RE: [CANSLIM] Too Much Building

From: "Duke Miller" <dukemill@tampabay.rr.com>
Subject: RE: [CANSLIM] Too Much Building
Date: Mon, 15 Jul 2002 10:50:06 -0400
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I have long history with McDonald's (ad agency), and it seems others
aren't willing to learn from them or are just wearing blinders. I'll
explain may take:

First, you must understand the parent company is in the real estate
business NOT the food business!  Are they saturated?  I grew up in a dry
county, and in my home town there was an expression I can recall that
defined not only the city, but also saturation:  "We got more Baptist
churches than we do filling stations."  That all changed in the late
60's when the county went wet!  But I digress.  I think we now have
almost as many McDonald's as we do filling stations.  And the franchisee
owns everything but the land; Ronald McDonald owns all the land under
them golden arches.  

The saturation isn't new: There have been numerous protests filed by
operators regarding the Corporation's dilution of trading areas by
adding new stores in close proximity to others.  

The net:  McDonald's is ailing domestically because they killed the
goose that laid the golden egg...and I think, in part, the culprit is
saturation.  That's not their only problem (and this is relevant to this
thread): They've tried to squeeze out profits by streamlining food
preparation (less fresh and fewer employees) at the expense of customer
satisfaction.  Applebee's, et al, have further compounded McDonald's
problem by offering families four simple things: value, better food,
cleanliness (have you been in a McDonald's john lately?), and service. 

Simple, isn't it?  

As for Starbucks, once they reach saturation, you watch.  They'll then
put the squeeze on to milk (cream?) earnings out of the cash cow.  And
so on...

Duke

- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com] On Behalf Of Kelly Short
Sent: Monday, July 15, 2002 10:11 AM
To: canslim@lists.xmission.com
Subject: RE: [CANSLIM] Too Much Building


While we're on the topic of too many locations- how about Starbucks! I
have 4 within a 2 radius. Two are a stone's throw from each other- the
other two are a full nine iron from each other. How do they define
saturation? (and some pretext- I live in Ft. Worth, TX. Not exactly NY
population density!)

- -----Original Message-----
From: Kent Norman [mailto:kent_norman@yahoo.com]
Sent: Sunday, July 14, 2002 11:48 AM
To: canslim@lists.xmission.com
Subject: Re: [CANSLIM] Too Much Building


Does anyone remember the apartment building boom? I think it was in the
late '80s ? I remember driving past one project after another, Several
friends made the same comment to the effect of "I can't see why they are
still building when the can't fill the ones they already have". Then I
watched as several projects were boarded up and it took about 10 years
for the demand to catch up.  

Now In the Dallas/Fort Worth area, we have a Wallgreens and Eckerd on
opposite corners similar to the way gas stations once were. Home Depot
and Lowes are playing a similar game. I have 3 HDs and 2 Lowes within
about a 6 mile radius. I went to the Lowes last night that is further
from my house just because it has fewer shoppers at the checkouts and I
don't have to wait in line.

Regards
Kent Norman


- --- Tom Worley <stkguru@bellsouth.net> wrote:
> I can comment on Miami (FL). Construction is still vibrant, even with 
> unemployment over the national average. Roads continue to be ripped 
> up, and already congested traffic further disrupted, as more and more 
> fiber optic cable continues to be laid. A Home Depot is being built 
> only about 4 miles from my home, will save me the longer trip to one 
> about 9 miles or so away. Location seems to me ideal, lots of 
> apartment and high value residential properties nearby.
> 
> ----- Original Message -----
> From: Alicia Lensing 
> To: canslim@lists.xmission.com 
> Sent: Sunday, July 14, 2002 11:04 AM
> Subject: Re: [CANSLIM] Too Much Building
> 
> 
> Gene:
> 
> I, too, notice this in Dallas,  and thought perhaps it was in part due

> to the ravages of the telecom corridor in Richardson.  However, just 
> last evening, we entertained a guest from Miami, as well as one from 
> NYC, and the subject of consumer spending arose.  I feel like the 
> situation you mention is not confined to Dallas.  Perhaps all the 
> refinane money has been spent, and shoppers are pulling in the reins.
> 
> Alicia
>   ----- Original Message ----- 
>   From: Gene Ricci 
>   To: canslim@lists.xmission.com 
>   Sent: Saturday, July 13, 2002 9:52 PM
>   Subject: [CANSLIM] Too Much Building
> 
> 
>   I've been looking around the Dallas area and all I see is opening of

> new stores and malls. Of course the old ones are empty. An example is 
> COSTCO.... they have 2 stores about 7 miles apart and virtually brand 
> new... both have more help than customers. Looks like to thirst for 
> market share hasn't taken a back seat to profits. This 'glut' reminds 
> of the gas station on every corner, not too long ago. Is it just 
> Dallas or is this happening all over?
> 
>   Gene
> 


=====
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