business news in context, analysis with attitude

• The Washington Post has a story about Starbucks' mobile advantages; while we've already referenced the phenomenon here on MNB, it is worth mentioning it again because of the degree to which the mobile strategy has been successful...

"The company said this week that, on average, customers pay for a purchase using smartphones 7 million times per week, with mobile payments now accounting for roughly 16 percent of total transactions ... Critical to the success of Starbucks's mobile payment platform is its integration with the My Starbucks Rewards program, which allows shoppers to earn special discounts and freebies." The story goes on to say that "Starbucks has bigger ambitions for mobile shopping in 2015. This year, customers will be able to place orders through their mobile app, a feature that the company believes will cut wait times at the counter."

However, the Post also makes the entirely legitimate point that this experience may not be transferrable to other kinds of retail: "That's because it's a business that often is deeply entwined with its customers' daily routines: Maybe it's their first stop in the morning before they drop the kids off at school, or maybe it's the place they go at 3 p.m. when they need a pick-me-up at the office. Much like a grocery store, customers go there often and can clearly see the upside of joining the rewards program.

"A retailer that gets less frequent visits, such as an electronics or furniture store, is going to have a more difficult time luring customers into its smartphone and loyalty program ecosystem, simply because it has so many fewer chances to do so."

• The Pittsburgh Post-Gazette reports on how Giant Eagle plans to cross the border from Pennsylvania into Indiana this fall, with a Market District store as well as a GetGo convenience store, in the Indianapolis area.

The story suggests that the Market District format is a strong one for Giant Eagle to lead with: "The Market District stores with their special offerings have become a destination, drawing shoppers from a wider area than the company’s traditional supermarkets, said Tom DeVries, senior vice president of the O’Hara grocer’s Market District division. He expects that magnetic ability will help the new store find its customer base in the competitive Indianapolis market, where the local newspapers have been reporting on a wave of store openings by grocery chains."

• The New York Times reports that "some McDonald’s workers who say they were fired because of their race are suing the company, accusing it of dodging responsibility for the discrimination and harassment they say they endured. The workers said in a federal complaint filed on Thursday that about 15 African-American employees of some southern Virginia restaurants run by Soweva were fired last May after several white employees were hired."

What makes the lawsuit interesting from a national perspective is that the lawsuit attempts to cast McDonald's as a co-employer with the franchised unit, a designation that the corporation resists. The National Labor Relations Board (NLRB) agrees with the employees making the claim, and if the lawsuit is resolved in favor of that co-employer concept, it creates a whole new world of issues for franchising companies and franchisees alike.
KC's View: