Day: August 11, 2016

Amazon’s not out to replace UPS and other shippers — it’s goal is more ‘fantastical’

The big Louisville-area employer wants to add as much capacity to its operations as possible, says New York Times technology columnist Farad Manjoo. “And rather than replace partners like UPS and FedEx,” he says in a new column, “it’s spending boatloads on planes, trucks, crowdsourcing and other novel delivery services to add to its overall capacity and efficiency.” Manjoo continues:

Prime Air logoAmazon’s longer-term goal is more fantastical — and, if it succeeds, potentially transformative. It wants to escape the messy vicissitudes of roads and humans. It wants to go fully autonomous, up in the sky. The company’s drone program, which many in the tech press dismissed as a marketing gimmick when CEO Jeff Bezos unveiled it on “60 Minutes” in 2013, is central to this future.

How fantastical is that future? Amazon has already filed patents for self-driving trucks as mobile shipping warehouses. Prestocked with items Amazon has determined a given neighborhood might need, the trucks could roam around cities. When an order comes in, a drone might fly from the truck to a customer’s house, delivering the item in minutes.

Amazon’s how-it-would-work video about Prime Air is funny, and instructive:

The Seattle-based retailer employs 6,000 workers at distribution centers in Jeffersonville and Shephardsville. UPS, where Amazon is a major customer, employs 22,000 workers at Louisville International Airport, making it the city’s single-biggest private employer.

As Louisville’s grocery industry shifts, bare shelves at the Highlands ValuMarket aren’t as ominous as they appear

Empty shelves 1
5:15 p.m. Tuesday, ValuMarket in the Highlands.

By Jim Hopkins
Boulevard Publisher

Updated at 3:15 p.m.

The ValuMarket at Mid-City Mall on Bardstown Road is a Highlands mainstay and one of only three traditional supermarkets in one of the city’s most affluent, foodie-centric neighborhoods. So, it’s been unsettling to see the shelves looking increasingly bare in recent days, with more discount tags than usual.

But James Neumann, whose family owns the small chain, has just assured me the store is simply being reorganized to create more aisle space around the perimeter so it’s easier to navigate with shopping carts, a redesign coming to ValuMarket’s three other locations.

ValuMarket logoAt my suggestion, Neumann said he would ask the store to post signs telling customers what’s going on.

ValuMarket’s forlorn looks come less than two months after the Neumanns announced plans to shutter the Hurstbourne Plaza outlet on Hurstbourne Parkway at Shelbyville Road. The chain gave up the lease when the shopping center’s owners decided to redevelop the site without a grocery store, according to The Courier-Journal. The Neumanns also cited “tightening economics and a shift in local shopping habits.” The Hurstbourne store, there since 1982, had been on a year-to-year lease since the 2008 financial crisis.

Supermarket profit margins are notoriously razor-thin — 1.5%, according to the FMI trade group — and shifting competition only adds pressure. Costco is opening a mammoth warehouse store near the end of this month in the 3400 block of Bardstown Road just south of the Watterson Expressway. The $300 million Omni Hotel project downtown will include a grocery store when it opens in spring 2018. Developer Kevin Cogan is planning a huge hotel-apartment complex at Grinstead and Lexington roads, with 50,000 square feet of retail space; it’s still in the very early planning stage.

Fresh ThymeFresh Thyme is already planning a second location as an anchor tenant in the proposed Bardstown Pavilion center in Fern Creek, a project city planners are reviewing; the Chicago-based chain opened its first store last spring in St. Matthews on Shelbyville Road. On the other hand, the Kroger-occupied property in SoBro was recently put up for sale, raising questions about the store’s future. And it’s anyone’s guess whether Amazon Fresh grocery delivery will ever come to the area.

In the Highlands, ValuMarket’s other chief general merchandising competitors are two Krogers, one on Goss Avenue, the other on Bardstown Road near Taylorsville Road. To be sure, there’s a Rainbow Blossom natural foods store at Gardiner Lane Shopping Center. But you won’t find Tide detergent, Kellogg’s cornflakes, and other popular consumer basics there. And Rainbow’s prices are out of reach for many young and elderly shoppers on a budget.

Winn-Dixie store
Winn-Dixie soon after mall opened in early 1960s.

ValuMarket is at least the third supermarket at the nearly 60-year-old Mid-City Mall, which this year completed a $1 million renovation of the facade that took far longer than planned, hurting tenants during the all-important holiday shopping period.

It’s unclear when the Highlands store opened, although it appears to be around 2005. The previous tenant, Buehler’s Market, lasted a year after it replaced a Winn-Dixie that closed when that chain pulled out of the Louisville market in 2004, according to Wikipedia.

After the Hurstbourne store shuttered, ValuMarket was left with just four other locations: Mount Washington; Outer Loop Plaza; Iroquois Manor and the Highlands. A sister store, First Choice Market, serves West Louisville on Wilson Avenue in Park DuValle. ValuMarket employed 450 workers when the Hurstbourne store closing was announced; about a third of them were full-time. The Hurstbourne store employed 67, according to the CJ.

Mid-City tenants took a financial hit when the mall’s renovation dragged on after asbestos was discovered in the roof, delaying completion until past the holidays. “It’s been a disaster to my tenants,” majority owner Sandy Metts told Louisville Magazine in the June issue. Metts, whose family bought the Bardstown Road property in 1976, had to reduce rent, and plans for renovating the Baxter Street side were put on are hold.

Empty shelves 2
Employees say ValuMarket’s empty shelves are due to a store redesign underway.

