Friday March 17, 2017files.constantcontact.com/e77cb272401/4a016a3c-b78b-43f4-8dbe-9… · However, Reuters reports that right now Walmart is running a price comparison test on groceries

Compiled by Ray Young (RPM) and John Kelly (Daily Clips)

Friday March 17, 2017

Lidl Speeds up U.S. Invasion Plans -- Supermarket Chains Should be Afraid

Earlier than originally planned, Lidl will open its first store this summer in Fredericksburg, Virginia, and will have a total of 20

stores operating by the end of the year in that state, North Carolina and South Carolina. By mid-2018 the company plans to

have 100 stores up and running. The secretive, privately held, German company (Schwarz Gruppe) has aggressive plans to

expand in the Northeast as well as Texas and other states.

I am worried about this new competition, because the invasion of Aldi and Lidl in England proved to be very difficult

competition for established leaders like Sainsbury, Tesco and Morrison, whose sales and profits tanked. Moreover

Walmart’s Asda division reported lower sales in the last two years because shoppers switched to Lidl and Aldi, attracted by

the sharp values of the German discounters.

However, Reuters reports that right now Walmart is running a price comparison test on groceries in about 1,200 stores to

close the price gap with Aldi and other competitors like Kroger, Albertson, Publix. The test was launched in 11 Midwest and

Southern States. Walmart is trying to find the right price point across a range of products that will attract more shoppers.

According to the report Walmart is now offering lower prices than Aldi which is an improvement over recent estimates. Over

the past few years Aldi prices were 20% lower than Walmart.

Here is what I know now about the U.S. entry of Lidl:

The company established its headquarter in Arlington, Va. in 2015 and now employing about 1,400 associates to develop

the onslaught into the United States. Its main competitor will be Aldi that has grown to 1600 units and plans to have 2000

units by 2020. One could guess that Lidl wants to match the Aldi stores. However, it will also affect Walmart and Target

stores who will have to compete with these newcomers.

To staff the first 100 stores, it is estimated that Lidl would have to hire more than 4000 associates.

The company has built three major distribution centers in Spotsylvania, Va., Alamance, N.C., and Cecil County, Md. It is

estimated that the company invested about $100 Million in constructing the three buildings. One can easily guess that major

expansion will be in concentric circles around these distribution centers.

Lidl’s targeted states are along the East Coast from New York State to Florida and Texas. Aldi Süd is already well

represented in these states – there are 98 stores in New York State, 37 in New Jersey, 113 in Pennsylvania, 36 in Maryland,

32 in Virginia, 61 in North Carolina, 28 in South Carolina, 54 in Georgia and 90 in Florida. There are 90 Aldi stores in Texas.

This list does not include the Trader Joe’s location which reports to Aldi Nord.

Lidl stores are projected to have about 21,000 square feet selling space. The stores are said to be more efficient with less

back storage space.

It is likely that Lidl will try to match Aldi by having 2,000 stores by 2020. The German food publication Lebensmittel Zeitung

speculates that a rapid expansion of Lidl could be expected and that the company could acquire units from Kmart, Food

Lion, Sav-A-Lot, Dollar Tree, and others. The publication suggests that acquisition of Dollar Tree would make Lidl quickly a

“middleweight in the U.S. food retailing industry.

Several retailers are preparing for the new competition. Notably Whole Foods opened a new, aggressive division called 365.

We are entering a period of fierce price competition. It will not be very notable in the first few month, but the effect will be felt

throughout the food and discount industry as these new stores grow in number. Both Lidl and Aldi have the resources to

grow in the United States. It will be interesting to watch. Everyone must have initiatives to preserve their share of the market

– even to gain at the expense of others.

https://www.forbes.com/sites/walterloeb/2017/03/15/lidls-worrisome-invasion-plans-for-the-u-s-a/#4eb99fa2359e

One of Macy's Largest Threats is Getting Even Bigger One of Macy's largest competitive threats is about to get even bigger. Off-price retailers TJX, Ross and Burlington plan to open nearly 300 U.S. stores combined this year. That's roughly the same number of shops that Macy's, Sears and J.C. Penney will collectively close. Their expansion should continue to fuel off-price apparel sales, which grew 39 percent between 2011 and 2016, according to Fung Global Retail & Technology. Yet while there's no denying off-price chains are benefiting from department stores' shrinking sales, some investors are starting to question if they're getting ahead of themselves. One of the biggest concerns is their footprints, which are growing as others contract. Investors also worry that vendors could limit their supply to off-price chains in an effort to sell more merchandise without a discount. Meanwhile, department stores are working to whittle down the number of products they keep on their shelves, which could potentially cut off some supply. Analysts, however, say these fears are overblown, noting the $52 billion-plus off-price business is simply too big for brands to ignore. Goldman Sachs on Thursday added TJX's stock to its conviction buy list, saying it has been a "key beneficiary of the unraveling of the regional mall." "I don't think you can avoid that type of power in the marketplace," Michael Brown, a partner in A.T. Kearney's consumer products and retail practice, told CNBC. While speaking at a recent investor conference in New York City, Macy's CFO Karen Hoguet said off-price chains have proven a bigger long-term challenge to the company than the internet. Indeed, TJX's U.S. revenue is expected to surpass Macy's this year, according to Citi Research. Off-price stores' constantly changing merchandise and bargain prices have appealed to new and existing shoppers alike. Meanwhile, excess inventory that failed to sell at traditional shops — or was left in the market when a store closed or went bankrupt — has helped them fill their racks. Ronen Lazar, CEO of Inturn, told CNBC he doesn't see either of these things changing anytime soon. His company owns software that makes it easier for vendors and retailers to do deals. "Excess inventory is just a fact of the business," Lazar said. Even as companies like Ralph Lauren and Hugo Boss say they're shipping fewer products to off-price stores, there is an endless stream of others willing to take their place. Some brands even create products meant solely for these stores. And if a certain vendor decided to cut out off-price chains, they could also acquire inventory from third-party sellers, Lazar said. "They're going to continue to find brands to feed them," Murali Gokki, a managing director in AlixPartners' retail practice, told CNBC.

Yet as these stores grow their footprints, they'll need more inventory to fill their racks. Already, TJX has 2,800 U.S. locations through its T.J. Maxx, Marshalls and HomeGoods stores. Management has said it sees potential to add another 1,300 stores in North America long term. Despite these chains' aggressive targets, off-pricers' expansion plans remain reasonable, Brown said. Their stores are typically located outside of malls, where they aren't saddled with the additional costs of maintaining the common areas. They've also invested little into e-commerce, saving expenses and making their stores destinations. At the end of the day, Citi analyst Paul Lejuez said off-pricers' size is one of their most attractive characteristics for vendors. Often, when a company makes too much product, it doesn't want to dilute its brand by packing the excess inventory into one location. Instead, vendors prefer to have their merchandise spread across the country, where it's easier to make it "disappear," Lejuez recently told investors. "Every year somebody says, 'Have they peaked?'" Gokki said. "Every year they have proven to find avenues for growth." http://www.cnbc.com/2017/03/16/one-of-macys-largest-threats-is-getting-even-bigger.html?__source=yahoo%7Cfinance%7Cheadline%7Cheadline%7Cstory&par=yahoo&doc=104343449

Two States Accounted for Nearly 30% of Grocery Store Openings Last Year The Lone Star State and Golden State are ripe areas for grocery store expansion.

In 2016, more than 440 grocery stores opened in the United States, adding 18.8 million sq. ft. of space. And 27% of those

stores opened in two states: Texas and California.

That’s according to JLL’s latest Grocery Tracker JLL’s latest Grocery explores four trends transforming the grocery shopping

sector.

After Texas and California, the next three largest states in terms of new grocery store space were North Carolina, Virginia,

and New Jersey, which each accounted for 5% of total space delivered in 2016.

Aldi and Grocery Outlet dominated California, while Kroger and H-E-B continued their push into the Texas market. Overall,

Aldi and Whole Foods were the biggest movers in the sector, opening the most stores by count.

“In 2016, new grocery stores openings were slightly above average, thanks to grocers expanding their presence in California

and Texas,” said James Cook, director of retail research, JLL. “I expect the number of new grocery stores opening their

doors to be slightly less this year, but we will see an uptick again in 2018 as Lidl makes a strong push along the East Coast.”

http://www.chainstoreage.com/article/two-states-accounted-nearly-0-grocery-store-openings-last-year

JCPenney CMO Leaving to Become Hershey’s Chief Growth Officer Only two years after taking the position in April 2015, JCPenney Chief Customer & Marketing Officer Mary Beth West will

step down on April 1. West will join The Hershey Company as its new Senior VP and Chief Growth Officer on May 1.

In her brief tenure at JCPenney, West spearheaded the “Get Your Penney’s Worth” marketing campaign, which emphasized

private label brands and included select deals for only a penny. JCPenney designed the campaign to bring the retailer out of

a massive hole that saw the brand lose $4 billion in market cap in the early 2010s.

While JCPenney still experiences many of the difficulties of their department store counterparts, the retailer delivered its first

positive net annual income since 2010. In West’s absence, Kirk Waidelich, Senior VP for Sales Promotion and Marketing,

and Sheeba Philip, VP for Marketing Strategy and Communications, will oversee day-to-day marketing responsibilities.

In her role at Hershey, West will oversee the company’s growth strategy, including Insights and Analytics, Strategy,

marketing excellence functions, Innovation, Research and Development, Mergers and Acquisitions and The Hershey

Experience. She will report to CEO Michele Buck.

For more than 20 years she served in C-level roles at Mondelez International, Inc., previously Kraft Foods, including roles as

its Chief Category & Marketing Officer and President of both its North American beverage and grocery businesses.

West served 10 years on the Board of Directors for JCPenney, and is currently on the Board of Directors for Hasbro Inc. and

the Board of Trustees for both The Wallace Foundation and Mercy Ships.

http://retailtouchpoints.com/features/retail-movers-and-shakers/jcpenney-cmo-leaving-to-become-hershey-s-chief-growth-

officer

Fixing Online Grocery's 'Failure to Launch' Despite e-commerce taking a firm grip on much of our shopping behavior, there's one category that continues to buck the

trend

That, of course, is grocery. Not the soul-crushing search for a parking spot, nor the interminable queues at the checkouts,

nor the inevitability that the one item you need for your recipe will be unavailable, have been able to break the retail habit.

Today, only 7% of shoppers order their groceries regularly online. Even among millennials that figure is stuck at 12% (and

not rising). While other categories such as electronics and sporting goods have an online share up at 50% or more, grocery

continues to flatline around 4%.

Why the failure to launch?

Online shopping has become too much about online and has forgotten about how people really do their shopping. The

problem can be broken down into four key areas: Experience, habit, effort and trust.

Make online grocery analogous to the physical experience

Humans are creatures of habit. In grocery, that habit has been formed since we were first pushed around in a shopping cart

as babies. The fact is, a supermarket shelf is simply the best and most efficient way to find and make decisions about low-

interest, habitually-chosen products.

So why does our online equivalent look and behave so differently?

We need to redesign e-commerce grocery to be more like the physical experience, not try to make grocery more "digital"!

What would this mean in practice?

Replace lists and grids with … a shelf! A virtual shelf will have any number of user benefits, such as enabling the viewing of

entire categories of products in one screen (just like in real life).

Enable the display of products in proportionate sizes. Most of us have no idea of the different weights of various sizes of,

say, canned tomatoes.

Replace navigation with simple scrolling.

Add touch. If users can zoom in, examine and "physically" toss items into their cart, they'll have a more tangible and

satisfactory experience.

Incorporate promotional features such as aisle-ends. These will not just add to the digital experience for shoppers, but will

also provide bargaining power and measurement for grocer category managers when negotiating with suppliers.

Cater to people's real shopping moments

While there are countless different occasions and motivations for going shopping, rarely, if ever, are attempts made to cater

for this. Our research shows that core occasions are the following: weekly restocks, fresh top-up (a smaller produce trip),

specialty trips (recipes you need to make) and emergency trips.

Yet, personalization is an extremely rare activity in online grocery, despite the reams of data that grocers hold on their

customers.

If the online experience was geared towards the real needs of each individual, we could streamline and reward the

experience of shopping online. Grocers must implement an actionable, multidimensional segmentation that would help us

define the content, experience and opportunities for each segment. Event-driven CRM messaging allows grocers to keep

track of customers' online and offline shopping data in one place, enabling them to predict and proactively market.

