A second look at a third high school, sudden departure of a chicken chief, Barling’s liquor request and the potential contest between Hillary and Huckabee are part of the Feb. 28 Friday Wire for the Fort Smith region.

NOTES & ANALYSIS
• A second look at a third high school
Kudos to the Fort Smith Public School Board of Directors for agreeing to a request by a group of Fort Smith business leaders to conduct more due diligence on how to best respond to the future facility needs of the public school system.

Plans for a third Fort Smith high school have been discussed for some time, though a formal pitch for the more than $65 million high school was made at a January school board meeting.

At the time, Dr. Benny Gooden, superintendent of schools, said the district needed a new high school due to continued enrollment increases in the district coupled with an eventual plan to re-align the schools to have freshman be on high school campuses instead of the current configuration, which places freshman in the city's junior high schools.

The business group has expressed concerns not only about the necessity of a third high school, but about the future operational and administrative costs to the district of a third campus.

Let’s hope the due diligence is thorough, transparent and devoid of any bias used to push the initial recommendation. Fort Smith could use a healthy dose of efficiency, innovation and vision in at least one of its local government operations.

ICYMI
Following are a few stories posted this week on The City Wire that we hope you didn’t miss. But in case you missed it ...

• Sudden departure of CEO of O.K. Foods
O.K. Foods is under new leadership after the resignation of CEO Paul Fox, but the company is keeping quiet as to why Fox may have left the company. Donna Miller of O.K. Foods confirmed in a telephone call with The City Wire that Fox had resigned from the company, but declined to provide details or the date his resignation became effective.

• Business friendly discussion
Development and business friendliness took center stage for much of a more than hour long brainstorming session of the Fort Smith Board of Directors on Monday night (Feb. 24). The session, which was absent a set agenda in order to allow a free flow of ideas among Board members and the administration, started with City Director Keith Lau simply asking what the city could do to make it easier for citizens needing to do business with the municipality.

• Energy overregulation warning
A U.S. Chamber of Commerce official warned an Arkansas audience that overregulation of fracking practices in the oil and gas industry could cost jobs, tax revenue, and the overall economy.

NUMBERS ON THE WIRE
2016: The original start date for Whirlpool's remediation of a toxic plume of trichloroethylene (TCE). The company is under a remediation plan by the Arkansas Department of Environmental Quality and notified the agency this week that it would speed up its remediation schedule by two years, starting chemical injections to neutralize the cancer-causing TCE within weeks.

$12.716 million: Revenue from Arkansas’ 2% tourism tax set a record in 2013 by reaching $12.716 million, and the state’s tourism chief is predicting that 2014 could be even better for Arkansas’ tourism and travel sector. The 2013 collections were up 2.5% compared to the $12.405 million in 2012, and well ahead of the $11.378 million slump in 2009 when national economic conditions proved tough on Arkansas’ tourism industry.

6.55%: Increase in number of January home sales in Arkansas’ four largest metro markets compared to January 2013, according to The City Wire’s Arkansas Home Sales Report.

OUTSIDE THE WIRE
• Hillary and Huckabee
The likely 2016 matchup in Iowa if the race were held today would be former Secretary of State Hillary Clinton against former Arkansas Gov. Mike Huckabee, with Clinton ahead, according to a new poll. The former first lady and senator leads all her potential Republican challengers by at least 4 points. She tops Huckabee 46% to 42%, Bush 45% to 41%, Paul 47% to 42% and Christie 45% to 39%.

• Bill and Hillary papers
The Clinton Presidential Library will make its first release on Friday (Feb. 28) of records that were previously withheld from the public under legal provisions that expired early last year, a spokeswoman for the National Archives said. About 4,000 to 5,000 pages will be put online at 1 P.M. Friday, with paper copies becoming simultaneously available at the library in Little Rock, the spokeswoman said. More releases are expected in the next couple of weeks.

• Tough path for states seeking Medicaid expansion
Of the 25 states that already have expanded Medicaid under the Affordable Care Act, all but Arkansas, Iowa and Michigan simply added newly eligible adults to their existing Medicaid programs. That was the easiest approach. In contrast, the states that haven’t yet expanded Medicaid but are considering doing so want to tailor the program to fit their own priorities—and that will take time.

