business news in context, analysis with attitude

  • The Philadelphia Inquirer reports that McDonald's is testing one of its Bistro Gourmet units in Marlton, Pennsylvania, with plans to open additional stores in the format in Berwyn, Pennsylvania, Cape May Court House, New Jersey, and Glasgow, Delaware.

    The Bistro Gourmet format features granite counters, special lighting, classical music, and a made-to-order menu that includes grilled vegetable panini, espresso and hand-dipped ice cream in addition to McDonald's traditional fare. The goal, according to the paper, is to figure out how McDonald's can better compete with "fast casual" restaurants such as Panera Bread and Cosi.

    McDonald's already has Bistro Gourmet units operating in a number of markets, including Orlando, New Orleans and San Diego - most of which have generated sales growth of between 10 and 20 percent a year.

  • Bloomberg reports that in an effort to better compete with Lowe's, Home Depot is experimenting with a 176,000-square-foot store n Atlanta that sells - in addition to its traditional merchandise - "everything from children's bedsheets with Disney characters to motor oil to Dunkin' Donuts."

    In addition, Home Depot has spruced up the décor by waxing the floors, improving the lighting, improving the signage, and posting "Buyer's Guides" that help consumers choose the right product for specific needs.

    Bloomberg notes that "remodeling has become urgent as Home Depot, with almost 1,700 stores, runs out of room to expand in the United States. While the company may continue to open about 200 stores this year, the chain will need to slow U.S. expansion as it saturates its biggest markets." And that means identifying new opportunities and new format with which it can appeal to consumers.

KC's View:
We're cynical. We think you have to make more than cosmetic changes in these cases. You have to have a change of heart and soul.