Home » Retail » Recent Articles:

Taco Bell Sans Drive-Thru

October 2, 2017 Featured, Retail Comments Off on Taco Bell Sans Drive-Thru

Recently a longtime regular reader sent me an interesting article about Taco Bell’s big 5-year expansion plans — 300+ new locations. Taco Bell’s free-standing building design is instantly recognizable: one=story, parking lot, drive-thru window, plastic interior.

In 1994 a Taco Bell was built at the SW corner of Jefferson & Russell. After it failed it became a short-lived financial institution. The building was later razed and a multi-story daycare built on the site. March 2012

So what’s interesting about hundreds more?

Around 55 to 70 percent of Taco Bell’s revenue comes from orders purchased at the chain’s drive-thru windows. Which is why it’s rather shocking that the Tex-Mex brand plans to open hundreds (300 to 350 locations to be somewhat exact) of new drive-thru-less cantinas by 2022. More specifically, the chain wants to make its presence known in urban areas.

Zeroing in on big cities like Detroit, Pittsburgh, Boston, and New York (including a plan to open at least 50 locations around the city’s five boroughs). The new-and-improved “urban in-line” or “cantina-style” stores to come will be designed to express the local vibes with artwork, open kitchens, and digital menu boards. (Food & Wine)

The first Taco Bell Cantina opened in Chicago’s Wicker Park neighborhood in 2015:

Taco Bell really wanted to be in Chicago’s Wicker Park neighborhood, along Milwaukee Avenue, colloquially-known as “The Hipster Highway” due to the bike lanes and abundance of walking traffic. Corporate waited for a while before closing the deal on the space, which used to be Batteries Not Included, a sex toy shop. (Eater Chicago)

This first Taco Bell Cantina, a franchise, is located in an old narrow building with apartments above, see the exterior here. I hadn’t heard of this location before, and I prefer non-chains. More locations are now open in Chicago and in other cities. One new Chicago location is just 2 blocks from where we stay while in Chicago, so early next year we’ll check it out.

The closest Taco Bell to downtown is t Broadway & Chouteau, a typical suburban model. Downtown lacks a Mexican restaurant, though Downtown West has a couple. Not sure if a franchise owner in our region will e interested in downtown, Grand Center near Saint Louis University, Delmar Loop, or maybe Clayton?   Would they dare open up on Cherokee?

Of course, this could hurt locally-owned Mexican restaurants in areas too urban for a typical Taco Bell. Taco Bell is part of Yum! Brands — KFC & Pizza Hut are corporate cousins — maybe these will also develop an urban model? Expect other chains to also look to urban areas for growth — adding new suburban locations is no longer a viable strategy.

— Steve Patterson

 

Panera’s St. Louis Beginnings Not Part Of Narrative, Sold To European Investment Firm

April 10, 2017 Featured, Retail Comments Off on Panera’s St. Louis Beginnings Not Part Of Narrative, Sold To European Investment Firm
Panera Bread, Carbondale IL

Last week we learned that Panera is being sold to a German European investment firm:

JAB Holding Co., the owner of Caribou Coffee and Krispy Kreme Doughnuts, said Wednesday that it would buy Sunset Hills-based Panera Bread Co. in a deal valued at about $7.5 billion, including debt, as it expands its coffee and breakfast empire.

Unlike other St. Louis-based companies that have been bought up, there were no financial struggles indicating a sale was coming, no succession questions, no negotiation drama. Panera’s sale came out of the blue, even to analysts who follow the industry. (Post-Dispatch)

Panera locations locally are called St. Louis Bread Company, the name used on the Kirkwood location opened in 1987.  As I said in a recent post, Panera CEO Ron Shaich is from Boston — and he continues to live there.

Nationally Panera’s connection to St. Louis isn’t mentioned at all:

Ron Shaich, Panera’s personable chief executive who controls roughly 15 percent of its stock, said one of the biggest attractions to the JAB deal was the chance to take his company private.