WORD ON THE WIRE
“I think we’re going to have a good season this year. I think holding on during the bad times was a victory. From what I can tell, if the weather will let us alone for a while, we’re going to have a good year. I think people are a little more sure about the economy. I think they’ve got a little money in their pockets. And I think after this winter, they may have some severe cabin fever they want to solve. So I’m looking forward to a good year.”
— Richard Davies, executive director of the Arkansas Parks & Tourism Department, when asked about the tourism industry performance in 2014

"The last time (changes in legislation were proposed in 2013), there was a lot of opposition to it both from the existing alcohol lobby and all the people who run liquor stores. The last thing they want to see is more stores. It cuts into their business. They want to be the only game in town, especially if they are on the border (of a wet and a dry county)."
— Fort Smith attorney Matthew Ketcham, speaking about an attempt by the city of Barling to change Arkansas’ liquor laws to allow the municipality to conduct a wet-dry vote

“(A) court facing a defendant arrested with a gun would interpret the statute based upon its plain meaning. When all is said and done, how can the court punish a person for following the literal and unambiguous meaning of the statute? A person should not be expected to consult the history of the law’s passage, or its political context, to understand what it proscribes."
— University of Arkansas law professor Laurent Sacharoff and law student Jacob Worlow, on their review of a law that has allowed for open carry of handguns in Arkansas

Western Rogers is poised to get more retail development, this time it’s just south of the Pinnacle Promenade in the Pleasant Crossings district.. Whisinvest Realty plans to build a 22,000 square foot retail center.

Pleasant Crossing Shops will be located at 2600 W. Pleasant Crossing Dr. off of exit 81 on Interstate 540. Businesses moving into the development include SNAP Fitness, two restaurants and a nail salon/spa. 

At this time, there is just over 3,000 S.F. of space still available, the company notes in the release.

Burke Larkin, senior vice president with Whisinvest Realty said, “The city of Rogers is a great location for business and we are very excited to be moving this project forward.“This is the first of several upcoming projects for the Pleasant Crossing area and we are thrilled to get this ball rolling on the next stage of development for this area.”

Rogers Mayor Greg Hines said it’s always exciting to see dirt being turned and new buildings going up around town.

“This new shopping center will give the citizens of Rogers more retail options and is the latest in a long line of business growth and job creation happening throughout Northwest Arkansas,” Hines said.

Dr. Susan Averitt of Best Start Pediatrics will host the third annual Read Across America celebration at her clinic from noon to 1 p.m on Monday, March 3. During this time volunteers will read Dr. Seuss books to her pediatric patients and guests. 

Best Start Pediatrics is located on the campus of Willow Creek Women’s Hospital at 5501 Willow Creek Dr., Suite 104 in Springdale.
 
The Delta Kappa Gamma teachers' sorority from Rogers are providing the books during that hour as part of the “Reach Out and Read” program, which also allows the clinic to distribute a book to each patient at well-child exams.

For more information, or to volunteer as a reader, call Averitt’s office at (479) 575-9359.
 

Grocery is more than 55% of Wal-Mart Stores Inc. sales, most of that in their stores, but the retailer continues to focus on its expansion of online grocery and delivery business options.

Wal-Mart confirmed it acquired recipe technology company Yumprint for an undisclosed amount. Yumprint, founded in Seattle in 2011, operates a website and mobile app that allow consumers to search food blogs, plan meals and calculate nutritional information.

“Yumprint founders Chris Crittenden and Wes Dyer had a vision for how technology can improve the way all of us discover and prepare our meals ... Chris and Wes’s ideas and ambitions for transforming the grocery shopping experience match the global opportunity Walmart enjoys in this space, and their accomplishments with Yumprint just scratch the surface of what we’re going to do next together,” notes Ben Galbraith a Walmart.com blogger.

The retail giant recently launched Walmart to Go grocery delivery pilots in the San Francisco/San Jose area and Denver. Bill Simon, CEO of Walmart U.S., recently said the retailer is pleased with those results, even though it’s just a small pilot. Simon said the service in Denver has garnered a 90% customer approval rating.

Walmart To Go is the part of a home delivery craze, as each retailer tries to trump the other. Analysts believe Wal-Mart could expand home grocery delivery anytime it wants, but the retailer doesn’t yet see ample consumer demand to justify the costs in the U.S. The retailer has also said it has learned the nuances of home delivery in part from its British banner ASDA.

Wal-Mart intends to roll Yumprint into its e-commerce operation in San Bruno. Crittenden and Dyer have joined the WalmartLabs team.

Wal-Mart grew its global e-commerce sales to $10 billion last year, a gain of 30%.

