Category: Business

How can Starbucks be thriving without any indoor sit-down space?

by philg

“Starbucks sales miss estimates, shares drop despite rosier forecast” (Reuters, April 27, 2021):

U.S. sales returned to pre-pandemic levels, Chief Executive Officer Kevin Johnson said during a call with analysts.

How is this possible? If Mx. Johnson was talking about sales in the first quarter of 2021, that’s a time period when all Starbucks had closed down indoor dining, when the weather in most of the U.S. was uncomfortably cold for sitting outside, and when many American downtown offices were still vacant. How can his/her/zir/their company be selling just as much coffee as when people had the option to come in, share the bathroom with the local homeless, and sit down with the SUV-driving single moms?

If indoor dining turns out to be worthless, from a business point of view, how could Starbucks not have figured that out years ago and thereby saved itself a ton of cost? They would never have gotten into the bathroom dispute that forced “Starbucks Closes More Than 8,000 Stores Today For Racial Bias Training” (NPR) because they wouldn’t have had public restrooms.

I guess one answer is that the U.S. has changed. Customers used to demand and pay for the indoor dining space, but now they don’t want it nor are they willing to pay for it.

I’m kind of amazed that Starbucks is popular in its take-out-only configuration. So many Americans are sitting at home all day. Why do 15 minutes of driving to get coffee that takes 5 minutes to brew at home? If you’re on a long car trip, wouldn’t it make more sense to stop at McDonald’s where the dining room is open so that you can go in and use the bathroom?

Also, I wonder if this kind of business transformation will result in further fragmentation of American society. Due to its outrageous prices relative to quality, Starbucks had a somewhat upscale clientele. Nonetheless, it was a place where one might see a wider variety of people than one would see by driving in a private car from point to point. If Americans don’t see each other in common spaces, how will we know what our fellow residents of this stolen land are like?

November 2019, Hangzhou:

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Small business autopsy

by philg

Looking for a place to rest in between practice helicopter instrument approaches last month, I stumbled on Mike’s Runway Diner at the Auburn/Lewiston Airport (Maine). From the restaurant’s Facebook page….

We are a family owned business that offers Americana comfort food at a reasonable price. Our portions are huge and everything is prepared fresh and you can sit along the runway and watch the planes. (318 Likes; 334 followers; 230 check-ins)

March 8, 2020: Happy Sunday. Come out and enjoy this great day at Mike’s Runway Diner. Sit along side the runway and watch the Planes take off and land while enjoying a great meal.

March 18, 2020: As many of you have heard we had to close the Restaurant due to the Coronavirus pandemic. We will be open tomorrow Thursday from 7am to 11am for to go orders only. We will keep the page updated as to when restaurants can open again. Remember to isolate and wash your hands

April 17, 2020: Mike and I are still unable to get certain provisions to run the restaurant. We will keep every one updated on when we will be able to open back up. Stay safe and indoors.

May 14, 2020: Good morning. As of now Mike’s Runway Diner is on track for opening at the beginning of June. We will keep our page updated . Thank you for all the support we have received during the closure. Mike and I look forward to seeing our favorite people (our customers). See you soon 🙂 Mike and Heather

July 5, 2020: We are still working on trying to open back up. Waiting on the restrictions to lift. We look forward to seeing everyone again soon. Mike and Heather

July 29, 2020: Well the time has come to say good by. Corona got the best of our restaurant and we were not able to move forward. Mike and I thank everyone for your business, love and support. We will cherish everyone and the memories for ever. Thank you and we will miss you all. Mike and Heather

(Minor corrections made to the above for readability.)

A partial screenshot:

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Profiles in Corporate Courage

by philg

Happy Pride Month! I would love to hear everyone’s plans for celebration. We have a two-car garage here in Maskachusetts and, for compatibility with neighbors’ yard signs, I had thought about painting one door in a rainbow flag and the other in a permanent Black Lives Matter sign, but now that we’ve sold the house (signed P&S) and are moving to Jupiter, Florida I am not 100 percent sure that the new owner shares my commitment to social justice.

I’ve never wanted an Apple Watch (an iPhone in the pocket is embarrassing enough), but the company’s courageous commitment to Pride is tempting me to “celebrate all year long”. From the U.S. site:

A detail page:

Some text underneath:

Weaving together the colors of the Pride flag, the Pride Edition Braided Solo Loop band features a unique, stretchable design that’s ultracomfortable and easy to slip on and off your wrist. Created by weaving 16,000 recycled polyester yarn filaments around ultrathin silicone threads using advanced precision-braiding machinery, then laser cutting the band to an exact length for a custom fit. The band offers a soft, textured feel and is both sweat and water resistant.

Apple is proud to support LGBTQ advocacy organizations working to bring about positive change, including Encircle, Equality North Carolina, Gender Spectrum, GLSEN, the Human Rights Campaign, PFLAG National, the National Center for Transgender Equality, SMYAL, and The Trevor Project in the U.S., and ILGA World internationally.

