Ellison Chair in International Floriculture
Ellison Chair in International FloricultureTeaching, Research, Extension and Service

Nine Olympic-sized Hurdles For February Retail SSS

by

From Bill Kirk of Weather Trends International:

There is a growing avalanche of bad news for overall February 2010 retail industry same-store-sales. Results are announced March 4th – here are 10 reasons why they will likely come in much lower than the +2% to +3% expectations on Wall Street:

1. Snowmageddon! February national snowfall will be off the chart and likely to crush all records for the snowiest February in 115 years. It’s tough to convince consumers to make Spring purchases when snow is all we see. THIS IS A BIG NEGATIVE!

2. The most highly correlated external factor to overall retail industry same-store-sales (SSS) is SNOW with an 84% correlation toward LESS being more favorable for higher SSS. Over the past 30 years, a snowier February results in lower than expected SSS for 82% of cases. THIS IS A BIG NEGATIVE!

3. A cold/wet/snowy February average SSS are +1.3% over the past 30 year’s vs a warm/dry/little snow February which brings much higher SSS of +6.7%. THIS IS A BIG NEGATIVE!

4. There were 21 days this February with significantly more snow than last year and the most snow before Valentine’s and President’s Day in decades. Nearly 70% of the country was covered in snow (49 of 50 states) prior to Valentine’s Day – the most on record. THIS IS A BIG NEGATIVE!

5. The Consumer Confidence Index is the 2nd most correlated external factor to retail industry SSS at 73%. While February consumer confidence came in at 46, much lower than the 55 predicted, it is down from the 56 in January. 90 is considered a good economy. THIS IS A BIG NEGATIVE!

6. The next most correlated factor is temperature (46%) with warmer being better. February 2010 is on pace to be the coldest since the 1970s (30+ years) with a 5.2F drop from last year. Every 1F colder can cost retailers up to 0.7% in lost sales. THIS IS A BIG NEGATIVE!

7. A stronger than expected January (we had that in 2010 with the +3% gain) is followed by a weaker than expected February in 63% of cases over the past 30 years. THIS IS A NEGATIVE!

8. Unemployment is at +9.7% this February vs +8.1% a year ago. THIS IS A NEGATIVE!

9. Gasoline prices are up +39% vs a year ago at $2.66 a gallon vs $1.91 gallon. THIS IS A NEGATIVE.

10. THE ONE BIG POSITIVE? Very easy comparisons to last year February SSS results which were the worst in 30 years at -4.3% according to data from ICSC. If it wasn’t for this easy comp, February 2010 would be a complete disaster; even with the easy comp results are likely to be much lower than expected!

Stay tuned for the March 4 report to see how WTI’s forecast comes out.

Seeley Conference to Highlight Environmental Footprint

by

Here is the official news release that went out this week regarding this year’s Seeley Conference:

The 25th annual Seeley conference will be held June 26-29, 2010 in Ithaca, NY. The theme this year will be: Floriculture’s Environmental Footprint: An Inconvenient Truth or Consumer Opportunity?

For several years, we’ve heard about global warming and climate change as issues we need to address. And the debate has had arguments spanning from compelling science to just a natural cycling of weather patterns. Now, legislators the world over have begun to amend the dialog to one of measuring the carbon footprint. Scientists have added water to the equation and now are beginning to speak of measuring the entire environmental footprint.

One can hardly open the newspaper, watch the news, or go anywhere without running into some mention of what has become the most notable environmental issue of the decade, said Dr. Charlie Hall, holder of the Ellison Chair in International Floriculture at Texas A&M; University, who is coordinating this year’s Seeley Conference.

For our industry, the issues are more compelling. We think of ourselves as being the original green industry, but we often fail to promote that, perhaps, partly out of fear. Do we know what our environmental footprint really is? Are we as green as we think? Do we have an opportunity for better promotion, or do we need to get our house in order first?

Of course, the real issues revolve around what it means for our individual businesses — our bottom lines. Will the outcomes of the legislative debate impact our businesses? Are there modifications we need to make to stay in business once the debate ends and the laws are enacted? Will our businesses be able to remain financially solvent or will regulations force us out of business?

Hall adds that business owners should not think of the climate change debate as merely an environmental issue. Instead, they should view it as a market transition and as in any market transition; there will be winners and losers. With the water and carbon policy debates occurring locally and nationally this year, this year’s conference is all the more critical to attend, Hall notes.

As always, the think-tank atmosphere of the Seeley Conference will allow for plenty of interaction with fellow industry leaders regarding these timely issues. For more information regarding the Seeley Conference and this year’s program, the conference website is www.hort.cornell.edu/seeleyconference, or Facebook users can refer to the Seeley Conference fan page.

Bill Gates on Sustainability at TED 2010

by

One of the day’s strongest talks at the most recent TED conference was by Bill Gates. He’s spoken at TED previously on a variety of topics, among them education and malaria (last year he set free some mosquitoes from the stage to make a point about the latter). This time he directed his mind toward energy and climate; in particular how to get CO2 levels to zero. He presented an equation in which:

Total CO2 = People x Services Per Person x Energy Per Service x CO2 per unit of energy.

So, if he’s right, one of the variables on the right of the equal sign has to go down to zero. He argued why it won’t be any of the first three and focused on the last one, CO2 per unit of energy. He spoke of reducing and converting fossil fuels, managing nuclear energy in ways that are safe and don’t promote proliferation. He’s investing in these areas and he was clear that he’s early on in thinking about his problem. This one is a must watch.

http://video.ted.com/assets/player/swf/EmbedPlayer.swf

Fewer sick days in green buildings

by

Nearly $5 per square foot per year. That’s the estimated savings by tenants of environmentally friendly buildings because of fewer employee sick days, according to a study cited by the U.S. Green Building Council. About 55% of respondents in the study also indicated that employee productivity had improved in green buildings.

Source: U.S. Green Building Council

Say Goodbye to the McMansion

by

Times have changed, and the square footage of new American homes is dropping. Super-sized homes are out, and efficiency and versatility are in. MarketWatch’s Amy Hoak reports on the latest building trends.

http://s.wsj.net/media/swf/main.swf

Maintaining Brand Stature in a Crisis

by

From The Core: (This is a produce industry blog, but the point made here has application to the green industry.)

If you’ve been living under a rock or don’t have access to television, radio or the Internet, you might have missed the recent news about Toyota. First, they announced depleting sales due to the recent recall of eleven vehicle models following the malfunction of a floor mat entrapment and sticking gas pedal. Then, as if things couldn’t get any worse, came the question about the functionality of the brakes on all of the company’s hybrids, including their famous Prius model. Ouch.

Toyota’s public relations crisis worsens on a daily basis, yet the company continues to push through each blow by responding apologetically and sincerely through several media vehicles to reach their target audiences – current and potential owners of Toyota automobiles.

As if they wrote the book on “crisis management,” Toyota started with a massive public relations campaign with press events in both the United States and Japan featuring politically correct statements from top executives for television, print and digital media hunters to push. On YouTube, the President and COO of Toyota North America posted a heartfelt apology video to Toyota owners promising to “fix the problem.” On the company’s website, a page is devoted to the recall and provides customers with a “Customer Experience Center” phone number.

Taking ownership for its problems, Toyota has exhibited a concentrated effort to own responsibility, taking control of its story and communicating with honesty and regularity directly to consumers. Toyota’s response comes across as apologetic and believable. But have they done enough to sway public opinion amidst the media storm? To find the answer, I sought consumer conversation on Facebook and Twitter. What better way to gauge consumer attitude? The disparity in reaction on the social media sites surprised me.

On Toyota’s corporate Facebook page, proud Toyota owners posted photos of their beloved automobiles and convey their undying faithfulness to the company, no matter what. With a quick Twitter analysis of conversation surrounding #Toyota, I find exactly the opposite, with statements that are primarily negative in nature discussing the company.

As a marketer in the fresh produce industry, I think about the public’s reaction to the spinach and tomato crises that occurred over the past few years. What if the spinach crisis hit today? Would it be a one-sided media story? Are we fully engaged in consumer conversation through the available media like YouTube, Facebook and Twitter to educate consumers, increase awareness and tell our story?

So what? In an industry where food safety is paramount, I wonder if we can all learn something from the Toyota crisis. Are we prepared for a major food safety crisis and recall from a public relations perspective? What will you do if your company’s name is making headlines and changing consumer perception for the worse about your brand? Or even if it’s not your company, but rather a commodity that you provide? Does your company have a crisis management strategy in place?

Fire Yourself Today

by

From today’s Harvard Management Tip of the Day:

Management shake ups, while disruptive, can be good for a company. They bring in fresh perspectives and require that leaders take a hard look at their own performance. Don’t wait for your company to get in trouble. Instead, fire yourself. Not literally, but think about what you would do in your position if you were to start anew. What would you do differently if this was your first day on the job? Taking this step back can help you evaluate the strategies and approaches you are currently using, see things that are too difficult to see when you are entrenched, and re-energize you for the challenges ahead.