I have become obsessed with the realization that chain store operators are leaving billions of dollars of sales on the table by failing to properly train and develop their talent in the real estate teams (total sales of US retail establishments is around $4 trillion according to the 2007 Economic Censuspublished in 2009).
Why is this? Laziness? Ignorance? I don’t think so. Some of the most clever AND street-wise people I’ve ever met are senior executives in chain store companies. I think that the training challenge is relatively new and requires adapting to new market conditions. It’s the natural evolution of the chain store business. Sears built an empire with selection (“Sears Has Everything”). Wal-Mart revolutionized retailing with their supply chain management. Apple has seemingly cornered the market on “cool” and “easy.” Here are some of the driving factors that have increased the priority of training from low-moderate to high: Continue reading →
We have some preliminary information about the state of training for analysts based on several different types of chain store operators: apparel retailer, casual dining restaurant, shopping center developer, and a quick serve restaurant. Continue reading →
Ray Kroc once said, “If we are going to go anywhere, we’ve got to have talent. And, I’m going to put my money in talent.” McDonald’s Hamburger University graduates about 5,000 people per year.
Benjamin Franklin said, “If a man empties his purse into his head, no man can take it away from him. An investment in knowledge always pays the best interest.”
Training is recognized as essential in many areas of chain store operations. The National Restaurant Association conducted its one millionth training class last month. The NRA has been running its ServSafe Food Safety, ServSafe Alcohol, ProStart curriculum, ManageFirst, and other programs for the last 25 years. (http://www.restaurant.org/pressroom/pressrelease/?ID=2137). Continue reading →
I have had the good fortune to get a close up view of many chain store operators in action over the past 20 years. It’s amazing to see the wide variety of approaches used to find, open, relocate, and sometimes close stores. There are many different org charts and reporting structures that sometimes place the real estate function directly below the CEO and in other cases reporting to the CFO or VP Marketing. There are Real Estate Research Directors who have large staffs and tight controls over deal approval as well as companies who give the dealmakers responsibility for research. Continue reading →
Not too many years ago, chain store real estate was almost entirely a “people” business. The ICSC was the formal organization that provided regular gatherings among landlords, tenants, brokers, and all the other suppliers to the shopping center/chain store industry. “Going to Vegas” has become an annual pilgrimage for dealmakers since 1986 (the first convention was held in New York in 1958). The telephone and the automobile were the primary research tools. The research department was often located at one of the many bars, restaurants, coffee shops, and golf courses across the country. Continue reading →
All of us in the chain store industry would love to believe that we are making better real estate decisions today than before we had digitial maps, demographic data, and predictive models. There is no question that some companies have reduced capital losses from store closings and increased profitability of their stores with these tools. Continue reading →