“For the last 20 years, I’ve spent 20 percent of my time telling people what we’ve done to grow and another 20 percent of my time telling people what we’re going to do to grow,” Mr. Shaich said in an interview. “I won’t have to do that anymore.”

Investment analysts have speculated for years that Mr. Shaich, 63, has been looking for a way to reduce his role at the company after spending more than two decades building it up from a tiny 400-square foot cookie store in Boston. (New York Times)

The original creator of St. Louis Bread Co., Ken Rosenthal, sold out back in 1993 — his small chain is not part of Panera’s narrative. To be fair, it is mentioned in their history:

The Panera Bread® legacy began in 1981 as Au Bon Pain Co., Inc. Founded by Louis Kane and Ron Shaich, the company prospered along the east coast of the United States and internationally throughout the 1980s and 1990s and became the dominant operator within the bakery-cafe category.

In 1993, Au Bon Pain Co., Inc. purchased Saint Louis Bread Company®, a chain of 20 bakery-cafes located in the St. Louis area.

The company then managed a comprehensive re-staging of Saint Louis Bread Co. Between 1993 and 1997 average unit volumes increased by 75%. Ultimately the concept’s name was changed to Panera Bread.

By 1997, it was clear that Panera Bread had the potential to become one of the leading brands in the nation. In order for Panera Bread to reach its potential, it would require all of the company’s financial and management resources. (Panera)

When the deal closes in the 2nd half of this year, Panera will be a subsidiary of JAB Holdings. The good news is other JAB subsidiaries appear to keep their headquarters where they were when purchased.

— Steve Patterson

 

Grocery Delivery: Easy & Convenient…But Costly

March 6, 2017 Featured, Retail Comments Off on Grocery Delivery: Easy & Convenient…But Costly

The local grocery market is once again changing. Last week I decided to have groceries delivered to try out Instacart, now available in St. Louis.

From late January:

Maryland Heights-based Schnucks is among several retailers partnering with Instacart to offer online ordering and delivery beginning Feb. 16. Other retailers that will begin offering delivery through Instacart locally next month are Straub’s, Shop ’n Save, Whole Foods Market, Costco and Petco, Instacart spokeswoman Rebecca Silliman told the Post-Dispatch on Friday.

Based in San Francisco, rapidly growing Instacart provides delivery service for retailers across the country in 30 markets. It just expanded grocery delivery in Virginia Beach and plans to launch in Nashville soon. Instacart plans to hire at least 50 people in the St. Louis area, Silliman said.

Beginning next month, customers can access Schnucks Delivers’ new service online at Schnucksdelivers.com. Instacart will provide the software, shoppers and drivers. (Post-Dispatch)

I decided to go directly through Instacart, rather than Schnucks’ website — even though I was ordering from Schnucks. I also browsed the selection from Shop-n-Save, Straub’s, & Costco — we sometimes make a Shop-n-Save run and we always go to Costco once per month.  Those who aren’t Costco members can still have items delivered from them.

We needed bread and some produce but I decided I’d get the produce in person the next day. So my order was bread and three other items we’ll eventually eat — just enough to exceed $10.

These 4 items had a subtotal of $10.76. Sales tax was 69 cents for a store total of $11.45

I posted to my personal Facebook wall and a friend from grad school, now living in Chicago, said she loves Instacart, adding:

80%+ of what enters my house is delivered…..going to the store w/2 children in this town is literally insane. Happy to pay the delivery fee rather than spend 2 hours in traffic!!

I can see how a parent of two children might be willing to pay extra for delivery, but let’s look at the cost.

Instacart adds a 10% service fee onto the product subtotal, plus I tipped the delivery person $2. So my “free” delivery cost me $3.08 — 27% above what I would have paid id I’d gone to the store myself.

For my first free order the minimum was only $10, but the regular delivery rate is less for orders of at least $35.

