Monday, August 21, 2017 TOO MANY SUPERMARKETS TOO???

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TOO MANY SUPERMARKETS TOO???

STUDY SAYS FUTURE IS DIM Last week, a 3-store supermarket chain in Charlotte,

Healthy Home Market, put itself up for sale. Earlier this year, a chain in Wisconsin closed its doors, another there sold locations, and we've also seen bankruptcies from Marsh and Central Grocers in the Midwest.

We've seen massive closings of department stores and specialty stores so far this year, and also many restaurant chains (most recently Applebee's) closing dozens of locations. Studies have suggested there are simply too many department stores and restaurants to serve the population that patronizes those businesses. But now a study from Inmar Willard Bishop Analytics says the exact same problem is taking place in the supermarket business, and regional grocers and especially independents are going to be hurt. The study found there were 25,280 stores offering a full-range of groceries that did at least $2 million in annual business last year, 6% fewer than in 2015. The study also predicts the number will be down to about 19,000 by 2021.

The Wall Street Journal reports commercial square footage of retail food space per capita set a record last year at 4.15 square feet per person. Much of that came from grocers expanding rapidly after the 2008 recession to fight off a growing number of competitors including club chains, dollar stores, pharmacies and even convenience stores all selling groceries--not to mention online food sales, some already offering delivery. "Everybody is getting into the grocery business," Smart & Final CEO David Hirz told the Journal. And, of course, the supermarket industry has always operated on razor-thin margins, relying on big volume to make stores profitable rather than a healthy markup on what's sold. Plus, after a few years in which same-store sales were up by about 3%, that metric was flat last year (partially due to food deflation).

Some of the bigger chains have picked up stores that go on the market such as Kroger cherry-picking some Marsh stores, and SuperValu buying Central Grocers' distribution centers in Illinois. But the net of the food business is clearly moving towards fewer stores. "The U.S. is clearly in another wave of grocery store consolidation," the managing director of the Food Group at BMO Harris Bank told the paper.

Even the food sellers considered to be healthy at this point are slowing down expansion. Walmart had planned to open 132 supercenters and smaller-format stores this fiscal year, but has cut its plans by more than half to just 55. Kroger had initially planned to open about 100 new stores; instead it will do just over 50. West Coast chain Smart & Final opened 37 last year (some from the Haagen's bankruptcy) but will settle for just 19 new stores this year.

ADVERTISER NEWS Another sporting goods retailer reported a very poor

quarter: Hibbett Sports suffered an 11.7% same-store sales drop and also took a hit in gross margin (28.9% of net sales compared to 33.0% last year) due to promotions and lower prices needed to liquidate excess and aged inventory......Foot Locker had a tough quarter also, with same-store sales down 6% and the CEO citing "the limited availability of innovative new products in the market." Comps are now expected to be down 3-4% for the rest of the year......But another off-price apparel retailer that usually

has good results did well once again. Ross Stores' same-store sales were up 4% and after expansion in the last year, total sales grew by 8%. Including dd's discounts, Ross Stores now operates 1,384 locations in 37 states......Walgreens and Rite Aid have withdrawn their initial agreement for Walgreens to buy 2,186 stores and are refiling details of that agreement, which would "reset the clock" on the waiting period to September 18. When the $5.2 billion deal was announced in June, there had been some thought the government might not approve the new deal after the initial attempt of a full buyout was not allowed......Here's something a little different in the supermarket business: Wegman's is taking over a 3-story building formerly occupied by J.C. Penney in Natick, Mass., and will use the entire first floor and half of the second floor for itself while leasing the remaining space to other tenants. The new store should open next spring......SpartanNash's food distribution business did well in the second quarter, but sales in its retail segment were down 4% due to store closures and a 1.8% decrease in comp store sales. The company operates several banners including Family Fare, Sun Mart, and Family Fresh...... With the restaurant business soft in July, none of the top ten chains based on frequency of customer visits was able to show a gain and the top two (McDonald's with an average of 2.2 visits per customer and Subway with an average of 1.8 visits) were each down. Among the very few that saw an increase over June visits were two ice cream oriented chains: Baskin- Robbins and Dairy Queen, each having a 1.4 frequency for the month......Walmart is continuing to build synergies from its acquisitions and will start to offer trendy upscale brands Bonobos and ModCloth on the jet. com platform it bought, hoping to get business from people who may not go to its stores. A company spokesman said, "The Jet customer demographic--millennial, urban, higher income--aligns well with the demographics of ModCloth and Bonobos." There

CABLENET CHATTER

ATT&T/TIME WARNER DEAL UPDATE

National Geographic goes inside Isis during a four-part

The Wall Street Journal reports the proposed AT&T

drama airing over two nights. The series will use extensive takeover of Time Warner has reached an "advanced

factual research and follow four young British men and stage" in the government's review, where AT&T lawyers are

women who leave their lives behind to join Isis in Raqqah, discussing merger conditions with the Justice Department.