As stock hits record high, Schnatter leads four top execs selling thousands of Papa John’s shares

Papa John's exec trades August 2016

Lance Tucker
Tucker

Founder and CEO John Schnatter and the three other senior officers sold the shares over the past week for prices between around $76 and $77 a share, according to new Securities and Exchange Commission documents.

The trades came just as Papa John’s hit a record high of $78.09, pushing the value of Schnatter’s 10.5 million shares above $800 million for the first time.

PZZA closed this afternoon at for $75.15, up 65 cents.

John Ritchie
Ritchie

So-called insider stock sales are an important barometer of where top executives at companies think share prices are headed. But they’re an imperfect measure. Sometimes, executives sell through what’s called SEC Rule 10b5-1 plans. They allow major holders to sell a predetermined number of shares at a predetermined time, a plan often approved in advance by the board of directors to avoid insider-trading accusations.

The Papa John’s filings don’t disclose any reason for the sales, however.

Papa John’s opening 40 more outlets in Russia; judge sets Dec. 5 trial date for Humana-Aetna case, jeopardizing $1B breakup fee to HUM; and ouch: new GE beverage maker like something out of ‘Spaceballs’

A news summary focused on 10 big employers; updated 3:14 p.m.

PAPA JOHN’S said today it will open 40 restaurants in Russia over the next eight years, with the first store scheduled to open in St. Petersburg next month. Franchiser PJ Western Retail already operates more than 80 restaurants in Russia and Belarus; it’s owned by Global Restaurant Management and private equity firm Capman Russia Fund (press release). The chain opened 357 outlets last year, and now has nearly 5,000 restaurants consisting of 752 company-owned and 4,141 franchised in all 50 states and in 39 countries and territories. Beyond the U.S., the country with the single-most locations is China, with 244, as of the end of last year (annual SEC report).

In Hawaii, a Papa John’s worker is among the latest of scores of people affected by a recent hepatitis A outbreak, according to the state Department of Health. The unidentified employee worked at a restaurant in Waipahu on the island of Oahu, and brings to a total of 168 cases confirmed through yesterday. DOH investigators suspect the source of the outbreak was likely a product widely distributed primarily on Oahu (KHON-TV).

Judge John Bates
Bates

HUMANA: The federal judge hearing the Justice Department’s case to block Aetna’s $37 billion purchase of Humana has set a trial date for Dec. 5 — later than the companies had requested — and allowed 13 days for the proceedings. The date is a compromise between the two sides. During a hearing yesterday in Washington, U.S. District Judge John Bates said he was leaning toward an early November trial, but he later accepted the Justice Department’s arguments that date wouldn’t give the agency enough time to prepare. The insurers had argued for an earlier time frame, noting that the current contractual agreement between the two is subject to a Dec. 31 deadline. If the merger isn’t approved by then, Humana would have the option of walking away and potentially collecting a $1 billion breakup fee. Bates told the parties to proceed with the “expectation” that he will issue a ruling in mid-January  (Wall Street Journal and Bloomberg).

Antitrust cases are typically kept on a strict timetable set by the judge, who in this case is very efficient, said David Balto, a lawyer representing several consumer groups that oppose the insurance mega-mergers. Even though Aetna and Humana extended the deadline to close the deal by the end of this year, the litigation is likely to force them to extend the closing again (Courier-Journal). The DOJ last month sued to block the merger, arguing that it would likely raise consumer prices and stifle competition.

Bates was appointed to the bench in December 2001 by President George W. Bush (Wikipedia).

Ford Explorer Sport
Sport’s MSRP: $45,000.

FORD says professional Generation-Xers don’t always drive SUVs, but when they do they drive a Ford Explorer Sport, according to a new vehicle customer study by MaritzCX. the The vehicle has the highest percentage of Gen-X buyers of any non-luxury SUV in the United States, MaritzCX says (press release). X-ers are the spawn of the huge baby boom generation. There are no precise dates for when the group starts or ends; demographers have used birth years bracketed by the early 1960s to early 1980s (Wikipedia). Ford employs nearly 10,000 workers at truck and auto factories in Louisville; more about the automaker’s local operations.

KFC is opening a new restaurant today at Louisville International Airport, as part of an ongoing renovation of the terminal there (Courier-Journal).

TEXAS ROADHOUSE has reportedly backed out of plans to build a restaurant in the northern Chicago suburb of Mount Pleasant (Journal Online).

AMAZON‘s stock touched a new record trading high, $773.75, before easing back to a recent $771.51, up $2.95. It’s one of the Louisville area’s biggest employers, with 6,000 workers at distribution centers in Jeffersonville and Shepherdsville. More about Amazon here.

GE: The new GE Keurig Beverage Center prototype would be built right into the wall and replace basically every appliance that makes drinks, including coffee, soda, and smoothies. Wolf Appliances debuted a semi-similar mega-coffeemaker two years ago. The cost? Well over $3,000, and it didn’t even have the built-in blender.

Spaceballs posterThere’s no plan to make more Beverage Centers just yet (and no word on how much each one would cost), but Chris Bissig, GE Appliances’ manager of concept and brand development wouldn’t rule it out (CNET and Tech Insider).

CNET’s cruel conclusion: The gadget looks like something out of “Spaceballs,” the 1987 Star Wars parody starring director Mel Brooks, John Candy and Rick Moraines, featuring a character named Pizza the Hut.

Here’s a bad photo of what it looks like:

GE Beverage Center
That’s a pullout tray of Keurig cups is in the foreground.