Examples:

  • Orders less than $35, delivered within the hour: $11.99
  • Orders less than $35, delivered in 2 hours or more: $9.99
  • Orders $35 or more, delivered within the hour: $7.99
  • Orders $35 or more, delivered in 2 hours or more: $5.99

For $149 per year (or $14.99/month) you can get free delivery.

PROS

  • Fast & convenient
  • Easy to use website & smartphone app
  • Sale items appear on website/apps

CONS

  • Adds 25%+ to grocery cost
  • Four items arrived in 3 plastic bags
I use reusable bags, so having four items arrive in three bags was hard to accept. Not sure if this was the cashier or delivery person.

I do think grocery delivery will increase, but still be an expensive niche for a while. I invite you to try the service to see what you think. I got a link that will provide you with free delivery plus a $10 credit, click here.  Disclosure: I also get $10 for the first 5 who order using the link. Be sure to tip the delivery person online or in cash because Instacart keeps changing (lowering) their pay.

— Steve Patterson

 

Readers: Retain St. Louis Bread Company Name On Local Panera Bread Locations

March 1, 2017 Featured, Retail Comments Off on Readers: Retain St. Louis Bread Company Name On Local Panera Bread Locations

My husband and I use the Panera Bread name to describe both St. Louis Bread Co & Panera locations. The Panera Bread locations in the immediate St. Louis area are known as St. Louis Bread Company.

St. Louis Bread Co on Chippewa

Get an hour from downtown and they become Panera Bread.  As I mentioned in the Sunday Poll, when I worked in Kirkwood (2000-2004) we often got lunch from the original location, but by that point the original founder was ;png out of the picture.

St. Louis Bread was founded by Ken Rosenthal in 1987 when he opened the first location in Kirkwood, Missouri. In 1993, Au Bon Pain Co. purchased the St. Louis Bread Company. In 1997, Au Bon Pain changed the company name to Panera Bread, a made-up name combining the Italian words pane (bread) and era (time)—time of bread. At the same time, the St. Louis Bread Company was renovating its 20 bakery-cafés in the St. Louis area.

In May 1999, to expand Panera Bread into a national restaurant, Au Bon Pain Co. sold its other chains, including Au Bon Pain, which is now owned by Compass Group North America. Panera Bread moved into its new headquarters in Richmond Heights, Missouri in 2000. The company operates or franchises more than 1900 Panera Bread bakery-cafés in 46 states and 20 facilities that deliver fresh dough to the bakery-cafés every day. Panera Bread’s CEO is Ron Shaich.

Panera’s headquarters are in the St. Louis suburb of Sunset Hills. You might think CEO Shaich lives in a tony St. Louis suburb like Ladue…but you’d only be partially correct. He does live in a wealthy suburb — outside of Boston. To his credit, he’s kept the headquarters here for more than two decades. Executives that run the day-to-day business do live here. Panera stock is publicly traded.

More than half of you think the local name should remain St. Louis Bread Company:

Q: Agree or disagree: St. Louis Bread Co locations should go by the name Panera (the name used in the rest of the country?

  • Strongly agree 2 [3.77%]
  • Agree 4 [7.55%]
  • Somewhat agree 3 [5.66%]
  • Neither agree or disagree 7 [13.21%]
  • Somewhat disagree 3 [5.66%]
  • Disagree 10 [18.87%]
  • Strongly disagree 24 [45.28%]
  • Unsure/No Answer 0 [0%]

I somewhat think they should just all become Panera Bread. Most of the packaging, cups, etc are already the same. The main different is the name on the outside of the building.  I’m not advocating for a change, I just won’t be surprised or upset if they decide to do so in the future.

