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Hispanic spending down in 2017

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Hispanic consumers are spending less this year and the retail industry is concerned.

“The Hispanic consumer in the U.S. is shopping much less,” Target CEO Brian Cornell said during the Fortune Brainstorm Tech conference in July. “Particularly among border towns in the U.S., you’re seeing a change in behavior.”

Why is this important?

Hispanics make up 18% of the U.S. population (about 57 million people) and their buying power ($1.3 trillion in 2015 according to Nielsen) is growing faster than the rest of the country. Retail experts, economists and business leaders believe the administration’s stance on undocumented immigrants is causing anxiety in the Latino community.

  • Millions of immigrants are staying home and not shopping out of fear,” according to Robert Kaplan, president and CEO of the Federal Reserve Bank in Dallas, Texas.
  • Hispanic business leaders added, “Many Hispanic consumers are saving money in case something happens to them or their loved ones in any crackdown on immigrants.”
  • “There’s concern about going out in an environment where you could be deported,” noted NPD analyst Marshal Cohen. NPD Group is a market research company that covers 20 industries and interviews 12 million consumers a year.

NPD found that purchases (by Hispanics) at certain retailers have fallen 8 percent in 2017. NPD sports industry analyst Matt Powell says that the purchasing slowdown is disproportionately impacting the sportswear market. The category hit hardest has been shoe chains, followed by sporting goods; however, no channel has been immune to the slowdown.

 

Why Amazon’s Lower Price Strategy for Whole Foods Will Work & Why It Won’t

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Amazon is dramatically reducing prices at Whole Foods to attract new customers and bring back those who left to find lower-priced natural and organic foods at traditional super markets. The lower price strategy may be just what Whole Foods needs to win back customers after same store sales have dipped over the past two years. But will it be enough?

Why lower prices will work for Whole Foods:

  • High prices are a key reason long-time Whole Foods customers left and competitive prices should bring many of them back.
  • Millennials are driving large increases in produce sales and have a healthy appetite for high quality organic fruits and vegetables.
  • Whole Foods shoppers may be able to order some items online not stocked at their local store and pick them up at the store.

Why lower prices won’t work for Whole Foods:

  • Already in a price war, large super market chains have been lowering their price points even further – so low Whole Foods may not be able to match.
  • Convenience is important, especially to Millennials who prefer one-stop grocery shopping. Even if Whole Foods shoppers can order other items online and pick up at the store, it still requires an additional step.
  • Lower margins will make it more difficult to absorb the costs of home delivery – a strategy Whole Foods would like to pursue.

Time will tell. Stay tuned.

This brick and mortar retail sector is thriving.

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C-stores get an “A” for growth. While many brick and mortar stores have been closing, the convenience store industry has actually doubled in size over the past 30 years and is still growing. In 2016, the number of c-stores in the U.S increased to 154,535 and experienced record in-store sales of $233 billion.

Key sales driver – C-stores account for 80% of all the auto fuel purchased in the country.

Fill-up & light-up – Gas and cigarettes are still the most popular c-store purchases followed by beer, non-alcoholic drinks and foodservice (prepared food) items.

Mouth-watering margins – Foodservice is becoming the c-store industry’s most profitable category, contributing over 21% of in-store sales in 2016.

Hungry for change – Sandwiches, hot dogs and pizza are still the most popular meal items, but healthy options such as salads, yogurt parfaits and fruit cups are increasingly in demand.

Fresh opportunity – 76% of 18-34 year-olds would purchase more prepared foods from c-stores if the foods are designated as local, natural, and in environmentally friendly packaging.

Core customers – Consumers aged 35-44 are more likely to be daily or weekly c-store shoppers, and those 25-34 are more likely to buy in-store merchandise after purchasing gas.

Older, not so much – Customers, aged 55 and up, are less likely to make daily or weekly c-store visits or to stop in for a post-gas merchandise purchase.

Whoa! – Texas has, by far, the most C-stores with 15,671. That’s one c-store for every 752 residents of the Lone Star state. California is a distant second with 11,774, one c-store for every 3,355 residents.

 

When it mattered most, General Mills did the right thing.

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#1: September 1987 – A baby chokes to death on a rubber ball inserted into a Cheerios box as a free premium toy. The “Powerball” toy had passed all Consumer Product Safety Commission (CPSC) tests for children under the age of two.

However, the elderly person who was babysitting the child had dexterity problems and couldn’t remove the ball. The EMT who first arrived easily removed it – unfortunately too late to save the baby. The Powerball passed the truncated cylinder test (too large to fit inside it) so General Mills was not technically at fault.