Syria. The State premieres Monday September 18th and During the Presidential campaign, Donald Trump had

19th at 9:00 pm...Viceland announces their fall lineup with attacked the deal, but has remained silent on it since his

new shows and several returning favorites. Among the new inauguration. Several competitors have raised questions

shows is Epicly Later'd, a documentary series about the about how the deal could impact them, such as Starz and

skater world, premiering Wednesday, September 6th at Dish Network. The former has warned that AT&T could

10:00pm. Debuting Wednesday, November 1st at 10:00 pm favor HBO in the way its sets prices for premium channels,

is The Trixie And Katya Show, a mashup of daytime, late- and Dish Network is afraid of its satellite competitor

night and advice shows. Following that at

DirecTV having too much leverage. The

10:30 pm is Most Expensivest, hosted by

Journal notes several state attorneys

Grammy winning hip-hop artist 2 Chainz. As the titles implies it's about the culture of excess. Returning shows are Bong Appetit, Weediquette, Cyberwar and

Hillary Clinton is coming out with a book called "What

Happened." Out of habit, Bill Clinton immediately came

general have also been looking into the proposed deal with similar concerns.

HOW'S BUSINESS?

Pharmacopeia...Discovery will crank out with his own book called

UBS reports July '17 ad growth was

up a new series devoted to car fanatics

"Baby, I Can Explain."

+9% year-to-year, and while digital's

and auto mechanics (known as "Dogs"),

share of the gains remained elevated,

hence the title Gear Dogs. It's centered around custom car builder Nate Boyer and

Conan O'Brien

less of the increases were coming from television. National TV was said to be

his shop Kultured Kustoms, which he'll

up 1%, a slight acceleration from June.

expand with The Doghouse, a community

Nine of the top ten categories were up

garage open to fellow gearheads and hobbyists who will use during the month, led by Media, Consumer Electronics

his space, equipment and expertise to crank out one-of-a- and Telecom, but Automotive was down 5% year-to-year

kind cars. Gear Dogs will debut Monday, September 4th at in total ad expenditures. UBS believes the recent softness

10:00 pm ... MTV announced actor Terrence J. will host the in national TV is "more cyclical than secular," due to

new season of the popular matchmaking series, Are You tough comparisons with last year which had more product

The One? premiering Wednesday, September 20th at 10:00 launches than have occurred so far this year. Additionally

p.m. This season will take the contestants to New Orleans it sees "weakness in the retail and auto categories

where they will strive to find their "perfect match" for a share due to sector-specific deteriorating operating trends."

in a million dollar prize. Before the premiere, audiences can

get a sneak peek of the new cast in an audition tape casting special, airing Wednesday, September 13th at 10:00 p.m ...FX continues to pick up the big box office movies, most of them the biggest grossing movies of 2017. The latest acquisitions include: Spider Man: Homecoming ($309.8M box office to date), Despicable Me 3 ($249.7 M), Logan ($226.3 M), The Fate Of The Furious ($225.8 M), Get Out ($175.5 M), The Boss Baby ($174.9 M), War For The Planet Of The Apes ($138.9 million, Split ($138.1 M), Baby Driver ($100.8 M), Girls Trip ($100.1 M), The Mummy ($80.1 M), Alien: Covenant ($74.2 M), Captain Underpants: The First Epic Movie ($73.2 M), The Emoji Movie ($67.4 M), Atomic Blonde ($45 M), Snatched ($45.9 M) and The Dark Tower ($37.9 M)......truTV announces a

ECONOMIC NEWS The economy is already doing well, but the July report

of Leading Economic Indicators from The Conference Board says conditions are likely to get even better. After gains of 0.3 points in May and 0.6 in June, the July study rose another 0.3 points. "The U.S. LEI improved in July, suggesting the U.S. economy may experience further improvements in economic activity in the second half of the year," the Director of Business Cycles for the Conference Board said. "The large negative contribution from housing permits, a reversal from June, was more than offset by gains in the financial indicators, new orders,

and sentiment."

second season for the scripted comedy I'm Sorry, created by and starring Andrea Savage as a comedy writer, wife and mom. The season one finale is set for Wednesday, September 6th at 10:00 pm, and a season one wrapup marathon will begin at 2:00 pm Monday September 4th... A&E has commissioned Cultureshock, an eight episode original documentary series produced by award winning filmmaker Morgan Spurlock to look at major moments in our culture that impacted our pop culture. The series will premiere in 2018 and look at the rise of Chris Rock, feature a profile of the cult classic TV show Freaks And Geeks, and look at tabloid talk shows like Jerry Springer and Geraldo and how it laid the groundwork for today's reality shows.

COMPETITIVE INFO: BUZZFEED Even NBC/Universal likes Buzzfeed; the company

invested $400M in the social news and internet firm in the past two years. Watch for Buzzfeed to try to compete with TV and cable for ad dollars soon - very soon - with programming like Worth It. The show features 2 pals comparing meals at high-end restaurants with cheap alternatives (like a $5 hamburger verses a $500 dollar burger).

notes that the episodes, which run 12 to 16 minutes, can generate 10 million views on YouTube. In fact, the 19 episodes of Worth It that have been posted have accumulated over 280 million views on YouTube and nearly 2 billion minutes of watch time. A 10-episode third

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season is set to premiere this coming Sunday.



Monday, August 21, 2017

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