— Steve Patterson

 

Opinion: Sales Taxes Outdated In 21st Century

February 15, 2017 Featured, Retail, Taxes Comments Off on Opinion: Sales Taxes Outdated In 21st Century

We order stuff online frequently because it’s convenient to do so, not because we want to save on taxes. Often we’ll order from target.com so we pay the same tax rate we do when we shop at Hampton Village location once per month.  Amazon is the bulk of our online shopping so now we’ll pay 4.225% for Missouri sales tax. Fine.

There are lots of online retailers out there, from 2013:

Using figures from a variety of sources, including Internet Retailer’s Top 500 Guide for 2013 and data from the U.S. Census Bureau, ReferralCandy determined that there are 102,728 e-commerce retailers in the United States that are generating at least $12,000 per year in revenue. That’s a 13.5 percent increase over last year’s findings, which revealed 90,501 online retailers generating the same amount.

Other findings from the study include:

  • 61,728 online retailers generate at least $25k in revenue (up 12.8 percent from the year before)
  • 38,157 e-commerce merchants generate at least $50k in revenue (up 12.3 percent from the year before)
  • 23,587 online merchants generate at least $100k in revenue (up 13.6% from the previous year) (Forbes)

So over 100k retailers should register with every state to be able to collect and report sales taxes?  I looked at three retailers located on Cherokee Street to see how they handle sales taxes on their online shops — they ship to every state:

Firecracker Press

  • Collects 8.7% Missouri & St. Louis sales tax on orders shipped to Missouri customers.
  • Doesn’t collect sales taxes shipped outside Missouri.

Spoked Bikes & Stuff

  • Doesn’t appear to collect sales taxes on any online order, though a tax line appears in the cart.

STL-Style

  • Doesn’t appear to collect sales taxes on any online order, no sales tax line appeared .

More than half of those who voted in the recent non-scientific Sunday Poll support online retailers collecting state sales taxes:

Q:  Agree or disagree: Online retailers, without brick & mortar stores in a state, shouldn’t collect sales taxes in that state.

  • Strongly agree 6 [14.63%]
  • Agree 5 [12.2%]
  • Somewhat agree 1 [2.44%]
  • Neither agree or disagree 1 [2.44%]
  • Somewhat disagree 3 [7.32%]
  • Disagree 9 [21.95%]
  • Strongly disagree 15 [36.59%]
  • Unsure/No Answer 1 [2.44%]

Oh, I bet many thought I was talking only about Amazon. Where is the line drawn in the sand? Is it based on sales shipped to each state? If so, the three small retailers on Cherokee would need to keep track of sales to each state and then begin collecting state sales taxes only when their sales to that state have crossed the threshold?

We pay taxes to receive services from the government(s). How governments collect revenue varies widely, not all collect sales tax:

In 2013, sales and gross receipt taxes nationwide totaled $254.7 billion — a 3.9% increase from the year before — which means Americans spent an average of $806 on sales taxes last year. That’s less than the $309.6 billion, or $979 per American, spent on state income taxes. However, including selective sales taxes, which are levied on goods like gas and cigarettes, Americans actually pay more in sales taxes than they do in state income taxes.

Sales taxes vary widely from state to state. Some states charge no sales tax, while some localities charges as much as 10% when state and local sales taxes are combined. Tennessee, on average, has the highest sales tax at 9.44%.

There are four states with no sales tax: Delaware, Montana, Oregon, and New Hampshire. A fifth, Alaska, has no state-level sales tax but allows municipalities to impose the retail-level tax. As a result, the average sales tax rate in Alaska is 1.69%. 

While 10% of U.S. states impose no sales tax, a much smaller percentage of the population lives in one of these states — only about 2.5%. (Motley Fool)

Let’s not forget the complex sales tax pool in St. Louis County.

I think it may be time to admit sales taxes as a revenue source is outdated by current technology & shopping trends. I’m not suggesting we need lower taxes — but that we need to find a better way to fund local & state government services.

— Steve Patterson

 

Advertisement



FACEBOOK POSTS

Archives

Categories

Advertisement


Subscribe