Erase the gap between our love of food and our loathing of grocery shopping

The peculiar tension in the grocery space is that while we love food and cooking, we really hate shopping for it.

The online shopping experience is almost entirely devoid of the inspiration and excitement that the planning of mealtimes

should imbue in us. By leveraging insights from data, generating a rich program of suggestions for food or drinks and

inserting them seamlessly into the shopping experience, grocers could provide added value to the busy shopper. By

reminding consumers of the endgame (a delicious meal) while they are shopping, grocers could eliminate some of the

existing tension.

In the not-too-distant future, we can expect to see the main interface for browsing the web move from the screen to an

immersive VR, AR or AI experience. A "virtual" shelf could allow shoppers to navigate between aisles and make product

selection as easy and natural as "grabbing it" with your wand. While we are some way off from achieving this experience, it

has to be the ultimate destination for the evolution of online grocer. It'll be a world where every customer gets to shop in the

perfect outlet: open 24/7, no checkout lines and where nothing is ever out of stock.

http://adage.com/article/digitalnext/fixing-online-grocery-s-failure-

launch/308239/?utm_campaign=SocialFlow&utm_source=Twitter&utm_medium=Social

Party City Buys Franchise Stores

Party City Holdco Inc. is increasing its corporate-owned store count.

The company has entered into an agreement to acquire a master franchise group representing 18 franchise stores in North

Carolina and South Carolina for a purchase price of $31 million.

Prior to the acquisition, the company’s retail operations included 765 company-owned Party City stores and 164 franchise

stores.

“This latest franchise acquisition expands our footprint in the Carolinas and provides us with an opportunity to strengthen the

brand integrity of these locations and to explore opening additional company-owned stores in this market over time,” said

James M. Harrison, CEO. “We will continue to evaluate accretive franchise acquisitions going forward in order to expand our

company-owned footprint, improve the operational efficiencies of these stores and enhance the customer experience.”

Party City’s retail operations include over 900 specialty retail party supply stores (including approximately 150 franchise

stores) throughout North America operating under the names Party City and Halloween City, and e-commerce websites.

http://www.chainstoreage.com/article/party-city-buys-franchise-stores

He's a Legend and you Suck: A Millennial Reveals Hard Truths at SXSW

Japie Stoppelenburg was just trying to share his genius with the world, but no one would listen.

He was a fresh, young creative at an agency in Holland, and a millennial.

"I really was convinced when I started working that I was like super talented and basically a genius," Mr. Stoppelenburg said,

his voice consciously sliding from a slight Dutch accent into Valley girl upspeak when he recalls his talent entitlement. "And

then when everyone else refused to bend to my opinion, I was like well everyone else sucks."

To be clear, this was the old Stoppelenburg. Before he worked through his early creative frustrations, and he found a kind of

Zen in the ad industry.

He blames his attitude when he was younger -- he's now 29 -- on being a millennial, that age group that roughly fits people

born between 1980 and 2000.

Mr. Stoppelenburg was in Austin at SXSW, and he gave a talk titled, "You're a Legend and Everyone Else Sucks."

That's also the title of his new book, which he wrote to help any millennials that might face the same problems.

Millennials have certainly splashed into the workforce with a "we're here" attitude, and many companies are learning to

adapt to this latest generation. There is no shortage of essays, articles, tweets, videos, Facebook posts and all other media

dissecting what it means to be millennial and how to communicate with millennials if you're not one.

Millennials are likely sick of the stereotypes, too, that they are entitled, they don't want to work as hard, they want immediate

gratification.

"I'm a millennial," Mr. Stoppelenburg said. "That's why I feel the straight-up authority to bitch-slap them."

Mr. Stoppelenburg had to get out of the way of his own ego before he could find happiness and success, but before that,

there were years of frustration, he said. He was made lead creative on a cable company account, and he met the kind of

roadblocks anyone in advertising has met for the past 100 years -- rejection.

"I must have presented them 12 genius concepts and they were all brilliant, and they wouldn't, like, approve any of them,"

Mr. Stoppelenburg said, laughing at his own sense of self. "They should understand. They have to listen to me because I am

a genius and they need to shut up."

Well, needless to even say, this led to some real creative disappointment. He had to cope with a work-life that couldn't

possibly match his inflated sense of self.

He even went into therapy, and eventually, he figured it out.

"I started entertaining this thought," Mr. Stoppelenburg said. "What if they are not all bullshit. What if I'm bullshit."

He felt the need to write his provocative book because he has since joined a smaller creative firm where he is in a position of

leadership. He sees younger people coming up and running into the same problems he had.

Some of them were at his SXSW talk, like Richard Wols, 25, a programmer at a major tech company, which he didn't want to

name.

"I was that genius," Mr. Wols said.

It took Mr. Wols about a year before he realized he worked with people just as talented as himself and more so.

He had gotten really good at taking credit for work by being vocal in front of the right people; meanwhile, more talented

programmers were being overlooked.

"At some point, I started looking at what other people were doing," Mr. Wols said. "And I was like, 'They are actually better

than me, they just don't shout it off the roofs, and I should just shut up.'"

http://adage.com/article/special-report-sxsw/a-legend-suck-a-millennial-reveals-hard-truths/308290/

Us Weekly is Sold to National Enquirer Publisher

Us Weekly, a celebrity magazine that has long been a staple at checkout counters, is changing hands.

On Wednesday, American Media Inc., publisher of The National Enquirer and Radar Online, announced that it had reached

an agreement to acquire Us Weekly from Wenner Media, which has owned it since 1985. Terms of the agreement were not

disclosed, but two people who were briefed on the deal but requested anonymity because the terms were not public said the

price was $100 million.

“We are excited to bring one of the most distinctive and powerful media brands to AMI and are looking forward to continuing

its great editorial standards its loyal and growing audience expects,” David J. Pecker, American Media’s chairman and chief

executive, said in a statement.

The acquisition of Us Weekly will give American Media a younger, more affluent audience, and a larger digital presence. It

will also increase American Media’s heft in celebrity gossip — along with The National Enquirer and Radar Online, the

company publishes the supermarket staples Star and OK!

