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Message
I find myself walking into a biz & questioning the biz model
Posted on 11/11/08 at 12:15 pm
Posted on 11/11/08 at 12:15 pm
Starbucks, Circuit City,Cold Stone Creamery, Quizno's, and DOZENS of others besides the Automakers...
Big , Ginormous, Hugegantic parts of their BASIC business models don't make sense anymore. It's just that simple. The ground rules are different now. The underlying assumptions have changed.
These businesses only survive when conditions are perfect, and when the consumer is feeling the pressure, these places just implode.
I keep walking into small retail, Big Box, and QSR and asking myself; How the hell are these guys still alive ?
Big , Ginormous, Hugegantic parts of their BASIC business models don't make sense anymore. It's just that simple. The ground rules are different now. The underlying assumptions have changed.
These businesses only survive when conditions are perfect, and when the consumer is feeling the pressure, these places just implode.
I keep walking into small retail, Big Box, and QSR and asking myself; How the hell are these guys still alive ?
6
Posted on 11/11/08 at 12:23 pm to Lsupimp
quote:
How the hell are these guys still alive ?
quote:
Quizno's
Black and Bleu Salad
quote:
old Stone Creamery
awesomely goodness
Posted on 11/11/08 at 12:38 pm to TigerDeacon
Those two are closing locations like wildfire.Both are WORTHLESS as business models, it is the exception that is able to keep the doors open.
It is not enough to have a good sandwich or a yummy ice cream. You have to hit EVERY part of the equation. Rising food costs,increased labor costs,etc. combined with a consumer who stays home =closed store.
It is not enough to have a good sandwich or a yummy ice cream. You have to hit EVERY part of the equation. Rising food costs,increased labor costs,etc. combined with a consumer who stays home =closed store.
Posted on 11/11/08 at 12:42 pm to Lsupimp
Apply to McDonalds please
Posted on 11/11/08 at 12:42 pm to Lsupimp
quote:
I keep walking into small retail, Big Box, and QSR and asking myself; How the hell are these guys still alive ?
Whenever I go into a department store during the week I see tons of employees just standing around and wonder the same thing too.
I still don't understand how Blockbuster is still around. I would imagine that within 10 years internet streaming will have completely replaced them.
I expect consolidation in realty as well, and not just because of the housing market, but because internet searching has replaced much of the value that they previously provided.
Posted on 11/11/08 at 12:49 pm to Lsupimp
quote:
Those two are closing locations like wildfire.Both are WORTHLESS as business models, it is the exception that is able to keep the doors open.
It is not enough to have a good sandwich or a yummy ice cream. You have to hit EVERY part of the equation. Rising food costs,increased labor costs,etc. combined with a consumer who stays home =closed store.
I would hope that you realized that my post was an attempt at humor . . . . lame though it was.
Oh and FYI the black and blue is a SALAD.
Posted on 11/11/08 at 12:52 pm to igoringa
FWIW, McDonalds is getting HUGE pushback from franchisees b/c of the "dollar menu". The current strategy is market segment over profitability in the short term, and it is working for them. They don't have to "drive trial" like a Quiznos, they are a known quantity-they just need to win on price, and keep people comin in the doors. They have the bench strength and the amazing brand awareness to make it through hard times.
Posted on 11/11/08 at 12:53 pm to Lsupimp
quote:
I keep walking into small retail, Big Box, and QSR and asking myself; How the hell are these guys still alive ?
As people get their mortgages paid for them, there will be plenty left for ice cream and lattes, or spinners and patterned fingernails.
This post was edited on 11/11/08 at 12:59 pm
Posted on 11/11/08 at 12:58 pm to Lsupimp
quote:
I keep walking into small retail, Big Box, and QSR and asking myself; How the hell are these guys still alive ?
I have been asking myself that for YEARS.
Posted on 11/11/08 at 1:04 pm to TigerDeacon
quote:
It is not enough to have a good sandwich or a yummy ice cream. You have to hit EVERY part of the equation. Rising food costs,increased labor costs,etc. combined with a consumer who stays home =closed store.
That universally applies to the retail or food industry, not just those stores. Are any of those franchises, or are they all corporate? Starbucks saw the writing on the wall, and already closed 600 stores earlier this year. I think you'll see more of that, rather than an outright vaporization a la Circuit City, who has been sucking wind for at least a year.
Posted on 11/11/08 at 1:23 pm to Lsupimp
So your hypothesis is only because conditions have been 'perfect' for decades (several decades in some of these cases), such companies exist? A touch extreme wouldnt you say?
They dont 'make it', they thrive... like Wal-mart and such. Look I am not saying the above low cost providers are not overextended and in for hurt, but just as you should not evaluate their model during 'perfect times', you should not put 100% weight on their models in epic once in a lifetime disastrous times.
quote:
They have the bench strength and the amazing brand awareness to make it through hard times.
They dont 'make it', they thrive... like Wal-mart and such. Look I am not saying the above low cost providers are not overextended and in for hurt, but just as you should not evaluate their model during 'perfect times', you should not put 100% weight on their models in epic once in a lifetime disastrous times.
