This Is Where We Get Into Therapy

In the latest 21 Hats Podcast episode, our business owners discuss things business owners don't often talk about in public.

Good morning!

Here are today’s highlights: Inflation isn’t as bad as it looks. Retail workers are finding higher paying jobs. And now there’s a shortage of chicken wings.

THE 21 HATS PODCAST

Episode 65: This Is Where We Get Into Therapy: Once again this week, our business owners discuss things business owners don’t often talk about in public. Laura Zander says she feels guilty about taking vacations, about making more money than her employees, and about knowing that her husband is closer to their son than she is. Paul Downs says he recently reviewed 29 years of P&Ls and was reminded that he lost money in 18 of those years. He also explains why he routinely tells his employees (and us) precisely how much money he takes out of his business. Jay Goltz, meanwhile, says he’s now embarrassed to be called a CEO and acknowledges that he’s thought maybe he should have worked 20 percent less while building his business, but isn’t sure if that would have resulted in 20 percent less revenue or perhaps 100 percent less revenue. This week, we also set a podcast record for use of the phrase, “Oh, my God!”

OPPORTUNITIES

Despite fearing the worst last year, craft distilleries actually expanded thanks to a combination of federal aid, consumer demand, changes in state regulations and a reduction in federal liquor taxes: “The number of craft distilleries climbed to 2,265 last year, a nearly 11 percent increase, according to a report from the American Craft Spirits Association, a trade group. Annual national sales reached $6.1 billion in 2019 and are expected to have increased in 2020. As the sector grows, craft distilleries are becoming more creative, expanding their business model by adding entertainment, recreation and lodging in an effort to offer a broader experience for visitors.”

  • “When it is completed next year, Dant Crossing will include a 7,300-square-foot restaurant, a 22,000-square-foot events venue, bed-and-breakfast lodging, a 2,000-seat amphitheater, a trail around a 12-acre lake and, of course, a 21,000-square-foot distillery capable of producing 15,000 barrels of bourbon annually.”

  • “After years of consideration and debate, Congress approved legislation that helped small producers by lowering the federal tax for the first 100,000 gallons of alcohol to $2.70 a gallon from $13.50.” READ MORE

HUMAN RESOURCES

Retail workers are quitting for higher paying jobs: “Americans are ditching their jobs by the millions, and retail is leading the way with the largest increase in resignations of any sector. Some 649,000 retail workers put in their notice in April, the industry’s largest one-month exodus since the Labor Department began tracking such data more than 20 years ago. Some are finding less stressful positions at insurance agencies, marijuana dispensaries, banks and local governments, where their customer service skills are rewarded with higher wages and better benefits.”

  • “Sectors like real estate, professional services, banking and insurance are also hiring — often at higher wages than retail, where median hourly pay for store employees hovers around $13 — in anticipation of renewed demand, according to Julia Pollak, a labor economist for the site ZipRecruiter.”

  • “‘It was a really dismal time, and it made me realize this isn’t worth it,’ said 23-year-old Aislinn Potts of Murfreesboro, Tenn., who left her $11-an-hour job as an aquatic specialist at a national pet chain in April to focus on writing and art. ‘My life isn’t worth a dead-end job.’” READ MORE

THE ECONOMY

Inflation isn’t so concerning if you compare today’s prices to 2019’s prices: “As consumers deal with starkly higher prices than a year ago, the Federal Reserve has maintained its stance that high inflation, the increase in the price consumers pay for goods and services, isn’t expected to last very long. ... And while inflation’s 13-year high, as measured by the annual change in the consumer-price index from a year earlier, has caused concern, the central bank restated its belief that the rise in prices is ‘largely reflecting transitory factors.’”

  • “Another much-discussed consideration is the importance of the so-called base effect, which is the outsize impact when comparing change from one year that was unusual to the next. This can be caused by an economic anomaly—like last year’s pandemic lockdown, when prices dropped.”

  • “The base effect can be illustrated by calculating price changes from two years prior, instead of one year prior, and annualizing those figures. That adjustment puts inflation from pre-pandemic levels at 2.5 percent, rather than 5.0 percent, which is closer to the Fed’s 2 percent target rate.” READ MORE

MARKETING

Google has some new offerings for businesses: “Among the new offerings are ones aimed to make it easier to find and connect with customers. One is a tool that simplifies how businesses create video ad campaigns on YouTube. And through the end of September, Google will be offering Pointy, a point-of-sale system add-on that shows in-store product inventory online, for free to small businesses. Google also is releasing new features for managing your company's online presence. The search and maps products will enable retail, food, and local services businesses to adjust how they appear and connect with customers, such as listing more specific services, sharing digital menus, and taking food orders.”

