Yo, Winston-Salem Folks Interested in Trader Joe’s

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All you folks who got together to create the video aimed at convincing Trader Joe's to open a store in Winston-Salem will probably find this Fortune article interesting.  I for one didn't know that the same German family that owns Trader Joe's also owns Aldi.  From the article:

You'd think Trader Joe's would be eager to trumpet its success, but management is obsessively secretive. There are no signs with the company's name or logo at headquarters in Monrovia, about 25 miles east of downtown Los Angeles. Few customers realize the chain is owned by Germany's ultra-private Albrecht family, the people behind the Aldi Nord supermarket empire. (A different branch of the family controls Aldi Süd, parent of the U.S. Aldi grocery chain.) Famous in Germany for not talking to the press, the Albrechts have passed their tightlipped ways on to their U.S. business: Trader Joe's and its CEO, Dan Bane, declined repeated requests to speak to Fortune, and the company has never participated in a major story about its business operations.

Some of that may be because Trader Joe's business tactics are often very much at odds with its image as the funky shop around the corner that sources its wares from local farms and food artisans. Sometimes it does, but big, well-known companies also make many of Trader Joe's products. Those Trader Joe's pita chips? Made by Stacy's, a division of PepsiCo's (PEP, Fortune 500) Frito-Lay. On the East Coast much of its yogurt is supplied by Danone's Stonyfield Farm. And finicky foodies probably don't like to think about how Trader Joe's scale enables the chain to sell a pound of organic lemons for $2.

I love this quote about the "typical" Trader Joe's shopper:

Kevin Kelley, whose consulting firm Shook Kelley has researched Trader Joe's for its competitors, jokes that the typical shopper is the "Volvo-driving professor who could be CEO of a Fortune 100 company if he could get over his capitalist angst."

Can we say Ardmore and West End?

I Keep Telling Myself It’ll Grow Back

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 Last night will go down as one of the more unique experiences of my life.  As I've written before (probably ad nauseum) the Triad Apartment Association holds a food drive for Second Harvest Food Bank of Northwest North Carolina each year and at the end of the drive we have an event to recognize the organizations that raised the most food.  Last night we held the event on the rooftop deck of the Nissen Building in Winston-Salem and, as promised, I had my head shaved as part of our fundraising efforts.  We threw in a last minute twist and allowed anyone who wanted to shave a stripe in my head to do so if they contributed $20 to Second Harvest.  That resulted in $140 in additional donations, which equates to about 980 meals or 1,680 cans of food.

I have to say that there's something surreal about having your head shaved in front of 50 people on a roof twenty floors up in downtown Winston-Salem.  It was definitely worth it, and for the record here's the final tally for TAA's efforts: 223,682 cans of food (or cash equivalent) donated to Second Harvest.

That's the good news, but here's the bad news: although donations are up over 50% since last year, need for assistance is up over 100%. We could have raised 500,000 cans and it wouldn't even put a dent in the need, which means it's never too late to help.  To find out how you can help visit Second Harvest's website; I guarantee you won't regret it. 

A ton of people and multiple companies made the food drive possible and if I tried to thank them all here I'd have the longest blog post in the history of blogging.  We'll be recognizing them all at the TAA website and I'll make sure to link to it when we do.

Special shout out to my barber David Sowers of Lewisville Barber Shop for making the trip downtown and making sure that my head came out unscathed.

In a Land of Dropout Factories, Batting .500 is an Achievement

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A very interesting article about US colleges that are "dropout factories."  An excerpt:

Certainly, Chicago State enrolls a large share of academically underprepared students compared to more selective schools such as UIC or Northwestern, so its graduation rate might be expected to be lower. But the idea that Chicago State is doing the best it can with the kind of students it serves is belied by ample countervailing evidence. As the chart below shows, there are more than half a dozen schools in the United States with student bodies that are remarkably similar to that of Chicago State in every important respect—from race to test scores to family income—but whose graduation rates are at least double, and in some cases more than triple, the graduation rate of Chicago State.

Take North Carolina Central University, which enrolls 8,500 students. About 85 percent of students at both schools are black. NCCU’s median SAT score is 840, the approximate equivalent of about 17 on the ACT, even lower than Chicago State’s average ACT of 18. The difference, however, is that NCCU tries to work with the students it has. The result: while Chicago State graduates about 13 percent of its students, NCCU graduates about 50 percent. “We have the philosophy that if we admit the students into this institution we have a great responsibility in ensuring their success,” says Bernice Duffy Johnson, dean of the school’s University College, which focuses on supporting students during their first two years.