This Pride Edition watch/band is not available from Apple’s United Arab Emirates page, otherwise a mirror image of the U.S. page. Perhaps folks in UAE don’t need to hear the Good News about Rainbow Flagism? From “LGBT rights in the United Arab Emirates” (Wikipedia): “Male homosexuality is illegal in the UAE, and is punishable by the death penalty under sharia law.”

See also, from Titania McGrath, a comparison of major corporations’ Pride Month displays in non-Muslim versus Muslim regions.

Brush your teeth with pride and shave without toxic masculinity (P&G owns Gillette)….

“We prefer to think of it as the Blue Screen of Pride”:

From diversity.google: “The Gayglers is comprised of LGBTQ+ Googlers and their allies. The group not only leads the way in celebrating Pride around the world, but also informs programs and policies, so that Google remains a workplace that works for everyone.” Apparently, “around the world” does not include Arabia:

Should we ask Melinda Gates to fund a project to help these companies translate their Pride Month messages into Arabic, Urdu, Indonesian, etc.?

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Why not tiered real estate commissions?

by philg

From this blog in 2005:

People who sell $1 million condos often complain that paying a 6 percent standard (read “fixed by collusion” among realtors) commission is too much ($60,000 for what might only be a few days of work). Economists who have studied the real estate market, however, find that in some ways the commission is too low because realtors don’t work very hard to sell clients’ houses compared to their personal houses. In other words they sell a customer’s house relatively cheap so that it will sell quickly rather than work for many weeks to get the best price and 6% of the extra.

Why haven’t we seen anyone propose a commission structure that says the realtor gets a 25% commission… but only on the amount above the assessed value of the property? Your typical $1 million NY or Boston apartment is assessed at maybe $850,000 and could be sold for that price with almost no effort in a few days so the commission paid on such a sale shouldn’t be more than $1000. If a realtor could sell the place for $1.2 million via clever marketing, however, she should be entitled to a fat commission.

In the intervening 16 years, various Internet services have made it easier for owners to sell their own houses. We can assume that realtors add value, since most people still do hire realtors, but they’re adding value on top of an easy-to-establish base, e.g., 10 percent below the Zillow Zestimate. Presumably a “for sale by owner” (free) listing on Zillow could easily sell a house at 90 percent of its Zestimate. (5 minutes of marketing effort!) If so, the structure that would align sellers’ interests with agents’ interest is a commission that was 0 percent of the first 90 percent of expected value and 15-25 percent of the sales proceeds above that.

How can it still be case that an agent who does a terrible job, selling a house for 95 percent of its value, gets paid almost as much as an agent who does a superb job, selling a house for 115 percent of its value?

This is the kind of question I am pondering as we declutter and pack up for Jupiter, Florida!

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Animated and illuminated BLM yard art? (or Rainbow Flagism displays?)

by philg

Our neighborhood has gone from Bleak Maskachusetts Winter to Yet Bleaker Maskachusetts Winter due to folks having taken down their epic yard displays, e.g.,

What about cashing in on the latest trends in righteousness, and making American suburbs far more beautiful in the process, by offering animated and illuminated BLM yard art analogous to what one can buy for Christmas? The Christmas season is short, but the BLM season can last continuously for decades!

Americans have demonstrated a commitment to BLM yard displays by purchasing signs, but generally these are not illuminated. This should give us some confidence that some containers of night-time BLM yard displays would fly off the shelves.

Readers: What should the illuminated and animated displays depict? Let’s refer to the Wikipedia timeline of BLM for a few starter ideas:

  • animatronic Karen Amy Cooper with camera and image recognition software that can identify Black passersby and harangue them
  • an inflatable burning Minneapolis Target store, commemorating the mostly peaceful protests of 2020

What if we adapt the idea to the religion of Rainbow Flagism? Would would the nighttime lawn scenes look like then?

Related:

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I was proved wrong about Goldman Sachs

by philg

From How to steal $billions (September 2019), regarding the combined exploits of Jho Low and Goldman Sachs as chronicled in Billion Dollar Whale:

Despite connections to the Obama White House, things do begin to unravel for Mr. Low. I don’t want to spoil the suspense, though. The worldwide civil and criminal litigation is ongoing, but it seems safe to say that Goldman gets to keep all of its fees!

Turns out that I am wrong yet again… “Goldman Sachs Malaysia Arm Pleads Guilty in 1MDB Fraud” (NYT):

Goldman employees, the bank said, took part in a scheme to pay $1 billion in bribes to foreign officials. The bank, in turn, arranged the sale of bonds to raise $6.5 billion that was intended to benefit the people of Malaysia but was instead looted by the country’s leaders and their associates.