Charles Holley, chief financial officer for Wal-Mart Stores Inc., gave the following forecast for the retailer’s e-commerce business during a recent earnings call:

"We expect to grow Global eCommerce sales to over $13 billion this fiscal year, with continued focus on the U.S., U.K., China and Brazil. Our websites in Canada and Mexico are starting to gain even more customer traffic. We continue to step up investments in Pangaea, our global technology platform, which helped drive sales across our retail websites in the U.S., the U.K. and Brazil. This growth is enabled by investments we’re also making in fulfillment and replenishment. Our online websites had their most successful year in fiscal 2014, and we continue to offer a great omni-channel experience for our customers."

Tyson Foods’ oldest processing plant, now dedicated to Cornish hens, recently received an award from the Arkansas Department of Labor for its safety record.

The plant achieved 13 million work hours without a lost day due to a work-related injury or illness. The timeframe for this achievement covered nearly 15 years — Feb. 26, 1999 to Jan. 11, 2014.

The Tyson Foods plant located on Randall Road in Springdale was built in 1958 and employs 358 workers.


The award is presented to companies that excel in-on-the-job-safety records, as noted by the state labor department, the Arkansas Insurance Department and the Arkansas Workers’ Compensation Commission.

Cobb-Vantress, a subsidiary of Tyson Foods Inc., said it’s investing nearly $1 million in a three-year research collaboration with the Roslin Institute at the University of Edinburgh.

Researchers hope to identify innovative ways to improve avian health, while also develop new technologies to understand and preserve poultry genomes, the release said.

“

These are exciting new areas which we hope will lead to major breakthroughs in avian health and preservation.” said Dr Christine Daugherty, chief technology officer of Cobb.
“

She said Cobb has an extensive gene pool and to be able to better understand the poultry genome will be critical to meeting future demands for poultry products.

"We’re always striving to breed more robust chickens that will withstand disease and environmental challenges. We’re looking for birds with greater immunity to diseases or with the ability to tolerate disease without affecting their performance," Daugherty said.

The collaboration will support research by graduate students and is for an initial three years, with potential for renewal, according to the release. This agreement is one of more than 30 research projects that Cobb has been supporting in 18 different universities across the globe over the past five years, the company said.

Under the direction of its new CEO Doug McMillon, Wal-Mart Stores is embracing an open conversation with its stakeholders and anyone else who has something to share. The retailer plans to unveil a new blog on its corporate website sometime Monday (March 3), according to Chad Mitchell, senior director of digital communication at Wal-Mart.

In a bold move, Wal-Mart will allow public comments on the blog site, which the retailer plans as a discovery portal for its major platforms such as veterans hiring, empowering women, manufacturing jobs, healthy food and hunger, sustainability and global responsibility. 

“Drawing on the success of the Greenroom blog, we are excited to use the blog platform  for two-way communication about broader topics. We will be rolling the Greenroom blog into this new site. The Walmart.com blog will remain separate, but we hope to get content from the team in San Bruno on occasion,” Mitchell said.

The Greenroom blog is where Wal-Mart has promoted its sustainability and environmental initiatives. San Bruno, Calif., is the headquarters of Walmart.com.

He said there will be blog contributions from across the entire company from marketing, shopper insights, operations, and even the executive circle. On occasion, it’s possible that some news announcements could be made using this forum, which is how Walmart.com typically announces acquisitions, updates on testing phases, and other developments.

MR. SAM’S PLAYBOOK
This move to embrace conversation is straight out of the Sam Walton playbook. Two of the 10 rules found in Walton’s plan for building a business directly involve conversation.

Rule No. 4
Communicate everything you possibly can to your partners. The more they know, the more they'll understand. The more they understand, the more they'll care. Once they care, there's no stopping them.

Rule No. 7
Listen to everyone in your company. And figure out ways to get them talking. To push responsibility down in your organization, and to force good ideas to bubble up within it, you must listen to what your associates are trying to tell you.

“Although it would seem to be difficult at times to tie current and future initiatives into Sam’s founding values, it’s really a matter of leveraging modern communication channels to expand upon them. Maintaining a ‘listening culture’ is the root here,” said Carol Spieckerman, president of New Market Builders.

STIRRING THE POT
She applauds the retailer’s efforts to stir the pot and rally the troops with active conversational channels like a blog.

“Wal-Mart is masterful at framing initiatives in a straightforward way (most often this) achieves multiple beneficial outcomes for the retailer, and its recent blog announcement is no exception,” Spieckerman said.