Students entering NCCU are told from the start that they are expected to have a goal of graduating in four years. The University College keeps students together in groups and assigns them advisers who must approve all major academic decisions and meet with students frequently. NCCU students even sign a contract upon arriving, a document that lays out the goals of what they are going to accomplish. If they start to struggle, they sign an additional contract that commits them to even closer monitoring. Above all, what drives places like NCCU is a culture of experimentation and data collection. The administrators track students, and they track results. If something works, they keep doing it. If it doesn’t, they try something else. 

Seth on Publishing

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I pretty much agree on Seth Godin's assessment of the current state of the publishing industry:

Traditional book publishers use techniques perfected a hundred years ago to help authors reach unknown readers, using a stable technology (books) and an antique and expensive distribution system.

The thing is–now I know who my readers are. Adding layers or faux scarcity doesn't help me or you. As the medium changes, publishers are on the defensive…. I honestly can't think of a single traditional book publisher who has led the development of a successful marketplace/marketing innovation in the last decade. The question asked by the corporate suits always seems to be, "how is this change in the marketplace going to hurt our core business?" To be succinct: I'm not sure that I serve my audience (you) by worrying about how a new approach is going to help or hurt Barnes & Noble.

My audience does things like buy five or ten copies at a time and distribute them to friends and co-workers. They (you) forward blog posts and PDFs. They join online discussion forums. None of these things are supported by the core of the current corporate publishing model.

Saved

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Driving home from work on 421 on Friday I saw a guy in an Escalade get cut off by another guy in a Honda. On a scale of 1-10 in crappy driving I’d say the move was a 4, but the guy in the Escalade acted as if the other guy had stolen his man-purse. He tailgated him for a couple of miles and then pulled up next to him and made all kinds of interesting gestures. The guy in the Honda remained blissfully ignorant, or at least he did a great job ignoring the dude in the Escalade.

Eventually they both passed me and I got to see the license plate on the Escalade. It read “Am Saved.”

The HIDC

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Is home ownership the American dream or the American nightmare?  (No this isn't another post about my family's homeownership woes.  One can only write so much about buying and living in a lemon).  David Stockman writes about the "Housing Investment & Debt Complex" and posits that we should pull the plug on the government's program of homeowner subsidies. What he proposes, letting all those homeowners go belly up and making the financiers realize losses on all those loans, will never happen but it's fun to think about in a makes-you-sick-to-your-stomach kind of way:

Before Richard Nixon initiated the era of Republican “me-too” Big Government in the early 1970s — including his massive expansion of subsidized housing programs — there was about $475 billion of real estate mortgage debt outstanding, representing a little more than 47% of GDP.

Had sound risk management and financial rectitude, as it had come to be defined under the relatively relaxed standards of post-war America, remained in tact, mortgage debt today would be about $7 trillion at the pre-Nixon GDP ratio. In fact, at $14 trillion or 100% of GDP the current figure is double that, implying that American real estate owners have been induced to shoulder an incremental mortgage burden that amounts to nearly half the nation’s current economic output…

At the end of the day there are upward of 15-20 million American households that can't afford their current mortgages or will be strongly disinclined to service them once housing prices take their next — and unpreventable — leg down. But Pimco’s gold-coast socialism is exactly the wrong answer. Rather than having their mortgages modified or forgiven, these households should be foreclosed upon, and the sooner the better. In that event, there's absolutely no danger that impacted families will go without shelter. The supply of rental units is swelling by the day and rental rates will come down further as speculators buy up REO and recycle back to the rental market.

Stated differently, pulling the plug on HIDC will rescue millions of households from mortgage-payment slavery and put them into a buyer's market for rented-housing services — a social welfare gain under present circumstances. To be sure, they'll loose their credit and probably their credit cards in the process. But the days of living off the housing ATM and bank-issued plastic are over for the American people anyway. Creating an honest financial environment where households are required to rebuild their balance sheets and consume within their means isn't a disservice or injustice to anyone. 

Likewise, millions of additional families that can, in fact, service their mortgages or that own their homes debt-free will face a further shrinkage of their paper wealth. The $16.5 trillion of household real estate value reported by the Fed in its Flow of Funds for the first quarter of this year was already down about 30% from the 2006 peak, and could readily decline by another 20%. But would the implied $3 trillion loss of paper wealth be avoidable in any event? 

Found via Fec