business news in context, analysis with attitude

This commentary is available as both text and video; enjoy both or either ... they are similar, but not exactly the same. To see past FaceTime commentaries, go to the MNB Channel on YouTube.

Hi, I'm Kevin Coupe and this is FaceTime with the Content Guy.

Well, I'm back in my kitchen ... after a five week run of FaceTime videos that were shot in Washington State and California, looking at some fascinating retailers. They ranged from Kroger's Main & Vine format to the new Starbucks Roastery & Tasting room, from the Grand Central Market in Los Angeles to the sublime Northgate Gonzalez Market in Norwalk, California.

In each case, these food retailers are doing their best to create environments designed to encourage people to leave home, to see these stores as attractive and compelling alternatives to e-commerce, not to mention bricks-and-mortar competitors. That's not all they were designed to do, of course, but to me, that was the subtext of each of these visits.

This is really important. But I also think there is something else that retailers need to pay attention to - the fact that so many millennials, who soon will be the center of the consumer target for many retailers, simply are going to have less money to spend on food than one would hope.

I was just reading a study from WalletHub saying that many college graduates have to spend 18 percent of their salaries on student loan payments; for the record, some experts say that to spend 10 percent of your salary on student loans is "excessive." Many of these people are going to carry these loan payments into their forties, which is going to have an impact on how much they can spend on houses, cars, having children, and yes, even food. (How the hell are they going to send their kids to college? These are dominos that will continue to fall, and the economic noise it is going to make will be deafening.)

Here's another alarming statistic - more than 40 percent of these people are going to be unable to keep up with their debt payments.

Let's put the political part of this aside ... though I'm more than willing to say that this requires some sort of government attention beyond "we're going to make the economy grow so that these folks have more money." And, "We're going to make public college free for everyone" doesn't sound to me like any sort of reasonable or attainable solution. I'm not a single issue voter, but this is right up in the top five or six for me.

As retailers develop formats and strategies, I think it is critical to keep this nightmare scenario in mind. Yes, it is critical to offer differential and distinct advantages ... but also to keep in mind that customers simply may have less money to spend. That doesn't mean that they won't want to indulge themselves, that they won't be interested in cool and unique products. It just means that there will be competing impulses, and it is better to embrace the challenge than not.

This also means that if you are a traditional retailer who believes that just having been in business for decades and having a 'loyal" customer base will leave you immune to the challenges of companies like Aldi and, soon, Lidl, you are delusional.

For me personally, this study has a lot of resonance. I was fascinated to see that the Connecticut community where I live is ranked among the 2500 places in the nation looked at by the study as one where the ratio of student debt to median adult income is the lowest ... and it is still 18 percent. Ironically, the community identified by the study as having the worst ratio is just 130 miles southwest of me ... Voorhees, New Jersey, a suburb of Philadelphia, where debt accounts for 174 percent of the median income of adults aged 25-44.

I cannot imagine even getting up in the morning facing that kind of student debt.

Now, we've been extraordinarily lucky. My youngest child, my daughter, graduates from college in about nine days ... and she walks into the world without any student debt. (She also walks into the world without a job. She's a criminal justice major, a member of the National Criminal Justice Honor Society and a dean's list student .. so if you have any ideas or contacts, especially with the FBI, CIA or Homeland Security, let me know.)

The financial pressures facing so many of our college graduates is both a national security issue and an economic problem that needs to be addressed. And the sad likelihood is that it may never be addressed at the public policy level that it deserves, simply because our politics are so toxic that coming to any agreement on anything is practically impossible.

So businesses are going to have to figure out how to deal with it on their own. It means having differentiated stores, but also have a differentiated mindset ... because the challenges they face in the very near future will be significant and potentially even crushing.

That's what is on my mind this Thursday morning. As always, I want to hear what is on your mind.

KC's View: