Strictly Business

Goodwill Industries of Western New York cut the ribbon on a new retail location in Batavia Wednesday.

The Goodwill Store is in the Value Home Center Plaza, 4152 W. Main Street. The site doubles as a donation center, which accepts donations of clothing, toys and household items from the community. The store resells the donated items.

“Not only do we want to provide shoppers with a modern retail experience, but we want to make the donor’s experience as convenient as possible,” said Lisa Churakos, director of donated goods and retail for the company, in a press release.

It’s the not-for-profit organization’s eleventh store and its first in Genesee County.
The Goodwill was founded in 1902 to provide jobs and training to people who lack education or experience or who have disabilities. The Western New York chapter was formed in 1920.

---Samantha Maziarz Christmann

So maybe Trader Joe's, the California specialty grocer that has built an almost cult-like following, is coming to Western New York.

We don't know where - or even if Trader Joe's is coming for sure. But the good folks at the Kenmore Village Improvement Society, who have been practically begging the chain to come to Kenmore, say they have it on good authority that Trader Joe's will make its debut here sometime by the end of next year.

"We created a buzz," says Melissa Foster, the group's president, referring to its campaign to lure the chain to Kenmore.

Unfortunately for the Kenmore folks, it doesn't look like Trader Joe's has its eyes on the village, but rather other potential destinations in the Buffalo Niagara region.

But it does make sense for Trader Joe's to move into Buffalo. The chain opened its first store in the Albany suburbs in early August, with a line of several hundred shoppers that, in the words of the Albany Business Review, "snaked from the front door, around the parking lot and to the main entrance at 79 Wolf Road."

I can't say I've ever been excited enough about grocery shopping to wait in line to do it. Then again, I don't like shopping much.

Trader Joe's also set to open in the Rochester market - in the suburb of Pittsford - next month.

Buffalo will be just another stop along the way.

Of course, Trader Joe's arrival would be bad news for all of the other grocery stores in the Buffalo Niagara region, for the simple reason that any customers who shop at Trader Joe's won't be buying those same items at Tops, Wegmans, Dash's, Aldi, or Save-A-Lot.

That's not an inconsequential impact, because the Buffalo Niagara region is losing people, which means there are fewer people buying groceries here. And since grocery shopping isn't the kind of thing you drive to another city a couple hours away to do (your ice cream would melt!), all Trader Joe's would do is take its slice of the region's food-shopping dollars from the chains that already are here.

But it will keep Tops, Wegmans, Walmart and all the rest on their toes. And that's a good thing.

-David Robinson

With the loonie above par, Western New Yorkers can rejoice that we will get a fresh influx of dollars from cross-border Canadian shoppers.

We can, but sometimes we don't.

How many times have you heard someone complain about the "Canadians making a mess of mall parking lots" or grumbled about the driving skills of someone behind the wheel of a car with an Ontario license plate?

You would think anyone who has passed Economics 101 would thank their lucky stars to have Canadian consumers propping up our struggling economy. Our local retailers, hoteliers and small business owners certainly get it. And communities elsewhere would love to have something similar.

Yet you still hear the grumbles. And you still see stories like this one, where shoppers have begun calling Canadian shoppers "milk piranhas" for buying so much milk at U.S. grocery stores. One consumer calls shopping among Canadians a "nightmare." Doing without the $400.99 million in sales tax Canadian shoppers brought in to Erie County last year sounds like more of a nightmare to me. And I'm sure if you talked to our local dairy farmers, they count Canadian "milk piranhas" as a blessing.

Shoppers in Bellingham, Washington have created a Facebook page called, "Bellingham Costco needs a special time just for Americans." It has 4,090 likes.

This story spells out why:

Canadians are being admonished on the Facebook page for littering, bad parking, cutting off other drivers, pushing past other customers to grab merchandise and clearing Costco shelves of milk.

“It’s not Costco, it’s everywhere!!! I feel like I’m in Canada anytime I drive anywhere in Bellingham. I wouldn’t have a problem if they were considerate people ... but they are the rudest people I’ve ever encountered,” according to poster Julie Lawson.

According to the same article, a handful of Canadians have started a movement of their own:

It’s that kind of ire that inspired Todd Smith, 25, of Coquitlam B.C., to launch his own Facebook page: “Canadians invade Bellingham Costco,” inviting Canadians to shop the Bellingham Costco on Saturday, Aug. 18.

Smith says he and his partner make the half-hour drive across the border weekly, not only because gas, food and clothes are cheaper in the U.S., but because stores there offer greater variety. About a dozen people have said they’re interested in the shop-the-Bellingham-Costco event.

“It’s a bit tongue-in-cheek, but we do go down there quite regularly and we might go down Saturday,” said Smith. “I find it kind of odd that these people would take such trivial things out of context. Have they not stopped to consider that we’re supporting their economy?”

It's a good question.

---Samantha Maziarz Christmann

There's a fascinating story in today's Business section about the market for luxury childrenswear, which makes up about 3 percent of the $34 billion childrenswear industry. It turns out dressing affluent children can be very lucrative. We can't have mommy's favorite fashion accessory looking shabby, now can we?