In the end, the scandal, which netted the bank a relatively paltry $600 million in fees, will cost Goldman and its current and former executives dearly. The bank itself will pay more than $5 billion in penalties to regulators around the world, more than it had to pay for peddling bonds backed by risky mortgages a decade ago. And it has moved to recoup or withhold more than $100 million in executive compensation, a rare move for a Wall Street bank.

(It is fascinating how the NYT characterizes a 10 percent fee for selling bonds (more typical is less than 1 percent, according to the book; the super high fees Goldman was able to get made it obvious that fraud was involved, said the author) as “relatively paltry”)

This is a good time to check in with Malaysia. Like Laos, Cambodia, and Vietnam, the country has enjoyed a low death rate from Covid-19:

“Amid coronavirus surge, Malaysia asks what went wrong as Muhyiddin and other politicians take brunt of criticism” (South China Morning Post, two weeks ago):

Three months after an initial strict lockdown ended, the country faces a sharp uptick in Covid-19 cases

Wikipedia has Malaysia down as 85-percent masked, as of August 9, compared to 90 percent in renewed-plague Spain, 83 in renewed-plague France, 75 percent in the always-plagued U.S., 65 percent in Germany, and 4 percent in Denmark.

Related:

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Is watching sports less popular because we can’t watch other people watching sports?

by philg

“Why Are Pandemic Sports Ratings So Terrible?” (New York Magazine) describes a fall in TV viewership in a country where millions of people are more or less locked into their homes, unemployed, etc. How can Americans possibly have something better to do right now than turn on the TV and watch a game that they used to enjoy watching?

Here’s my theory: a big reason that people care about sports is that they see other people caring about sports. In the pre-coronapanic days you’d go into a restaurant and see people in the bar with their eyes glued to a professional sports game. This subconsciously communicated that the game was important. Maybe you’d go over to a friend’s house and the game would be on. Another hint that this game is important.

If you’re by yourself at home, on the other hand, there is nobody else to tell you that a particular sport is important enough to be worth watching.

Readers: What’s your theory? Americans are glued to screens more than ever, right? Why aren’t they watching sports on those screens?

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Blacks and Jews band together to fight the Blondes

by philg

“United Sued for Packing NFL Charters With Young, Blond Crews” (Bloomberg) warms my heart on so many levels, and not simply as a proud former Delta employee.

United Airlines Holdings Inc. packs its charter flights for sports teams with young, blond crews and bars older flight attendants from working the plum routes, according to a new lawsuit.

The attendants — a Black woman who has worked for the airline for 28 years and a Jewish woman with 34 years of tenure — say that they both tried repeatedly and unsuccessfully to get assigned to work the charter flights.

Sharon Tesler and Kim Guillory said they were told by supervisors that they were unable to get work on the charters because they weren’t on “preferred” lists that were based on team preferences, according to the complaint.

They said they later discovered that young, white blond attendants — with less seniority — were given the assignments.

United Airlines “has adopted and continues to implement procedures that are designed to ensure that young, white, blond/blue-eyed, female employees receive positions with the charter program, while more senior, and Black and Jewish employees such as plaintiffs, do not,” they said in the complaint.

Is it fair to say that this repairs all of the damage from the Jesse Jackson Hymietown incident?

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Fewer retail stores in cities due to higher insurance rates going forward?

by philg

“$1 billion-plus riot damage is most expensive in insurance history” (Axios):

The vandalism and looting following the death of George Floyd at the hands of the Minneapolis police will cost the insurance industry more than any other violent demonstrations in recent history, Axios has learned.

Why it matters: The protests that took place in 140 U.S. cities this spring were mostly peaceful, but the arson, vandalism and looting that did occur will result in at least $1 billion to $2 billion of paid insurance claims — eclipsing the record set in Los Angeles in 1992 after the acquittal of the police officers who brutalized Rodney King.

Shops in the suburbs weren’t torched or looted, right? Rational insurance companies will therefore charge higher rates going forward for retail stores in urban areas. Combined with the extra risk of being shut down due to coronapanic, the risk of losing customers as richer city-dwellers flee during coronapanic, and the higher minimum wages that some cities mandate relative to surrounding suburbs, why would rational business owners decide to continue operating a lot of these shops? So the white suburbanites who came into the cities to join the protests, ostensibly to help their Black brothers, sisters, and binary-resisters, will have ended up permanently degrading city life for Blacks of all gender IDs.

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BLM theme meals at fast food restaurants?

by philg

Stopping alongside one of the elegant restaurants that the Maskachusetts License Raj hasn’t managed to shut down, I was offered a gourmet meal:

If there can be a “Travis Scott Meal”, why not a “Jacob Blake Meal” for those who want to demonstrate their commitment to the Black Lives Matter movement? For those who never think about anything other than COVID-19, a “Dr. Fauci Meal” whose contents may change from day to day? For the politically oriented, a “President Harris Meal”?

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