Monday AM October 15th, 2007
by: Ed Mayberry, October 15, 2007 12:10:00 am
The operations chief at Chick-Fil-A spoke to students at the University of Houston as part of its Leadership and Ethics Week at the Bauer College of Business. Dan Cathy is a second-generation leader in the family business that racked up $2 billion in sales last year through 1,340 franchises.
”Well, 61 years ago my father opened up a small little restaurant called the Dwarf Grille. That was back in the days of the drive-ins, when car hops would be running out there to your car. And we opened up a restaurant like that in 1951. But it’s emerged and migrated today with the busy lifestyles of people. As we began to expand beyond shopping mall locations, which is our first entrance into the Houston market back in the 70’s and 80’s, that as we began to open free-standing restaurants, the drive-though component was a very integral part of the expectation that the customers have had.” Ed: “Why was the decision to go to malls first?” “I’d like to tell you that we did a sophisticated study, saw the emerging of new forms of retailing in closed regional shopping malls, but to be quite honest with you, the reality of it for us was that my aunt—my dad’s sister—had a gift store in a regional shopping mall called Greenbriar Mall in southwest Atlanta. And she said to her brother Truett, she says ‘Truett, you need to open up a restaurant out here. Six little desk stools that you could sit at there. Well, the response was so overwhelming that we had people sitting in the mall up and down the mallway, hallways there, on the floor.”
Chick-Fil-A has gotten mileage from its “Eat Mor Chikin” cow campaign.
”Well, it’s been going for about 12 years now, developed right here in the state of Texas by the Richards Group in Dallas, Texas. It has been a great campaign, in fact, a couple of weeks ago was inaugurated into the Madison Avenue Hall of Fame as it relates to marketing icons. This was voted on by over a million voters on an online survey that had taken place. So it’s been a great campaign. It’s given a new couple words that describe our brand unexpectedly fun, by the whimsical style of these cows that say ‘eat mor chickin.’ They don’t spell very well, but they are certainly motivated and seem to endorse the consumption of chicken on behalf of the bovine population. Some of the billboards are 3-D billboards that you might see around, but in our cow calendar, for instance, that’s a major video profile story that’s frequently shown on the six o’clock news, if it’s a slow news day, where we actually put spandex on these cows dress them up in other costumes as featured in our cow calendars that come out each year. It’s recognized as the largest-selling calendar in the world—the Chick-Fil-A cow calendar, actually outselling the Sports Illustrated swimsuit calendar.”
Chick-Fil-A continues its tradition of being closed on Sunday, just as the founder of the chain decided years ago.
Rising wholesale prices of food and energy were behind a 1.1 percent jump for the Producer Price Index in September. Excluding those volatile factors, the so-called core PPI was up a tame 0.1 percent. The increase reported by the Labor Department was caused by a more than four percent increase in energy prices last month, including an even bigger increase in gasoline costs. Over the previous 12 months, wholesale prices have risen about 4.5 percent, while the core has surged 2 percent.
Rising auto and gasoline sales helped to fuel a better-than-expected reading for retail sales last month. The Commerce Department says retail sales rose six-tenths of a percent over August. Excluding autos, sales were up four-tenths percent. Retail chains released their monthly sales numbers Thursday, and they were generally lackluster. Several companies said their profits are suffering. Unusually warm weather was blamed for dampening demand for fall clothing. The housing slump is also cited as a negative factor.
The government says China's September trade surplus soared to its fourth-highest monthly level on record. The jump comes amid strong demand for its exports and adds to pressure on Beijing to take action on market barriers and loosening currency controls. The nearly $30 billion surplus reported by the Commerce Ministry was an increase of 56 percent over the September 2006 gap of $15.3 billion. The Chinese government says it is not actively trying to inflate its trade surplus, but some American lawmakers are pressing for sanctions if Beijing fails to take faster action to ease currency controls that they say are fueling the trade gap.
Food and Drug Administration officials and their Chinese counterparts are trying to put the final touches on a plan to ensure the safety of products Beijing exports to the United States. FDA Commissioner Dr. Andrew von Eschenbach declined to discuss specific steps that China has agreed to take. But he did say that Chinese health officials will be in Washington later this month to complete details of a “memorandum of agreement'' between the two countries. Chinese food and other products ranging from seafood to toothpaste to toys are under intense scrutiny because they have been found to contain potentially deadly substances.
