers, the company recently entered the futures market, wherein customers pay upfront for wines delivered years later with the expectation that a futures price will be less than the cost of the wine when it’s released years later.”

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The Many Benefits of Better Packaging

The Economist: “Far from being the blight that green critics claim it is, food wrappings can in fact be an environmental boon. By more than doubling the time that some meat items can stay on shelves, for example, better packaging ensures that precious resources are used more efficiently. Planet and profits both benefit … Vacuum packaging helps enormously here (even though shoppers tend to prefer their cuts draped behind glass counters, or nestled on slabs of black polystyrene). The plastic packs, which prevent oxidation, mean meat can stay on shelves for between five and eight days, rather than two to four. It also makes it more tender.”

“Packaging works wonders for customers, too. The resealable kind keeps certain dairy products fresher for far longer in customers’ fridges. The practice of packaging a lump of produce in portions allows the growing number of singletons to prepare exactly what they need and freeze the rest … Longer-lasting products ought to mean fewer trips to the shops. But according to Liz Goodwin, a food-waste expert at the World Resources Institute, a think-tank, half of the money shoppers save through better-lasting products winds up in retailers’ tills anyway. Aspiring cooks are more likely to buy premium items if they know they will use them before they spoil.”

“Some supermarkets are trying to cut down on packaging because the common perception is that it is wasteful. But cutting the amount of plastic covering food makes no sense if products then spoil faster, says Simon Oxley of Marks and Spencer … The next frontier for the world of packaging, he says, is ensuring that as much of it can be reused as possible. That will be a challenge, however, given the hard-to-recycle layers of plastics that go into most vacuum packs.”

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Sour Milk Sea: Flavour & Fluorescent Light

The Wall Street Journal: “Scientists at Virginia Tech report that, in blind tastings, the flavor of milk stored in a standard supermarket-style dairy cooler is significantly degraded by fluorescent light passing through translucent plastic containers. When LED bulbs were used instead, tasters rated the milk about the same as when it was packaged in a lightproof container—which is to say, a lot better.”

“Americans drink less milk just about every year. According to data from the U.S. Department of Agriculture, per-capita consumption is off by more than a third since 1975—which, says Susan Duncan, one of the Virginia Tech scientists, is around the time that plastic milk cartons went mainstream … the widespread adoption of translucent plastic containers almost certainly changed the flavor of milk for the worse. By now, she says, consumers mistakenly believe that this is how milk is supposed to taste.”

“Scientists say that its higher ultraviolet energy, among other characteristics, triggers a process of oxidation that damages essential nutrients, especially riboflavin, resulting in inferior flavor as well as a less healthful beverage. Over longer time periods, LEDs can degrade milk flavor as well, though not as much. Notably, neither kind of light makes milk go sour any sooner … Dr. Duncan says that she is working with the dairy industry … to encourage costlier packaging that blocks light and to suggest that retailers switch away from fluorescent bulbs. Meanwhile, you might want to buy milk in cardboard cartons.”

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