For Wenner Media, which also publishes Rolling Stone and Men’s Journal, the sale of Us Weekly represents a further paring

of assets. Last year, it sold a 49 percent stake in Rolling Stone to BandLab Technologies, a Singapore-based music

technology company led by Meng Ru Kuok, the son of an Asian business magnate.

“I’m sad to say goodbye to those people and to a great brand — it’s done wonders for us and our family,” Gus Wenner, the

chief digital officer at Wenner and the son of the company’s founder, Jann S. Wenner, said in an interview. “But it’s also an

exciting day for us, and I’m very excited to focus on the next chapter of Wenner Media and on the brands that we have

where we see enormous growth potential.”

Like other celebrity publications, Us Weekly has struggled in the digital age. Once a powerhouse whose editors included

Janice Min and Bonnie Fuller, the magazine had a roughly 30 percent decline in newsstand sales in the second half of 2016

from the same period a year earlier, according to publisher’s statements filed with the Alliance for Audited Media.

Us magazine was founded in 1977 by The New York Times Company in the vein of Time Inc.’s People magazine, but the

company sold Us three years later. “Never acquire a company that you’re embarrassed to tell your mother about. Or start a

publication, in this case,” Arthur O. Sulzberger, the newspaper company’s previous publisher, once said about Us. “It really

isn’t our line of work, and we weren’t very good at it.”

Wenner Media bought Us in 1985 and turned it into a weekly from a monthly in 2000 to compete more directly with People

and Entertainment Weekly, another Time Inc. magazine.

Us had a rough start as a weekly, however, and in 2001, Wenner sold a 50 percent stake in the magazine to the Walt

Disney Company for about $40 million. Five years later, Wenner Media borrowed $300 million to buy the stake back,

saddling itself with debt that has required significant annual payments.

Gus Wenner said that the proceeds from the Us Weekly sale would go in part toward repaying the company’s remaining

debt. (Wenner used $25 million from the $40 million Rolling Stone deal last year for a special payment on the loan,

according to credit reports.)

The sale of Us Weekly is the latest sign of Wenner Media’s struggles. Rolling Stone lost a defamation lawsuit in November

over a widely condemned 2014 article about allegations of a gang rape at the University of Virginia. The magazine still faces

another lawsuit related to the article.

Without Us Weekly and its 110 staff members, Wenner Media will be significantly smaller. The magazine brought in 65

percent of the $330 million that Wenner Media generated in revenue for the year that ended in June, according to a report in

October from Moody’s Investor Service. Rolling Stone produced 27 percent of the company’s revenue, and Men’s Journal

contributed 8 percent.

By selling Us Weekly, Wenner Media has further shifted its business away from print. Last year, it introduced Glixel, a stand-

alone site devoted to games, and the company has made a big effort to increase its digital advertising revenue to make up

for declines on the print side.

https://www.nytimes.com/2017/03/15/business/media/us-weekly-national-enquirer-american-

media.html?xing_share=news&_r=1

Why Newspaper Subscriptions are on the Rise

So much for the death of the newspaper industry. A recent Nielsen Scarborough study found that more than 169 million U.S.

adults now read newspapers every month, in print, online or mobile. That’s almost 70 percent of the population.

The New York Times picked up 130,000 new subscribers last November — 10 times their average monthly growth rate.

Subscriptions at The Wall Street Journal spiked 300 percent, the LA Times went up 61 percent and Vanity Fair picked up

13,000 new subscriptions in one day. The now-profitable Washington Post is hiring 60 new writers. NPR recently said that

“Big Newspapers Are Booming.”

Sure, those papers can thank the incoming president for some of their new business, but this isn’t just a political story. All

sorts of reader-supported publishers are enjoying a resurgence.

In the technology industry, for example, Jessica Lessin’s sharp, pointed (and subscription-only) The Information now has the

second largest team of tech reporters in Silicon Valley. Ben Thompson has several thousand readers who are happy to pay

him $100 a year for his excellent Stratechery newsletter.

Why are readers and publishers alike embracing paid subscriptions for content services over ad-based business models?

There are several reasons, but the dismal state of online advertising is a big one.

People hate ads. More than 80 million Americans will use ad blockers this year, costing digital media companies around $10

billion in revenue. And despite all the media industry talk about relevant “native advertising,” most of us are still drowning in

pop-ups.

It says a lot about advertising that many publishers are pitching its complete absence as a way of incentivizing paid

subscriptions. Even Google is doing it — take a look at YouTube Red. Ads have all sorts of other insidious effects, like

turning content providers into clickbait factories. Ex-Politico president Jim VandeHei calls it the “crap trap.”

Given that ads are terrible, and that ad revenue is notoriously inconsistent, what else is going on?

Ev Williams recently touched on this when he announced the staff shakeup at Medium: “We had started scaling up the

teams to sell and support products that were, at best, incremental improvements on the ad-driven publishing model, not the

transformative model we were aiming for. To continue on this trajectory put us at risk  —  even if we were successful,

business-wise —  of becoming an extension of a broken system.” Not surprisingly, Ev recently announced that Medium will

be launching a consumer subscription product this summer.

Given that ads are terrible, and that ad revenue is notoriously inconsistent, what else is going on?

At the same time that publishers are giving the broken ad system a hard look, there’s a whole new generation of consumers

who are comfortable subscribing for services — Spotify, Netflix, food boxes, productivity apps — as long as they stay timely,

relevant and focused. A quarter of millennials now read newspapers on a regular basis.

“The number of people with access to the Internet is huge and lots of niches are underserved right now because they’re not

broad enough for advertisers to care about,” says Ben Thompson.

All successful subscription services, from Adobe to Dollar Shave Club to the Weekly Standard, can take advantage of

predictable recurring revenue to stay razor-focused on their audiences, create distinctive new features (The New York Times

now has a sizeable revenue stream just from its crossword app) and avoid the commodification crap trap.

As Jessica Lessin says: “I still believe it’s much safer to build a business that doesn’t need any advertising to survive. Doing

so forces you to focus 100% on your value to your readers. It’s the only way to make sure that what the news publishers

deliver to readers in the future is smarter, more informed and more relevant than in the past.”

Sure, advertising is never going to go away, but as subscription services become the norm, readers and publishers alike are

starting to appreciate the dividends of a direct consumer relationship. The behavioral insight that comes with membership

plans and paywalls helps newspapers move away from empty calories like slideshow page views toward more valuable

engagement metrics like time spent.