A Texas insurer of last resort has so many people relying on it that the fund likely wouldn't have enough money if a catastrophic hurricane hits. The state-chartered Texas Windstorm Insurance Association could tap several other money sources if a major storm hits. But the Associated Press reports not everyone likes the arrangement, and it could lead to taxpayers footing the bill. Jerry Johns with the Southwestern Insurance Information Service says it's “simply a train wreck waiting to happen.'' Association General Manager Jim Oliver says the fund generally keeps $80 million to $100 million available to pay claims. The fund also covers losses from thunderstorms and hail. The fund puts profits from past years premiums into a reserve account. Beyond that, Oliver says the association has several tiers of funding it can use if wind claim payments rise significantly--including a reinsurance policy. If private companies end up paying the tab, they can--in turn--seek tax credits from the state. Reliance on the association has jumped since Hurricanes Katrina and Rita hit in 2005. It was created by the legislature in 1971 a reaction to the hurricanes of the 1960s, as an insurer of last resort for wind damage to property along the Texas coast. Recently, it has become essentially the only source for windstorm insurance in many communities because private companies have pulled out of the market. It insures residences and businesses, with $61 billion in coverage currently in place.
Harbinger Capital Partners has settled a fight with Asarco over access to the mining company's financial records. The agreement could open the way for the hedge fund to finance Asarco's exit from bankruptcy protection. Details are in papers filed in bankruptcy court in Corpus Christi. Asarco says it has changed the terms of a confidentiality agreement that potential investors are required to sign. Harbinger previously called the agreement too restrictive. The Tucson, Arizona, mining company had required investors to speak with only the full creditors committee or its representatives. Investors could speak with individual creditors only with Asarco's permission. Harbinger balked at those terms. An Asarco attorney couldn't immediately be reached for comment. Asarco's facility in El Paso closed some years ago.
Uranium Resources plans to build a uranium mill at Ambrosia Lake, 20 miles north of Grants, New Mexico. The Texas-based company says the mill would employ more than 200 people and could process up to 8,000 tons of uranium ore per day. The mill would process ore mined from the Ambrosia Lake region. Uranium Resources says it has agreed to buy Rio Algom Mining and a mill license from BHP Billiton for about $126 million in cash. Uranium Resources said it will pay $110 million for Rio Algom, whose assets include New Mexico properties with 20 million pounds of U-308 uranium ore. The company will pay about $16 million for a Nuclear Regulatory Commission license to build and operate the mill.
Upscale retailer Neiman Marcus is marking its glitzy past with a look into its high fashion future. Dallas-based Neiman Marcus is celebrating its 100th anniversary and executives have unveiled a hint at what's to come. The luxury company has asked leading designers to create what they see as the future of fashion. The results include everything from a black and white sequined pantsuit embellished with an enormous bow by Giorgio Armani, to a silvery evening gown from Valentino. The items are on display at the company's flagship downtown Dallas store. The creations from 24 designers are part of a shimmering display among jewelry and purses on the ground floor, with many of the designs rotating to show all of the angles. The exhibits will be on display through November 3rd.
The U.S. Agriculture Department says the nation's wheat stockpiles may shrink to the lowest level in 59 years. That's due to robust demand for the grain following two years of weak harvests worldwide. The USDA projects wheat supplies for the 2007-2008 crop year will fall to 307 million bushels, down 55 million bushels from its estimate last month. That's because of the fast pace of export shipments. Foreign appetite for the country's wheat has surged after poor weather damaged harvests around the world this year. Record-high prices have done little to dampen demand. The USDA also raised its expectations for corn production this year and pared down its estimates for the soybean crop.
The IRS appears to be having trouble giving money away. Investigators say taxpayers only collected about half of the $8 billion phone tax refund the Internal Revenue Service expected to hand out this year in the most far-reaching refund in IRS history. After losing several lawsuits disputing the legitimacy of the tax, the IRS instituted a program to refund the three percent tax paid on long distance or bundled service from March 2003 to July 2006. The tax agency estimated that the one-time refund would affect between 145 million and 165 million individual taxpayers, including many who normally do not need to file tax returns. But according to the Treasury Inspector General for Tax Administration, the IRS had repaid just over half of the over-collected tax as of August.
Major airlines have agreed on a standard that will allow travelers to check in using a bar code sent to their wireless device. When the system is deployed the International Air Transport Association says passengers will be able to register their cell number when buying a ticket and receive a bar code by text message. The Geneva-based group represents most commercial carriers. Check-in staff will scan the bar code directly from cell phones, doing away with the need for a boarding pass. Alternatively, passengers can receive tickets from e-mail and print it out.
The “No Nukes'' campaign of musicians from the 1970s lives again. Bonnie Raitt, Jackson Browne and Graham Nash are waging a campaign to stop Congress from giving loan guarantees to the nuclear power industry. They plan to deliver a petition to Congress on October 23rd. The petition has already been signed by Pearl Jam, Melissa Etheridge, System of a Down, the Indigo Girls, Maroon 5, the Dixie Chicks, Shawn Colvin, Los Lonely Boys and Michelle Branch, among others. Raitt, Browne and Nash were part of the “No Nukes'' concerts in 1979.