"They're a walking billboard of you. They're a reflection of who you are, so if you are someone highly stylized, then you want to make sure your kids are the best-dressed kids out there," said Sasha Charnin Morrison, fashion director at Us Weekly.

After all, look how much celebrities and celebrity wanna-bes spend to deck out their dogs. And they will never even be able to drop names among their playmates!

But what exactly does a $2,000 children's dress look like?

Here are some looks from some of the priciest childrenswear lines. Mouse over each photo for the designer:

---Samantha Maziarz Christmann

Merchants have been fighting credit card companies over swipe fees for years. As the battle drags on, you may have noticed more mom-and-pop retailers have instituted a minimum purchase amount for credit card purchases.

Thanks to a recent settlement, merchants will now be able to pass swipe fees on to consumers rather than incurring them themselves.

The Wall Street Journal interviewed about two dozen retailers, many of whom said they aren't sure whether they want to risk alienating their customers by passing the cost of swipe fees on to them:

Steven Resnick, a partner at the accounting firm Resnick Amsterdam Leshner in Blue Bell, Pa., which sued Visa and Mastercard, says he would "definitely not" impose a surcharge on clients because "it would be like we're nickel-and-diming them," he says.

After complaining about being nickel-and-dimed by the credit card companies, one would hope merchants wouldn't want to turn around and do the same to their own customers.

The swipe fee settlement is a messy victory for merchants. They are no longer required to pay the surcharge themselves, but they still have to figure out who pays it. The credit card companies still get their money, which amounts to about 1 percent to 3 percent per transaction. But it begs the question, especially in a society where one almost cannot function without plastic, what is so costly about the system that every swipe costs so much?

According to swipe fee reform group the Merchants Payments Coalition, the money brought in through swipe fees far exceed the cost of doing business. In fact, they bring in twice as much money as ATM fees and overdraft charges:

What started in the 1960s as a fee to cover the transaction costs of using plastic is now a cash-cow for the big banks that issue 90% plus of all MasterCard and Visa cards.  According to a consultant for the big banks, only 13% of the credit card interchange fee goes to processing credit card transactions; much of the rest goes to pay for billions of pieces of unsolicited junk mail annually among other dubious credit card marketing activities aimed at students or those with bad credit histories.

The more people you ask, the more it sounds like the recent settlement was a victory for no one but the banks, who get to keep the status quo.

On this day in 1962, Sam Walton opened the first Walmart store in Arkansas. A lot has happened in those 50 years.

Not only has Walmart become the most successful retailer in history, it has become one of the most polarizing. Bad news and critics just seem to follow Walmart everywhere.

In North Tonawanda, the company is constructing a super store it had fought residents for years to build. It's the kind of opposition that follows the store everywhere it tries to make a home. Even as I type this blog, thousands of people are protesting a proposed Walmart store in Los Angeles' Chinatown.

This film by Robert Greenwald paints Walmart as a worse villain than anything Hollywood could have dreamed up.

 Walmart's most recent bad publicity concerns a bribery scandal in Mexico that implicated top executives. But over the years there has been outcry over just about any economic and social crime you can think of: child labor, depressing wages, driving jobs overseas, withholding employee pay, putting mom and pop companies out of business, polluting the environment, union busting, discrimination.

Type any crime plus the word "Walmart" into a search engine and you're bound to find something. On a lark, I Googled the most heinous thing I could think of, "Walmart kills kittens," and got this.

Why don't other mega retailers have this problem? Do you recall anyone protesting the arrival of a Target store or a Wegmans?

Some retail employees of the Apple Store will soon be getting raises, by as much as 25 percent. Workers there typically earn $9 to $15 per hour, while tech support makes as much as $30 per hour.

The company said it is instituting the performance-review-based raises after a survey found its workers were underpaid, but analysts speculated the company was also motivated to better compensate workers once it found they were being poached by Microsoft for its own retail stores.

Employee compensation is an interesting subject. Here is a neat little tutorial about wage determination in competitive markets. It's from the United Kingdom, but still works.

Here's a video lesson:

Subscribing to free market theory, many folks believe minimum wage and other regulations concerning wages and benefits should be done away with.

This Web site lists what it believes to be the pros of ending minimum wage. It says abolishing minimum wage would create more jobs, prevent outsourcing for cheaper labor and keep out illegal aliens.

Here is Ron Paul advisor Peter Schiff advocating the abolition of the minimum wage:

Other folks don't think so.

Here is a lengthy rebuttal:

J.C. Penney keeps making headlines, but will it have any effect on the company's bottom line?

The retailer first made a splash in January when it announced it would do away with sales and coupons in favor of an everyday-low-price model. It was part of a plan to revive the fading brand under the new leadership of former Apple executive Ronald Johnson.

The next bit of buzz came when Penney hired Ellen DeGeneres as a spokeswoman. Social conservatives complained and staged a boycott.

Most recently, the company ran Father's Day ads featuring a same-sex male couple. It got the company a lot of free publicity, but has failed to move the needle on sales.