  • “Businesses that have product pages on Shopify, WooCommerce, GoDaddy, and Square will now be able to display them on Google without paying commission fees.”

  • “Google for Small Business, a free digital toolkit for developing an online presence, will be expanded to include recommendations by business type: restaurant, retail, or services.” READ MORE

REOPENING

The grocery boom lives on: “The situation has confounded analysts, who expected robust grocery-store sales to diminish as the year progressed and as vaccinated Americans returned to offices, restaurants and travel. It can’t be explained by inflation, because grocers are also returning to their normal practice of discounting, which partially offsets the price hikes they’re taking elsewhere. Sales of groceries on a unit level, which exclude the effects of inflation, have held steady.”

  • “One reason for the sustained lift in grocery sales is that online ordering has made it easier for shoppers to buy more, with curbside pickup and home delivery removing the hassle of lugging items through the store and checkout.”

  • “Around one quarter of adults said they do all or most of their food shopping via ecommerce, up from 14 percent  last year, according to Coresight Research.

  • “Keeping pantries more fully stocked than normal reflects ‘some underlying caution and perhaps some ingrained habits from prolonged stay-at-home behaviors.” READ MORE

New York City is confronting a lasting economic toll: “As the national economy recovers from the pandemic and begins to take off, New York City is lagging, with changing patterns of work and travel threatening the engines that have long powered its jobs and prosperity. New York has suffered deeper job losses as a share of its work force than any other big American city. And while the country has regained two-thirds of the positions it lost after the coronavirus arrived, New York has recouped fewer than half, leaving a deficit of more than 500,000 jobs.”

  • “Boarded-up storefronts and for-lease signs dot many neighborhoods. Empty sidewalks in Midtown Manhattan make it feel like a weekend in midweek. Subway ridership on weekdays is less than half the level of two years ago.”

  • “The city’s economic plight stems largely from its heavy reliance on office workers, business travelers, tourists and the service businesses catering to all of them.”

  • “Even if just 10 percent of Manhattan office workers begin working remotely most of the time, that translates into more than 100,000 people a day not picking up a coffee and bagel on their way to work or a drink afterward, said James Parrott, an economist with the Center for New York City Affairs at the New School.” READ MORE

LOGISTICS

Now there’s a shortage of chicken wings: “Chicken wing prices are going through the roof. So Wingstop, a chain known for, well, wings, is now selling chicken thighs. But getting Americans on board could be a challenge.On Monday, the restaurant launched a virtual brand called ‘Thighstop’ which serves crispy thighs, with or without sauce. The menu also includes breaded boneless versions of the product. Though the Thighstop brand is digital-only — available on the company's website or through DoorDash but without dedicated stores — customers can order from the ‘Thighstop’ menu through their phones at a Wingstop location, where all orders are filled. For Wingstop, thighs are a better deal than wings.”

  • “During the pandemic, when restaurants closed their dining rooms and focused on delivery options, chicken wing sales soared. At Wingstop, sales at U.S. stores open at least a year grew about 21 percent in 2020.”

  • “‘The [wholesale] price of wings a year ago was as low as 98 cents,’ per pound, Charlie Morrison, Chairman and CEO of Wingstop Restaurants Inc., told CNN Business. ‘Today, it's at $3.22. So it's a meaningful difference.’ Thighs, on the other hand, are ‘much less expensive,’ he said, coming in at about half of what wings cost per pound today.” READ MORE

EDITOR’S NOTE

Here’s a quick update on a few things we’ve been working on at 21 Hats: First, we are exploring partnerships with companies that want to reach our audience. In recent months, we’ve been hearing from some of you who have asked about ways to include your messaging in our newsletter, podcast and newly designed website. We have created a few programs that we think will provide value to our readers and help 21 Hats generate revenue so we can expand our coverage and offerings.

Along those lines, I’m delighted to introduce Randy Davidson, who is based in Atlanta and has built several digital media companies. Randy will be in charge of strategic partnerships at 21 Hats. He’s also helping me plan an event to bring our followers together—in person—for a 21 Hats In The Trenches Summit to be held in October in New York City. We are seeking sponsors and supporters for the event, which will feature a podcast taping, interviews with entrepreneurs, and the opportunity to connect with others in the 21 Hats community.  

Please let us know if you are interested in learning more about how we can help your company engage with our audience and how you can help us support entrepreneurs.

-- Loren (loren@21hats.com) and Randy (randy@21hats.com)