“Making advertising a secondary — though still vital — revenue source is the most important strategic goal for most news

publishers,” says Ken Doctor of Newsonomics. “Reader revenue, if backed by sufficient high-quality content and good digital

products, proves far more stable than advertising.”

Of course, the newspaper industry still faces headwinds as it shifts from a print ad model to one largely driven by digital

subscriptions, but today’s consumers are increasingly comfortable with supporting smart services of all kinds. And that’s

good news for a healthy, independent press.

https://techcrunch.com/2017/03/04/why-newspaper-subscriptions-are-on-the-rise/

Sinclair Reportedly Near Deal for all Tribune Stations, Food Network Stake

Sinclair Broadcast Group’s pursuit of Tribune Media’s assets appears to be moving fast as the two companies are reportedly

near a deal for all of Tribune’s stations and cable networks.

The New York Post is citing several sources who say the companies are discussing a price of about $40 to $41 per share for

a deal that would include all 42 Tribune TV stations and Tribune’s stakes in the Food Network and WGN.

But Sinclair may only be willing to buy all of Tribune Media if it has to, and could look to sell off Tribune real estate holdings

and some stations after it completes the potential merger.

Jefferies analyst John Janedis said an outright sale of Tribune to Sinclair was less likely than Tribune agreeing to sell off

certain assets.

“While there are a lot of moving pieces, we think an outright sale to SBGI as a potential option in the press carries risk. While

the FCC will likely reinstate the UHF discount later this month, we also think it will ultimately be eliminated in late '17 &

uncertainty around grandfathering deals in the interim and the cap could be an issue,” wrote Janedis in a research note.

News of a potential deal between Sinclair and Tribune was originally reported earlier this month by Reuters and now it looks

as if the two parties are simply waiting for FCC Chairman Ajit Pai to change the ownership rules for broadcasters that cap

nationwide station reach at 39%.

According to Variety, Pai said the current media ownership rules are “antiquated” and that his agency is taking a close look

at them. While scaling back restrictions on TV station ownership is something the FCC has been discussing for a while now,

Pai cautioned that the FCC has made no “firm determinations” regarding the rules.

One particular rule in question is the UHF discount.

Last year, the FCC changed the UHF discount governing ownership rules for broadcast stations so that UHF stations would

now have to count 100% of their reach toward the cap, instead of the previous 50%. Broadcasters like CBS have urged the

FCC to reinstate the UHF discount before making any further reforms on the ownership rules.

Barclays analyst Kannan Venkateshwar wrote in a research note that broadcast regulations may not shift to the degree

many are hoping, and that UHF discounts may not be reinstituted if media ownership rules are changes.

But broadcasters like Nexstar feel that the FCC—under the guidance of Pai, a fan of light-touch regulation—are anticipating

a shift in the rules.

“Well, we do anticipate there will be deregulatory activity … as we roll through the year. Some things will happen sooner

than others. We're optimistic that the UHF discount will be reinstated and then an NPRM issued to discuss all ownership

rules, both local and national that the FCC I think will work through,” said Sook according to a Seeking Alpha transcript.

http://www.fiercecable.com/broadcasting/sinclair-reportedly-near-deal-for-all-tribune-stations-food-network-

stake?mkt_tok=eyJpIjoiTldFNE9UQm1ZbU5pTkRFeSIsInQiOiJUemhVRkpWY2lHREpGb2pKanBRanVwb3ExenFMV

If we Have too Many Grocery Stores, What Does the Future Look like for Publix and Kroger?

The problems plaguing department stores and other mall-based retailers — too many locations and declining foot traffic —

could be looming on the horizon for grocers like Publix Super Markets Inc. and Kroger Co.

From office supplies to clothing and accessories, retailers across the spectrum have shuttered physical storefronts in recent

years to concentrate on their best-performing locations and online sales. Grocers, for the most part, have been immune from

that dynamic, becoming the must-have anchor for new retail developments as a reliable way to draw regular foot traffic.

The new Publix in downtown St. Petersburg represents the future of physical grocery stores in some industry observers'

eyes. The new store features a re-engineered deli ordering station to make ordering subs and salads as smooth as possible.

But as online ordering takes off and grocers shift their focus toward prepared foods, some industry observers think that big-

box, traditional grocery stores could meet the same fate as department stores like Macy's Inc. (NYSE: M), which has been

struggling to rightsize its physical footprint for years.

"We've probably got two or three times as many supermarkets, or at least the square footage, as we need," said Jim Hertel,

senior vice president at Chicago-based food retailing consultancy Willard Bishop, an Inmar Analytics Co.

Several factors are behind that theory, Hertel said, from retailers like Target Corp. (NYSE: T) and Walgreens stepping up

their grocery offerings to grocers like Kroger and Publix trying out new formats.

Lakeland-based Publix is the largest private employer in the Tampa Bay region, with 36,400 local employees and more than

180,000 throughout the Southeast. Kroger, based in Cincinnati, is one of Publix's biggest competitors in metro Atlanta and

the Carolinas.

The new Publix store in downtown St. Petersburg — which is basically a restaurant attached to a grocery store— is an

example of the kind of store that will take center stage in the industry in the coming years, Hertel said. That 30,000-square-

foot store, with a large emphasis on prepared foods, will be the key to future growth, along with small-format discount

grocers like Aldi and Lidl, both of which have aggressive expansion plans in the U.S.

As those stores take off, Hertel believes grocers will slow their development of the traditional, 55,000-square-foot big-box

stores.

"That’s the part of the market that is most over-stored," Hertel said. "The growth is coming on the periphery."

'What are you doing with your square footage to adapt?'

In Hillsborough and Pinellas counties, there are 273 grocery stores, totaling 11.37 million square feet, according to data from

CBRE Group Inc. That's one grocery store for every 8,421 residents.

On average, it takes 20,000 people to support one grocery store, said Mark Thompson, managing director with Crossman &

Co. in Orlando, who specializes in grocer-anchored real estate.

By Thompson's count, Florida has around 1,700 grocery stores for a statewide population of 20 million people, or one store

for every 11,500 residents.

Tourists, Thompson says, make up the difference. While the state hasn't yet released final tourism numbers for 2016,

Florida was on pace to hit 115 million annual visitors as of November.