It joins another ad featuring same-sex moms:

Ironically, the most damaging ads were its first set of pre-makeover commercials, which ineffectually described the company's new pricing strategy:

By all accounts, Penney's efforts are missing the mark, says CBS MoneyWatch:

"The retailer's performance has been so bad it faces a possible credit downgrade, hardly a ringing endorsement for a company supposedly in turnaround mode," writes Constantine von Huffman.

Walmart held its annual shareholder meeting, facing investors for the first time since the New York Times blew the lid off an executive-level scandal at the company, involving the bribing of Mexican officals.

In preparation, the company also addressed a gathering of thousands of workers, including 1,300 international ones. Instead of addressing the scandal directly, the Wall Street Journal reports, CEO Mike Duke called for "keeping" integrity Walmart's highest priority.

Duke, who has been asked to step down from his post by activist pension funds and proxy firms, preached integrity to the crowd.

"Football, soccer, cricket, the one thing that's always important is playing by the rules," Duke said, according to the journal report.

Shelly Banjo of the Journal continues:

International division chief Doug McMillon emphasized that despite pressure to grow, employees and management needed to comply with government laws even "when no one is watching."

"Is this clear?" he shouted sternly to the arena filled with workers.

The executives' grandstanding reeks of hypocrisy, according to critics including Kevin Coupe of MorningNewsBeat.com:

If I were a Walmart shareholder - or an employee, or business partner - I think I'd be less concerned with unethical behavior in the ranks than I would be with such transgressions at the highest levels of the company. They can make it sound like rogue employees wandering around Mexico handing out bribes, but the Times story suggested that the bribery was both systemic and systematic, and that they were covered up in Bentonville. That's what top execs will have to answer for . . . . There are those at Walmart who would like people to think that all the ethical transgressions took place south of the border, but to me, that seems unlikely.

Dollar stores have a problematic image--low rent, tacky, maybe even dangerous.

Nowhere is this better illustrated than in Vermont's struggle to keep such stores out of the state. Though Vermont has fought valiantly to thwart big box stores from becoming ubiquitous, it's facing a new "threat" from dollar stores. Where Walmart has just four stores in the state, various national dollar chains have 12.

A recent New York Times story shows just how much of a threat Vermonters feel dollar stores to be to the essence of their communities, and outlines their battle to keep them out. Because of dollar stores' small footprint, they're not as easy to block as giant big box stores that can be zoned out for size.

Here is Abby Goodnough writing for the Times:

Chester, with 3,000 residents, has a number of homegrown businesses, many located in Victorian houses along Main Street. But there is little in the way of generic commercial architecture here — a selling point that drew residents like Mr. Veliz and Mr. Cunningham, who moved his family here from Baltimore in 2004.

“Most of the people in Chester now are people who have come from someplace else,” Mr. Cunningham said. “It’s like a lot of Vermont. Why come to a place like this only to have it turn into the kind of place you were trying to leave?”

Nodding to that concern, the Development Review Board is requiring Dollar General to use certain materials — the wood clapboard siding, for example, instead of a vinyl alternative that the company wanted. Dollar General on its own proposed a building with a peaked roof, as well as a cupola and a faux hayloft door.

In their decision approving the project, board members noted that a retail store was an “allowed use” in the part of town where Dollar General wants to open. They also said that, by using wood siding, the store would meet a zoning requirement that new buildings “adhere harmoniously to the overall New England architectural appearance” of the town.

Tawn Earnest, a spokeswoman for Dollar General, said the company had a long history in small towns and rural communities, often serving customers who have few retail options. Opposition to Dollar General, which is based in Goodlettsville, Tenn., is “a rare exception,” Ms. Earnest said, adding, “We have been very thoughtful in the placement and design of the store to benefit Chester.”

Paul Bruhn, executive director of the Preservation Trust of Vermont, said opposition to dollar stores has sprung up in at least four other towns in the state. Mr. Bruhn’s group, which seeks to protect what it calls “the essential character of Vermont,” has been tracking the spread of dollar stores since 2010; it provides grant money to citizens’ groups that oppose them, including Mr. Cunningham’s.

“The dollar stores have proliferated in a way that seems a little extreme,” Mr. Bruhn said. “One of the things I think is crucial for Vermont, in terms of maintaining this very special brand that we have, is we don’t want to look like Anywhere, U.S.A. And homegrown businesses are a crucial piece of that.”

The spread of dollar stores has come during a period of decline of the general store, a Vermont institution that in many towns served as a meeting place and all-purpose emporium. This week, the Barnard General Store, not far from Chester, closed after 180 years. Its owners cited the twin blows of Tropical Storm Irene, which badly flooded parts of the state last summer, and a nearly snowless winter that kept skiers away.

Lonnie Lisai, whose family owns Lisai’s Market, said he was already strategizing about how to survive if the Dollar General store opens. A lunchtime salad bar, a selection of fancy cheeses and lower-cost alternatives to popular brands are in the offing, he said.

“If you pay a buck over at Dollar General and you’re going to pay a buck eighty-nine here, it’s, boy, what do you tell the customer?” Mr. Lisai said. “I can’t compete. And hopefully they’ll understand that.”