She adds that Wal-Mart is smart to incorporate employee engagement and executive input into this expanded vision for corporate communications. 

“Doing so, expands on Wal-Mart’s overall tone of transparency and authenticity. The blog also enables Wal-Mart to originate conversations and keep its point of view circulating rather than allowing a vacuum to form that others are all too eager to fill with speculation and spin,” Spieckerman said. 

It reminds her of the retail executive who once said, “It’s better to have conversations about your company in your living room than in someone else’s.” Spieckerman also said it will be important for Wal-Mart to demonstrate that it is heeding input from associates and not over-managing the conversation. 

“Once people are given a voice, validation should follow. Corporate blogs are no different from customer forums, reviews and social media outreach in that regard. Once solicited, retailers face a backlash if input goes unacknowledged,” she said.

DIFFUSING RANTS
One has to wonder if the blog might become a target platform for rants from unions and other vocal groups on issues such as living wages or better working conditions.

Spieckerman has said Wal-Mart is adept at diffusing those pointed conversations by telling its own story. 

Mitchell said the blog comments will not be censored, but the retailer will moderate the blog in accordance with certain terms and conditions — for instance it will not allow foul language or threats.

He said there many great stories to share like that of Doug McMillon, the hourly worker who became CEO of the world’s largest retailer, and the blog will provide Wal-Mart a better medium than traditional social media platforms. Those stories and insights can then be shared via social media links back to the corporate website which garners more than 25 million originals visit annually, according to Mitchell.

CONVERSATIONAL LEADERSHIP
Analysts describe McMillon as a master communicator and charismatic leader who is dialed into tapping the strength found in the Wal-Mart network of 2.2 million employees.

McMillon recently presided over his first big meeting as CEO at the annual sustainability milestone event in Bentonville. He said that meeting and those to come would be conversational. He challenged his workforce to engage, innovate and converse in important dialogue he believes can help the company improve at all levels.

“In the future you can expect more interactive meetings like this one. So bring your stories and your ideas and be prepared to share them,” McMillon said at the conclusion of the sustainability meeting.

Wielding a combined net worth of nearly $140 billion, the Walton family heirs were again dubbed the world’s wealthiest family, according to Forbes Annual Billionaire List.

Christy Walton, the 59-year-old widow of John Walton, is the world’s wealthiest woman with a $36.7 billion net worth, according to Forbes. At No. 9 she edged out Lillian Bettencourt of L’Oreal and her sister-in-law Alice Walton, who are the only three women in the Forbes’ top 20 list. Bettencourt’s net worth is a reported $34.5 billion ranking her No. 11. Alice Walton at age 64 has a reported net worth of $34.3 billion, ranking No. 13 in the world.

Jim Walton, the 66-year-old chairman of Arvest Bank, ranks No. 10 on the list with a net worth of $34.7 billion.

Rob Walton, the 70-year-old chairman of Wal-Mart Stores Inc, has a net worth of $34.2 billion, ranking No. 14 in world.

The Walton family fortune increased 20.9% during 2013, spurred by record stock prices. The bull market last year helped produce 1,645 billionaires in 2014, up from 1,426 in 2013. Forbes reports the average net worth of this year’s class at $4.7 billion, up from $4.2 billion 2013.

Johnelle Hunt, co-founder of J.B.Hunt Transports, also made the Forbes list with a net worth of $2.1 billion.

Hispanic and Latino shoppers across the United States wield more than $1.2 trillion of buying power annually with projections of $1.5 trillion by 2015, according to Nielsen. That economic power is why Wal-Mart, Home Depot and most major retailers invest in marketing efforts to woo this important demographic.

Experts said consumer packaged goods (CPG) companies and other retail suppliers are just starting to scratch the surface with targeted marketing efforts to Hispanics. McKinsey Group reports that retail spending of Hispanic consumers will nearly double over the next 10 years and account for almost one-fifth of total retail spending.

Hispanics spend money differently from other consumers. For example, they spend at least one and a half times more on children’s apparel, footwear, and fresh food than non-Hispanic consumers do. 

Enedina Vega, publisher of Meredith Hispanic Media, recently said during a Bentonville-Bella Vista Chamber of Commerce meeting that Latino shoppers already number 52 million and their annual incomes are growing at a healthy clip. She outlined three target areas where suppliers and retailers could wield influence with this savvy demographic: beauty; baby registry; and food.