General Mills had to decide: Alert consumers about a premium that passed all CPSC tests and risk damage to the company’s most valuable brand or allow the promotion to run its course. General Mills did the right thing and alerted the media that it was pulling the remaining Cheerios boxes with the free “Powerballs” inside off store shelves. It was costly, but doing the right thing did not cause any long-term damage to the company or the Cheerios brand.

#2: 2007 World Economic Forum – Kofi Annan, former Secretary-General of the United Nations meets with General Mills CEO Ken Powell. They talk about the plight of millions of malnourished and underfed people in Africa. Kofi asked, “Is there something a global food company, like General Mills, can do to help these people?”

That was the challenge that started an internal program at General Mills. A program that led to the formation of Partners in Food Solutions in 2011, an independent, non-profit organization. Soon other major food companies including Cargill, Hersey, DSM and Buhler joined General Mills’ vision of improving food security and economic development across Africa.

Leveraging their knowledge and expertise of food production, hundreds of volunteers from these food companies donate their time to help food producers across Africa. By helping to improve the capacity, efficiency and product quality of local food processors, Partners in Food Solutions seeks to advance food security in the African countries that need it most.

Over the past five years, Partners in Food Solutions has grown to nearly 1,000 volunteers helping over 800 small food companies in seven African countries.

Bob Andersen is freelance writer and former employee of General Mills Inc.

A CEO’s Advice to his Daughter

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“These are the little secrets they don’t teach in school or tell you about when you’re working in a large corporation.” – Robert Hawthorne

Robert Hawthorne was President & CEO of Pillsbury Canada, President & CEO of ALPO Petfoods, President of The Pillsbury Company (North America), President of Select Comfort Corporation and the CEO of the Ocean Spray company.

I had the good fortune of meeting Robert at a General Mills alumni gathering. I asked Mr. Hawthorne if he had any “words of wisdom” and he was kind enough to share the advice he gave his daughter when she graduated from college.

What follows are his thoughts on starting a new job and becoming a manager. It wasn’t written to sell a book. In fact, Robert pointed out that these are management techniques “you won’t find in a book.” It’s invaluable insight without the fluff you might find in a self-help guide.

His original email to his daughter grew into three sections (1) The Basics, (2) Becoming a Manager, (3) Advanced Management Techniques. It’s clear this advice is valuable for anyone at any stage of their career.

Again, my sincerest thanks to Robert Hawthorne for sharing this with me … and now you.

PART 1: THE BASICS

30-Day Plan

In your first 30 days in a new job you have the opportunity to establish how you will work and what you’ll be working on. I would recommend writing out a list of ’30 Day Objectives’. Share it with your Boss and ensure that it has his/her input. It should be simple and clear.

Time Management

Take a Time Management course! Do not hesitate. If your employer doesn’t offer one … sign up and pay for it yourself. This will provide a life long system to organize your day, your life and establish priorities. I am continually surprised by the lack of good time management skills with executives I have coached. This is the one course that everyone should take! Sounds simple…but…most people can’t find the time to do this…. Here’s one tip…take ten minutes at the start of each day and write down what you need to get done. Don’t ever just dive in.

The Tool Box Concept

When you graduate and start your first new job … assume you know absolutely nothing! Your boss will believe this to be true so you might as well be on the same page. Try to think of your knowledge base as a ‘tool box’. Upon graduation the school gives you a big empty tool box containing a screw driver and a pair of pliers. Going forward you will gradually add new tools and by the time you are about 30 years of age the tool box will contain a full set of wrench’s, a power drill, saw and many other things that you know how to use really well. Your job is to build up the tool box by adding more and more sophisticated equipment over time. In my experience it is far more effective when a new employee acknowledges that they have a lot to learn and are willing to do so. People who act like they know more than they really do are always viewed negatively.

Work Hard

There is usually very little difference between recent graduates. They all did well in school and have exhibited leadership skills or they wouldn’t have been hired. Everyone is equal at the starting gate. So how can you differentiate yourself from all the other recent hires? The answer is ‘hard work’. If you work 50 hours a week and everyone else puts in 40 you will gain +25% more knowledge and build your tool box at an accelerated pace. You will also get noticed and be more knowledgeable. If you really want to get ahead this is a prerequisite.

But Work Smart

As your career progresses hard work alone won’t get it done. As I progressed I was getting recognized for long hours but realized that there were ways to work smarter. There were times when I found myself working until 2:00 in the morning and coming in early totally exhausted. There is a fine balance between putting in the elbow grease and working smart. Developing good time management techniques will provide the edge. I also try to think about balance on 4 fronts: Work, Family, Personal and Community. While you are working harder than others at work, you need to have a full, complete life for yourself, your family and for giving back to the community. Too much work can choke out the other areas and the other areas are where you will be remembered after you’re gone.