"Grocers are changing their formats to make adjustments for the needs of the consumer," said Thompson, who also runs

GroceryAnchored.com. "And they’re doing it faster than any other box retailer."

Many of those adjustments are centered on making fresh and prepared foods front and center. Lucky's Market, which is

backed by Kroger and on a major growth push in Florida, hosts in-store beer and wine tastings. Sprouts Farmers Market Inc.

(NASDAQ: SFM), which recently opened its first Florida store in Tampa, also boasts an impressive selection of prepared

foods.

Last year, Whole Foods Market Inc. (NASDAQ: WFM) piloted a food truck test kitchen at its flagship Austin, Texas, store.

Some Publix stores feature space for cooking classes and event planning services.

"I think that’s the story — what are you doing with your square footage to adapt?" Thompson said.

Becoming a destination

Paul Rutledge, a first vice president with CBRE in Tampa, recently visited the new Sprouts store in Tampa on "Double Ad

Wednesday" — the day that the grocer features overlapping weekly promotions.

"It was very, very busy," he said.

Sprouts is on a busy stretch of North Dale Mabry Highway in Carrollwood, in a shopping center where its biggest neighbors

include a Target store and DSW Inc.

Publix and a Wal-Mart Stores Inc. location are across the street.

It's not a terrible location by any measure, but it isn't one of the region's most in-demand retail corridors. When Trader Joe's

entered the Tampa Bay region in 2014, it did so with locations in South Tampa and St. Petersburg's Fourth Street North.

(Sprouts will open a South Tampa store just over a half mile from Trader Joe's later this year.)

For Rutledge, the crowds at Sprouts reaffirm his thoughts on the future of grocery: Becoming a destination, and even a

gathering place in some instances, will be key.

"It just goes to show you, the picture is more important than the frame," he said.

He points to Lucky's — a client of his — which he says is "hitting it out of the park" in Florida with its prepared foods and

events centered around beer and wine.

Like Hertel, he sees small-format specialty stores as growth instrument for grocers moving forward, particularly as

millennials age and exert their spending power. But it's not an easy format to nail, and as Thompson points out, it's one

that's ever changing to adapt to consumer tastes.

"That's why everybody is scrambling," he said. "There are changing plates under the Earth, and everything is moving."

http://www.bizjournals.com/tampabay/news/2017/03/15/if-we-have-too-many-grocery-stores-what-does-the.html

Unusual Weather Plays Havoc with Retailers

The cycle of good and bad weather that retailers often credit—or blame—for sales fluctuations will likely swing into the

negative in March as Tuesday’s Nor’easter disrupted travel and forced store and mall closings.

Bad weather is just another challenge for the apparel sector, which is already struggling with declining store visits and

downbeat sales. While home-improvement retailers led by Home Depot and Lowe’s have seen demand rise thanks to an

improved housing market, cold weather will likely hurt sales of lawn and garden goods in a key sales month.

March is forecast to be the fifth-coldest in 30 years, in contrast with March 2016, which was second-hottest on record, said

Bill Kirk, CEO and Co-Founder of Weather Trends International, which provides long-term weather foreacasts and advisory

services to the retail sector.

A SINGLE-DEGREE TEMPERATURE DROP CAN TRANSLATE INTO A 2% TO 3% HIT IN APPAREL SALES.

“That’s a huge negative,” Kirk said in an interview. A single-degree temperature drop can translate into a 2% to 3% hit in

apparel sales, he said. With a forecast that March temperatures in the eastern two-thirds of the country will turn 5 to 15

degrees colder than last year on average, the apparel industry alone could see a 15% to 45% weather-related sales decline.

More than 70% of the population lives in the eastern two-thirds of the country, he noted.

Planalytics, another weather consulting firm, estimated that March’s weather pattern will hurt apparel retail sales by more

than $500 million, with the apparel sector facing a $310 million downturn this week alone. (That said, the decline will be

partly offset by a roughly $208 million boost in sales of early spring merchandise in February, which Planalytics said was the

second-warmest February on record.)

“The bump in February, while good, was too early in the season to offset a weak March,” said Kelly Carroll, director of client

services at Planalytics. “It will be an uphill climb as we move throughout the spring season. The fact that the negative

conditions are focused in major markets where retailers have a large presence will work against them.”

The Northeast region represents 30% of the U.S. population, she said. It’s also among the biggest markets for retailers,

including T.J. Maxx parent TJX, Staples and Dollar Tree.

It’s not just apparel retailers that will see a big dent in sales. Carroll said the home improvement retailers will actually be the

hardest hit.

“March is their ‘Christmas season,’ when yard work and outdoor projects get going,” Carroll said, adding that the sector is

looking at about a $1.2 billion loss in sales versus the same week a year earlier. “They are no longer looking to sell snow

shovels, blowers etc.”

To be sure, retailers partly have to shoulder some blame for the weather-related hit as they tend to sell things before

consumers are ready for them. That’s despite the fact that the apparel industry, for instance, for years has promised to have

a “wear now” strategy to sell apparel when consumers actually have want them.

“Old habits die hard,” Candace Corlett, president of consultancy WSL Strategic Retail, said. “Retailers are used to buying

months in advance of the season and that inventory arrives and needs to go somewhere. Shoppers do like to buy in

anticipation [of] a season, and retailers need to figure out just how far forward to go. Current practices put them foolishly

ahead—sandals in March may be too early in the Northeast.”

That said, consumers can expect to get some good bargains again, just when the weather turns warmer, spurring shoppers

to look for spring dresses and capris.

“Retailers’ selling season is out of sync with” consumers’ buying season, Kirk said. Stores typically ship goods two to three

months ahead of when shoppers want to buy. “You just build up too much inventory. There’s going to be a lot of markdowns

come April and May.”

https://retail.emarketer.com/article/unusual-weather-plays-havoc-with-retailers/58c84f34ebd400016cd37b7a?ecid=NL1014

The ad Fraud Issue Could be More than Twice as Big as First Thought — Advertisers Stand to Lose

$16.4 Billion to it this Year

The global online ad fraud problem could be costing advertisers more than twice as much as first estimated, according to

new research released on Tuesday.