“The Latinos are a younger demographic, two of three are under the age of 35. One in six Americans is a child, but one in four Hispanics is a child,” Vega said, an indication that the Latino families are growing a faster rate than the overall U.S. population.

EXPERT INSIGHTS
Jason Long, CEO of Shift Marketing Group, said retailers understand the importance of reaching Hispanic shoppers and have required bilingual signage in their stores for several years. He said Home Depot publishes a trade magazine geared to Hispanic construction and trades professionals.

He said CocaCola is a brand nailing it with efforts to reach Hispanics, citing the recent SuperBowl ad that featured “America The Beautiful” sung in different languages. A recent survey by the Hispanic local search company YaSabe found it was the favorite commercial of their online Hispanic audience — more than one-third said it was the ad they liked the most. That was more than 20 points above their second-favorite commercial.

Unilever reached out to Hispanics on Facebook in recent years with its ViveMejor page and has garnered nearly 311,000 likes as it continues the conversation, promoting new products as well as offering recipes and other advice for Latino consumers. The site is maintained in Spanish. Unilever also maintains a Twitter page for ViveMejor with 33,500 followers.

Clinique also is a brand that resonates well with the Latina demographic, according to Vega. She said Clinique has a simple three-step process that busy Latina consumers appreciate. Latina shoppers spend more on beauty products such as cosmetics, perfumes and haircare products than the general population, Vega added.

Erin Conrad, senior manager of client services at Collective Bias in Bentonville, works with suppliers and retailers on strategies designed to engage Hispanic consumers. She said CPG companies must connect with the Latina shopper before he or she ever gets to the retail store.

She said connecting through culture and values are the best way to grab the attention of this diverse demographic. Conrad said connecting in Spanish is not as important as it once was given that 50% of Latino shoppers were born in the U.S. and are bilingual. She said connecting with Latinos in the right medium is far more important than the language.

“Hispanics are early adopters in mobile and digital media. They are more social while shopping as they share opinions via Twitter, Facebook and other social platforms. Because they are more apt to share their own opinions to a trusted circle of friends, they also pay more credence to the opinions of their friends and family,” Conrad said.

Three out of four Hispanic shoppers use technology as part of their shopping trip, Conrad said.

"Hispanic shoppers spend significantly more per stock-up shopping trip, $128 versus the average U.S. consumers’ $117. We also found that Hispanics shop more often than the general population," Conrad noted from a study by Univision and AMG Strategic Advisors.

That study also found 40% of Hispanics say they buy higher quality non-grocery products that they know will last them longer versus 27% of total U.S. shoppers.

CPG OPPORTUNITY
Conrad said Hispanic incomes are growing faster than the general population as Latina women are entering the workforce and those with bilingual speaking skills are finding higher paying jobs and employment opportunity in professional roles. For this reason, Conrad said there is opportunity to push the demographic into higher-priced brands. Culturally, Conrad said Latino shoppers naturally gravitate to the brand name they are best able to afford and still provide the best quality possible for the family. She said there is a notion common in the culture translated as, “What is cheap always ends up as more expensive.”

Food companies have huge opportunities if they can win Latino market share because Conrad said they eat at home more often, have bigger families and spend more on groceries than the non-Hispanic consumers. Conrad said unlocking cultural clues have also provided companies with growth opportunities when they marketed toward Hispanics.

Last year, Conrad told The City Wire that Latina moms are more apt to cook dinner for their families during the work week. Eggs and non-toasted bread are more commonly found on Latinos' breakfast tables than warm cereals which are more popular with non-Hispanic households, according to year long study by the NPD Group which was released in 2012.

Aunt Jemima brand heavily marketed toward Latinos, according to the 2012 case study conducted by Chicago-based Aspen Marketing. The study revealed that Latino mom’s had reservations about serving breakfast in a box to their families which likely kept them from trying the pancake mix. Aspen and Aunt Jemima set out to win Latinos over by staging a Promotional Pancake Breakfast Tour in top U.S. Hispanic market to give moms and children a chance to see the convenience and taste of the boxed pancake mix brand. The results were sweet for retailers and suppliers, according to Aspen, who reported Aunt Jemima saw a 5% sales lift among participating retail customers after the promotional breakfast campaign.

SOCIALLY CONNECTED
A recent study by Unilever and its media planning agency Mindshare looked at four months of social media data use gleaned from 42 million users and 70 million shares. This research found Hispanic consumers are twice as likely to share content or click on shared content than Americans in general.