Entitlement

Years ago I had to remove an executive from their current job. This person had an R&D background and been promoted into a Director of Marketing position. It was clear that he did not have a marketing background and was ineffective in this job. I wanted to move him back into R&D but he was reluctant to go. He pointed out that his failure at the new position was not his fault…it was the fault of the company! He suggested that we send him to Harvard so he could learn all about marketing! He clearly felt entitled. I was flabbergasted. There is a clear difference between entitlement and empowerment. Someone once said ‘entitlement is empowerment run aground’. In business you are not entitled to anything. You must earn it. As you start out, do not fall into the entitlement trap.

Managing-up

Managing-up is all about getting regular, quality face-time with those above you, particularly your Boss. When you start a new job, try to negotiate a regular time to interface with your Boss. Once a week is OK but 5 to 10 minutes every day is optimal. Try to do this each morning. As an employee, your job is to reduce your Boss’s anxiety level to zero. Once you are meeting regularly with your Boss he/she will get to know and trust you. Managing-up requires that you take advantage of opportunities to interact with more senior executives. Use this time to update them on the accomplishments of your team. Always start by delivering the good news. If you launch into the bad news first you will never get to deliver the good stuff and will appear as being constantly negative. I have worked with people who can’t wait to tell you the bad news and tried to avoid them. These managers never seemed to get ahead in their careers.

Saying No

Pushing ahead in your career often means pushing back against unreasonable demands and expectations. If you have a Boss who is piling it on and you are having trouble coming up for air you will need to push back. Start with your boss’s explicit needs, which usually break down to ‘make me money, save me money or make my life easier’. If you are doing these things well, you are going to be appreciated. However, your ability to handle a big workload may tempt the Boss to pile more on and run the risk of burning you out. If this is the case, make it a priority to open up the lines of communication with your Boss and find out what the real priorities are, and deliver on those. That way you can push back and delay work that is peripheral to your goal of getting ahead. Once you understand the real priorities you can go back and get agreement to reschedule the less important tasks. Recalibrate regularly with your Boss…have discussions to confirm you are on track to meet or exceed expectations.

How’s it Going?

The most common casual question you will get from a superior is… ‘How’s it going?’ The absolute best answer is…’Terrific’…even if it is not the case. Superiors do not want to hear negatives or long explanations of what going wrong…so don’t bother. The answer is always… ‘Terrific!’ Sounds too simple…but very few people do this.

Internet Usage and Emails

This one may seem obvious…but… be very careful with what you are viewing on the Internet. This stuff gets monitored by most large companies. When forwarding emails from your work computer be very, very careful…off color jokes and photos are a big no-no. Never-ever send a nasty email to a fellow employee even you feel they deserve it. This always turns out badly. With access to Facebook and all sorts of other social networking channels there are issues around corporate confidentiality and viruses bringing down networks and servers. Don’t send anything on corporate email or internet connection that you wouldn’t feel comfortable being published on the front page of the Wall Street Journal! Be very careful with Facebook etc and make sure not just anyone can view your pictures (drinking with friends). Lastly, beware of water cooler conversation. In every company there is always at least one person who loves to gossip. If you join that game it’s an easy trap and in which to be ensnared and difficult get out of.

Dress For Success

Many years ago a best selling book came out entitled ‘Dress For Success’ and I read it. The author did a study where he took photos of the same person wearing different suits and ties and showed each individual picture to different groups of 100 people. This provided a statistically valid sample. The results were amazing. People thought the guy in the photo wearing a dark blue suit, white shirt and maroon tie was twice as smart as the guy wearing a brown suit! As I read the book it became clear that what your wear can have a powerful impact on how others view you. Most of us do not wear suits to work anymore but I believe the concept remains intact. If you haven’t given any thought to how you dress…start right now! Save the weird outfits for the weekend. Additionally, watch how some the more successful senior executives are dressed. This is usually a good guide.

Public Speaking

There will be times when you will be called on to express yourself in front of a group or give a formal presentation. It is critical that you develop reasonable public speaking skills as they can rapidly push you up the ladder. There are different ways to become more competent speaker. I was always very nervous to speak publicly but overcame my fear by signing up for a presentation course, reading a few books on the subject and forcing myself to do it whenever I could. I found the more I spoke publicly the more confident I became. As you rise higher in the organization there will be more demands for you to speak in public …build this skill now!

-Robert Hawthorne

Part 2, Becoming a Manager