A study commissioned by WPP ad agencies The&Partnership and conducted by ad verification company Adloox estimates

advertisers could be wasting $16.4 billion to fraudulent traffic and clicks manufactured by bots in 2017.

That is more than double the $7.2 billion the Association of National Advertisers estimated would be lost to ad fraud in 2016.

The World Federation of Advertisers, meanwhile, predicted last year that ad fraud will cost advertisers $50 billion by 2025,

describing the malpractice as an organized crime "second only to the drugs trade."

Adloox conducted its study across 200 billion daily bid requests, 4 billion ad calls, and 10 billion ad impressions a month,

over a period of 12 months.

Across the 200 billion bid requests, 50% were detected as being either non-human traffic (either a bot or a hijacked device)

or fraudulent traffic, which includes bad actors trying to spoof real web domains to attempt to pass off to ad buyers as

premium publishers.

Adloox estimated that nearly 20% of global digital ad spend in 2016 — or $12.48 billion — was wasted on fraudulent ad

placements.

The&Partnership founder Johnny Hornby said in a press release that the figures serve as a "stark reminder" that the industry

has a duty to come together to rid the digital ecosystem of the ad fraud problem.

He said in a statement:

"We have a duty to come together as an industry – from media agencies and industry bodies, to big-platform players like

Google and Facebook; bringing in government help if we need it – in order to protect our own future and those of our clients.

"Good work is already being done by many, including (ad industry bodies) the ANA, IAB, ISBA and the IPA, as well as the

recent combined efforts of TAG (Trustworthy Accountability Group) in the US and JICWEB (the Joint Industry Committee for

Web Standards) in the UK – but these new figures show that we need to move further, much faster. And there are concrete

steps we should all be taking to make that happen."

He added that advertisers too need to take responsibility by focusing on quality ad placements rather than cheap inventory.

Hornby said: "Clients likewise need to be willing to get themselves off the drug of cheap digital media and invest in proper

band protection. Pre-bid verification technology costs all of 3 pence per 1,000 impressions, accounting for about 2% of a

brand’s overall media spend – but, for all the diligent clients out there, there are still plenty of others who are refusing to pay

for it. If nothing else, this report proves what a false economy that is."

http://www.businessinsider.com/thepartnership-msix-and-adloox-ad-fraud-2017-2017-

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Will There be More Settlements with the FTC on Native Ads?

It’s been well over a year since the Federal Trade Commission (FTC) offered guidance on native advertising. But since then,

it has settled a big case with the retailer Lord & Taylor.

The FTC brought an action against Lord & Taylor in 2016, charging that the company deceived consumers by running

“native advertisements” that included a seemingly objective article in an online publication and an Instagram post. “Lord &

Taylor failed to disclose that these posts were actually paid promotions. We can expect the FTC to continue to aggressively

bring enforcement actions against marketers until there is a higher level of compliance,” said Adam Solomon, a partner in

the Advertising & Digital Media practice at Michelman & Robinson LLP in New York.

Solomon said that while brands find sponsored content that resembles a Web site’s native news highly effective, they have a

responsibility to ensure that consumers can differentiate between ads and other content.

Solomon said native and fake news are separate issues. “When you’re talking about native advertising, it’s something that

the FTC has provided pretty clear guidance on. From their standpoint, they need to make sure that if something is being

paid for that, in fact, it’s disclosed. It can’t be seen as news,” he said.

While some critics have suggested the FTC has been micromanaging by recommending that companies use the word "ad"

in disclosures, Solomon said: “I think that the FTC at times tries to provide very clear direction by using specific words like

‘ad,’ but there might be other ways to word it and provide disclosures to consumers so they understand what they’re looking

at.” Examples of words that can be used are “sponsored” and “paid.”

Solomon emphasized that the FTC doesn’t move at digital speed -- and that he expects more settlements to be reached.

“When the FTC does speak, it follows a road map of issuing guidelines, establishing a process, and then making

settlements. That’s their road map.” He said the Lord & Taylor case should be a “wakeup call” to the industry.

That said, Solomon believes compliance with the guidelines has improved.

Referring to a recent report by Media Radar that indicated that 37% of advertisers weren’t compliant with the FTC

guidelines, Solomon said: “A lot of publishers are familiar and comfortable with native. From an advertiser standpoint, there’s

a whole spectrum of companies that are not as experienced. I think there are a lot of advertisers that are just learning more

about it. The onus for compliance with guidelines is on the advertisers. The publishers can help expedite and make sure

whether they’re pitching something that is compliant,” Solomon said.

Solomon said he’s not aware of the FTC bringing enforcement actions in cases that are close calls. “The enforcement

actions I've covered have involved companies that didn't make any disclosures,” he said.

The FTC conducts investigations and it might issue a subpoena to a company to further the investigation.

“Transparency with the consumer is critical, and promotional pieces shouldn’t suggest or imply to consumers that they are

anything other than an advertisement. If a disclosure is necessary to prevent deception, the disclosure must be clear and it

must be prominent,” Solomon said.

http://www.mediapost.com/publications/article/297174/will-there-be-more-settlements-with-the-ftc-on-

nat.html?utm_source=newsletter&utm_medium=email&utm_content=headline&utm_campaign=101391&hashid=25V

Randall Family LLC to Sell the Frederick News-Post to Ogden Newspapers

Randall Family LLC announced on Wednesday it intends to sell The Frederick News-Post to Ogden Newspapers, a family-

owned media company that owns more than 40 daily newspapers across the country.

The deal would include The News-Post’s assets, including the newspaper and staff, printing press and building on Ballenger

Center Drive.

The Randall and Delaplaine families have owned and operated The Frederick News-Post for 134 years across five

generations. Ogden Newspapers dates to 1890, starting with the launch of the Wheeling News in Wheeling, West Virginia,

where the company remains headquartered.

Increasing challenges that come with owning a single-site media operation led to the decision to sell The News-Post to

Ogden Newspapers, Chief Executive Officer Will Randall said. Ogden Newspapers approached the Randall family about

three weeks ago, Randall said.

“This was kind of that happy medium between a large corporate company and a small family company,” Randall said. “I feel

good about this family maintaining our family legacy.”

The Nutting family has been interested in acquiring The News-Post for roughly three decades, Bob Nutting, CEO of Ogden

Newspapers, said Wednesday while addressing News-Post employees during a staff meeting with Will Randall and other

members of the Randall family.