The research also showed Hispanic consumers share via social media five times more often than non-Hispanic users, and content shared by Hispanic consumers is 35% more likely to be clicked on than content shared by the non-Hispanic population. Hispanic consumers were also twice as likely to purchase the kinds of products they share or like online. Non-Hispanic consumers were 1.3 times as likely to make a purchase compared to what they share online.

The categories most talked about by Hispanics in this study were health food, personal care, beverages, sweets and snack categories. Arts and entertainment, family and sports were the most searched content categories, followed by politics and government, food and drink, health and fitness, style and beauty, technology, home and gardens, business, travel and leisure, education and automotive.  

The study found that nearly 20% of Hispanic consumers consume mobile content (6.4% iPhone, 8.1% tablet and 5.1% Android), versus 13.6% of non-Hispanic consumers.

Convenience is the name of the game in retail these days and Wal-Mart Stores Inc. is taking nothing for granted as they test and build out a tethering system that will include pick-up depots for items ordered online.

Walmart U.S. CEO Bill Simon said Tuesday (March 4) during a speech at the Raymond James & Associates investors conference in Orlando, that the retailer is focused on delivering service where and how consumers want it.

He said the drive-through pick-up for online orders being tested in 11 stores in the Denver area are yielding a 90% satisfaction rating with consumers. This test in the Denver market was first announced in October. Shoppers pull into the parking lot and a loader brings the items to the car. Wal-Mart also allows order pick-up through the drive-in pharmacy line. 

This notion of drive-in has prompted Wal-Mart to explore and test the drive-in depots that are not attached to a supercenter. Simon described the drive-in modular as a “Sonic-like.” Simon did not give specifics about the timeframe for the depot concept, but said it is part of the retailer’s tethering efforts to fully connect its digital orders with its massive physical infrastructure.

He described the retailer’s tests that will allow someone to order online, then pick-up that order later in the day at various places of their own choosing. For instance, he said the online order could be picked-up at the retailer’s gas station later in the day when the shopper stopped for fuel. Simon reminded the analysts that the pick-up service does not require a subscription and is for any of the products offered by the retailer from big screen televisions to snow shovels.

He said the retailer continues to test numerous initiatives toward more convenience such as lockers which are used in its ASDA business in the U.K., and more recently offered in Washington D.C.

This new stand alone pick-up depot modular could include lockers which are filled through various supply chain options — the nearest supercenter, smaller delivery trucks running from distribution center to the depot or direct shipment from online fulfillment centers.

Wal-Mart has said the pick-up depots – whether attached to a supercenter, smaller format or as a stand alone unit – are not designed to replace the traditional stock-up trips, which are a $585 billion market and still 60% of the grocery spend. Wal-Mart has a 25% share.

The drive-in service is for more about convenience, and those fill-in trips mid-week, an area that Wal-Mart has lost sales to in recent years from the rise of smaller format dollar stores and convenience stores. Simon said this quick-trip market is worth $415 billion annually and equals some 40% of the U.S. grocery spend. Wal-Mart’s share is just 10%, something the retailer thinks it can improve.

This is a concept quite similar to the “dark stores” that retailers like Tesco and Waitrose have begun to open in Europe – depots that hold no inventory and serve as pick-up locations for goods purchased online, said Carol Spieckerman, CEO of NewMarketBuilders in Bentonville.

"This is an exciting development on a number of fronts. Standalone locations will get products to shoppers without forcing them to navigate football-field-sized parking lots and supercenters. The convenience factor alone is huge and in some cases, may mitigate price comparisons. Wal-Mart wins a number of other fronts by expanding its omnichannel scale, optimizing total enterprise inventory and bringing convenience-conscious customers on board who otherwise might not shop at Wal-Mart – all without the costs and location limitations associated with building stores. These locations will be inherently cost-effective and less labor intensive than the smallest of stores and advances in robotics have the potential to make them even more so," Spieckerman said.

She applauds the retailer's efforts saying  "Wal-Mart gets it" that attempting to force customers into a couple of convenience solutions isn’t the way to go and its growing portfolio of right product, right time, right place options represents the ultimate in customer-centricity.

"The drive-through options play heavily on convenience and will be particularly effective in driving incremental business with shoppers who already trust Wal-Mart yet may shop elsewhere for fill-in trips. This is a powerful attack on drug retailers and dollar stores that continue to expand into consumables and fresh produce in particular. Until Wal-Mart’s small format stores proliferate, drive-through options are a great way to keep convenience-focused, price-sensitive customers from seeking other options," Spieckerman added.