Posted on 11/11/08 at 1:30 pm to igoringa
Ok, Sunshine. Just sit back and watch.
Posted on 11/11/08 at 1:33 pm to Lsupimp
quote:
Ok, Sunshine. Just sit back and watch.
Sunshine? LMAO, to the exclusion of maybe Colonel with the Dow 5000, I think you will be hard pressed to find anyone that has been more pessimistic about the situation then me (dumped 401k into T bills at 13,800).
That being said, I do not believe every single commercial enterprise will cease to exist except Z Burger place and Walmart. That is not being Sunshine-ish, that is just being reasonable.
Is their a lot of hurt ahead... ofcourse.
Posted on 11/11/08 at 1:52 pm to igoringa
I know a little about retail.
I know a little about franchising.
I know very little about hedge funds and the mechanisms of the Dow.
I too went to cash before the bottom fell out-So we share that.
There is a full-blown CRISIS on the horizon in numerous segments for all but the most hearty.Only clear segment leaders will survive. Those that depend on expansion to prime the pump will wither, and lacking oxygen, become extinct. That's my theory.It's not science, just my opinion, as some guy on a message board who has his ears to the ground.
I think many people are having trouble understanding the extent of this trouble.
People are really struggling to keep the doors open and the worst of it is not here yet. Much small retail really doesn't have a clear justification to even exist . Many are just a by-product of a cash-rich environment, and an atmosphere when unsound models could survive.
I know a little about franchising.
I know very little about hedge funds and the mechanisms of the Dow.
I too went to cash before the bottom fell out-So we share that.
There is a full-blown CRISIS on the horizon in numerous segments for all but the most hearty.Only clear segment leaders will survive. Those that depend on expansion to prime the pump will wither, and lacking oxygen, become extinct. That's my theory.It's not science, just my opinion, as some guy on a message board who has his ears to the ground.
I think many people are having trouble understanding the extent of this trouble.
People are really struggling to keep the doors open and the worst of it is not here yet. Much small retail really doesn't have a clear justification to even exist . Many are just a by-product of a cash-rich environment, and an atmosphere when unsound models could survive.
Posted on 11/11/08 at 1:55 pm to TigerinATL
quote:
Whenever I go into a department store during the week I see tons of employees just standing around and wonder the same thing too
That's not unusual, at least it wasn't when I worked retail 13 years ago. The weekday shift people restocked and merchandised everything (or, if they were lazy, stood around and talked). Sales were made on the weekends, on holidays when people were off, and of course, during the Christmas season. I can remember being thrilled if I hit the $100-$300 mark on weekdays.
Posted on 11/11/08 at 2:03 pm to Lsupimp
I don't disagree with that point, LSUpimp. I think the majority of the MB people would agree with your sentiments about the current state of the economy and its ongoing and future impact on the majority of retail businesses.
In other words, what he said.
quote:
That being said, I do not believe every single commercial enterprise will cease to exist except Z Burger place and Walmart. That is not being Sunshine-ish, that is just being reasonable.
Is their a lot of hurt ahead... ofcourse.
In other words, what he said.
Posted on 11/11/08 at 2:06 pm to Lsupimp
Pimp, are you one of these guys who believes big in Internet retailers as opposed to actual storefronts?
Posted on 11/11/08 at 2:10 pm to Cold Cous Cous
No.
I'm somebody who believes that with prosperity comes "extra " cash and with that surplus comes a desire to expand into areas away from your core competencies. Thus we are left with doctor's wives running a 50k annual deficit at the neighborhood Cold Stone Creamery. Same on a larger scale with big business...
I'm somebody who believes that with prosperity comes "extra " cash and with that surplus comes a desire to expand into areas away from your core competencies. Thus we are left with doctor's wives running a 50k annual deficit at the neighborhood Cold Stone Creamery. Same on a larger scale with big business...
Posted on 11/11/08 at 2:12 pm to Lsupimp
quote:
There is a full-blown CRISIS on the horizon in numerous segments for all but the most hearty.
I completely agree and looking back at my posts, I can see I undersold what I think the severity of the issue is.
quote:
Only clear segment leaders will survive.
I think there will be carnage, but not to the end game extent you suggest here. The world will still have Wendys and Target.
quote:
Those that depend on expansion to prime the pump will wither, and lacking oxygen, become extinct.
I'll buy that.
quote:
I think many people are having trouble understanding the extent of this trouble.
I completely agree, it is beyond anything in our lifetime.
quote:
People are really struggling to keep the doors open and the worst of it is not here yet.
Agree again
quote:
Much small retail really doesn't have a clear justification to even exist . Many are just a by-product of a cash-rich environment, and an atmosphere when unsound models could survive.
I think we are closer on this then it seems. Significant carnage ahead (but I do think some tier 2's will survive behind the market leaders).
Posted on 11/11/08 at 2:17 pm to igoringa
Yes, seriously, it seems that the only question is the scale of the carnage and as pessimistic as you are, I am even gloomier. Yeah me !
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