“The reason we’re here is we think this is a uniquely good market,” Nutting said.

Nutting is hoping the sale will be closed by May 1, but said it might take until June 1. He said The Frederick News-Post will

keep its name.

“Independent newspapers are hard,” Nutting said. “It’s a tough business. We know it’s a tough business. We’re committed to

it, and we do believe there is a bright future. We wouldn’t be investing in it if we didn’t believe that.”

Ogden Newspapers owns more than 40 newspapers in 14 states, including The Journal in Martinsburg, West Virginia, and

The Northern Virginia Daily in Strasburg, Virginia. The company does not plan to move any News-Post operations outside of

Frederick County, Nutting said.

The Frederick News-Post would be the company’s first newspaper in Maryland. Many of its papers are in the Mid-Atlantic

region and upper Midwest.

This would be the third purchase for Ogden in about a year’s time. In 2016, Ogden acquired the Journal-World newspaper in

Lawrence, Kansas, and the Daily Herald newspaper in Provo, Utah.

Larry Grimes, the president of W.B. Grimes & Company of South Carolina, a newspaper broker, said the opportunity for

growth likely appealed to the Nutting family.

“I get the feeling they wanted [The News-Post] because the market is a dynamic one that continues to grow,” Grimes, who

lives in Gaithersburg, said in a phone interview after the announcement. “Demographics are high, household income is high

and there are more and more retail operations opening. Another reason is, The Washington Post doesn’t care about

Frederick County at all. Frederick is shielded from any competition in the market.”

Grimes noted the potential for the news operation to expand into Montgomery County.

“If I were [Bob], I would be looking very hard at northern Montgomery County and figuring out how to sell papers or develop

a product that covers that area,” Grimes said.

Montgomery County, which has about 1 million people, lost a countywide paper in 2015 when The Gazette folded. Nutting

said he had not explored that opportunity yet.

W.B. Grimes & Co. has brokered the sales of more than 1,500 newspapers in recent years. Grimes brokered a deal with the

Nutting family to buy The Northern Virginia Daily in 2012.

Grimes said he couldn’t speculate on the amount The News-Post might sell for. Nutting declined to discuss the financials

because Ogden is a private company.

Nutting’s daughter, Cameron Nutting Williams, 27, lives in Arlington, Virginia, and will be involved with the acquisition of the

paper and the transition in ownership. She is the fifth generation in the family-owned company.

The News-Post’s average print circulation in February was about 21,100 daily and about 22,500 on Sunday. There were

about 1,500 digital-only subscribers.

The News-Post has a circulation that falls in the middle of the top 12 biggest papers owned by Ogden, Nutting said. He said

he was committed to keeping The News-Post a print product while also addressing the company’s digital needs.

“This one, for me, feels like a growth opportunity,” Nutting said.

Under Randall, The News-Post operated with an open-book management policy regarding the company’s finances. Randall

declined, however, to provide numbers explaining the newspaper’s financial status, saying he wanted to respect Ogden’s

policy to operate with less transparency about specific numbers.

Randall Family LLC will remain active in Frederick County as an investment and management company, according to

Randall.

The sale of the newspaper is the company’s formal exit from the news industry. Randall said he would stick around after the

sale to help in “whatever way is appropriate” with the transition of the new company.

The newspaper will continue to be involved in community events, Nutting said.

Nutting said there is a good opportunity for substantially expanding the press operations.

The News-Post has more than 130 full-time employees throughout the company, including the newsroom and press

operation.

Nutting said there are no plans for any staffing changes or cuts, but current employees will go through interviews for their

jobs.

Nutting is also the chairman of the board and majority owner of the Pittsburgh Pirates.

The Nutting family is also the majority owner of Seven Springs Mountain Resort and Hidden Valley Ski Resort in southwest

Pennsylvania.

Nutting said he spends more than half his time overseeing the sports and hospitality aspects of the family’s business. He

has served as chairman of the News Media Alliance, a media trade organization, and is a past president of the West Virginia

Press Association.

https://www.fredericknewspost.com/news/economy_and_business/services/randall-family-exploring-sale-of-frederick-news-

post-to-ogden/article_99957474-438b-5b6a-b715-528995c8ecdc.html

Minn. Newspaper Uses Empty Front Page to Show Community Connection

Readers picking up the Tuesday edition of the Warroad Pioneer didn't have much to read on its front page, but the weekly

publication found an unusual way to say why its community and local newspapers are important to each other.

The front page of the 115-year-old newspaper was blank with the exception of its nameplate, a banner ad and a paragraph

explaining how community newspapers keep locals aware of news, using the words "Without you, there is no newspaper!"

The page also carried the quote, "I'm a reflection of the community," attributed to the late rapper Tupac Shakur.

Publisher Rebecca Colden said she and her staff wanted to show readers the Pioneer relies on the state's northern border

community just as the community relies on the publication for news, adding the weekly "really is the people's newspaper."

"We just really wanted to show that people do rely on local newspapers," she said. "We have readers that are just

passionate about getting their paper every week."

Columns and news articles were featured in the pages of the paper, but the publication used its second page to present

facts about the newspaper, including a graph on production analysis and letters from readers. One called the paper "the

front door of a community.

The Pioneer noted it has made significant cuts over the last five years to offset rising production expenses. The Warroad-

based publication has four full-time and three part-time employees, compared with 10 workers about five years ago.

About 80 percent of the paper's revenue comes from selling advertising, which has declined by $23,900 since 2011,

according to the newspaper.

Colden has been told readers drift toward social media for free news and that the newspaper industry is dying. Colden said

she doesn't see that.

"We're trying to get across ... that we're not a dying breed, and there are people behind us," she said.

The Pioneer uses different media, including social media, to reach different audiences and to help other businesses, such as

when it hosted an online auction.

The newspaper has about 1,200 subscriptions, but Colden said the number of people reading the newspaper well exceeds

those figures: People may pick up a paper off the stands or read it at the library and other places.

"We're a united force in small towns," she said. "Let us be your cheerleader."

Warroad has about 1,800 residents and is roughly 90 miles northeast of Thief River Falls.

https://www.duluthnewstribune.com/news/4235314-minn-newspaper-uses-empty-front-page-show-community-connection