Simon told analysts the retailer will continue testing various initiatives designed to bring more convenience to the consumer while adding retail sales with minimal costs. He said once a test proves to be viable the retailer has no problem with a quick rollout. In terms of home grocery delivery, Wal-Mart is testing it in the San Jose/San Francisco market since 2011, but is not yet convinced there is enough demand for a larger rollout.

Wal-Mart has said it’s in the process of increasing the number of small trucks for grocery home delivery program from seven to 10. Wal-Mart continues to test same-day delivery of general merchandise in northern Virginia, near Washington D.C.,  Philadelphia, Minneapolis and in the San Francisco area.

Simon said three of the retail ecosystems announced in October will come online this year, the first of those in May. The facilities in these fully tethered ecosystems could soon include stand alone pick-up depots.

FedEx Corp. said its subsidiary less-than-truckload unit FedEx Freight will increase its rates by an average of 3.9%. The new rate will take effect March 31 and apply to all shipments in the U.S., Mexico and Canada.

This rate increase follows a 3.9% hike in the carrier’s Express and Ground parcel units that took effect in January. Freight rates rose 4.5% last year as carriers phase in new equipment and driver requirements.

Electronics retailer RadioShack continues to fight for its existence despite same-store sales sinking 19% in the recent quarter. The Texas-based retailer said it will close up to 1,100 stores across the U.S. as it shrinks its footprint amid escalating losses.

CEO Joseph Magnacca said the closures would leave RadioShack with more than 4,000 U.S. stores, including more than 900 dealer franchise locations. The company didn't immediately identify which stores will be closed or how many jobs would be affected.

In Northwest Arkansas there are no corporate-owned stores, but there are three franchise locations operated by Vaughn Electronics. These are not expected to be impacted by the other closures. There are two corporate stores in Fort Smith, representatives at both locations said the list of closures has not been released.

The company said that the stores targeted for closures are being selected based on location, area demographics, lease duration and financial performance.

In the quarter ending Dec. 31, RadioShack lost $191.4 million, or $1.90 per share. Losses widened from deficits of $63.3 million or 63 cents a share, a year earlier. Revenue declined to $935.4 million from $1.17 billion. Wall Street was looking for higher revenue of $1.12 billion.

In the past two years RadioShack has recorded losses of $539.6 million. Shares of RadioShack fell 46 cents, or 17% to $2.26.

Analysts said the electronics space is challenging for all the players, and with Best Buy and Amazon firmly stationed, it’s unclear how much room there is for niche players and other big box retailers.

Old man winter continues to show his ugly hand across much of the U.S. with the start of spring still more than two weeks away. 

Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist, said this latest blast of winter weather caused problems for cattlemen, impacting beef distribution and consumption. He said cattle and beef markets are exhibiting volatility with disruptions in supply and demand.

Boxed beef prices increased sharply last week with Choice values up $10 per hundredweight to finish the week at $225. Fed cattle prices increased to end the week at about $150 per hundredweight.
 
The U.S. Department of Agriculture reports beef production for the year is down 6.9% compared to last year with total cattle slaughter down 7.5% year over year. Peel said average cattle carcasses have been 4 pounds heavier which has helped to mask some of the underlying cattle production. 

For the year to date, steer slaughter is down 6.5% heifer slaughter is down 10.7% and cow slaughter is down 11%, all compared to the same period last year, according to USDA reports.
 
Peel said winter storms impact cattle performance in feedlots and those impacts will be evident in the market for several weeks. Additionally, later storms that occur during spring calving season have more potential for long term impacts on cattle production for many months. Winter weather takes cattle performance and production out of the system that is never recovered and further reduces beef supplies in an already declining beef production situation, he said.

Arkansas cattlemen have seen more rain this year and with decreasing feed costs, experts at the University of Arkansas expect them to rebuilt their herds at a faster rate than the nation at large. (See an Arkansas Farm Bureau video below on efforts to rebuild cattle herds in Arkansas.)

This winter has been tough for packers as they continue to run negative margins averaging losses of $81 per head last week. Profits turned into losses in February amid rising live cattle prices and tepid demand, according to Sterling Profit Tracker.

A growing local economy and increased enrollment at the University of Arkansas kept multifamily occupancy levels stable at 96.5% last year, despite the opening of 823 new student housing units since the fall of 2012.

A recent report by CBRE-Northwest found that occupancy rates were strong enough to prompt a 3.3% overall hike in rental rates last year, led by a 5.3% rate increase in Fayetteville.

Brian Donahue, senior associate and author of the CBRE report, said private multifamily investment has been stagnant since 2012 as the University of Arkansas student housing growth has escalated. Looking ahead, he said the university will add another 250 units this year and 500 more next year, which is likely to keep private investment at bay.

MAINTAINING SUPPLY
In 2013, there were just 96 new units completed outside of UA student housing —the Copperstone Phase II project in Bentonville. Donahue said Lindsey Management still has plans to build the Trails at Rainbow Curve, which is 487 additional units planned for Bentonville. ERC recently announced a 62 unit multifamily, mixed-use project – the “Thrive” – in Bentonville’s new Art District.

These private projects are expected to temper occupancy rates in Bentonville, which were 93.5% at the end of 2013, according the CBRE report. Donahue said Bentonville’s occupancy rate decreased from 98% midyear 2013 to 93.5% at year-end because of the recent opening of Cornerstone Phase II.

ERC is slated to break ground in the next 45 days on the “Thrive” project. Kyle Cook with Lindsey Management said dirt work has begun on the Trails at Rainbow Curve project. He expects some of the units will be available to lease by the end of the year, with the entire project coming online in the first quarter of 2015.

Donahue expects the low vacancy rate in other submarkets to spur more private investment over the next 12 to 18 months. Rogers reports the lowest vacancy rates at 1.5% year-end, followed by Fayetteville at 2.5%. Springdale showed 5% vacancy rates at the end of 2013, according to the report.

In the most recent Skyline Report for the multifamily sector, Kathy Deck, director of the 
Center for Business and Economic Research at the University of Arkansas, credited low vacancy rates to an improved employment metric across the region.

“Northwest Arkansas is benefitting from positive growth in our job production,” Deck said in the September 2013 report. “The area gained 9,000 new jobs last year on top of the 9,000 created in 2011. That kind of growth puts some positive stress on our capacity to house these new workers.”

RENTAL RATES
Strong demand for units has allowed property managers to raise rates in one and two-bedroom apartments last year, according to the CBRE report.

The average rental rate across the region was $591, a $19 per month increase from the prior year. One bedroom units rose the most averaging $502 in monthly rent. The rent rose $31 per month over the past year. Two bedroom, two bath units rose $15 per month to $699. Three bedroom units stayed steady at $855 per months, with four bedroom units rents declined $83 per month to $1,033.

Donahue reports rent specials and concessions were up slightly last year, but given the demand for units, deals are not that common in the Northwest Arkansas market.

PENT-UP DEMAND
New household formation is key for the multifamily sector and this is one metric that is running behind schedule. Roughly 1.5 million new households are typically formed each year, but since the recession of 2008, this activity has slowed.

The National Association of Realty estimates household formation fell by 3.5 million over the past five years. At the same time population has grown. Experts believe as the economy improves and the employment picture improves, more people will move out on their own. Real estate experts believe this pent-up demand will be a source of strength in single family home sales for the next 18 to 24 months.

CBRE warns that in Northwest Arkansas there could be softening in the occupancy levels once the 750 new student housing projects come online late this year and next. However, the market has been able to absorb the 823 new units opening since the fall of 2012, given the UA’s enrollment increase.

As the market fundamentals remain strong, Donahue expects all classes of multifamily to fare well. He said the market is also ripe for selling these properties as investor demand is growing.

He said with single family residential now in full recovery, a potential bump in tourism with Crystal Bridges Museum and steady job growth, Northwest Arkansas’ apartment market will maintain its upward momentum in the near term.

The growth of year-to-date tax collections in Arkansas is on a downward trend, and the February gross revenue number was below the budget forecast. The February report also showed a continued decline in collections related to consumer spending.

Year-to-date gross revenue (July 2013-Feb. 2013) totaled $3.909 billion, 2.3% above the same period last year and above forecast by 0.5%, according to the report issued Tuesday (March 4) by the Arkansas Department of Finance and Administration.

The gross collections were up 3.4% after the first six months of the fiscal year, and 0.9% above forecast. After the first four months of the fiscal year, the gross revenue was up 4.1%.

Individual income tax collections for the fiscal year totaled $1.907 billion, up 2% from last year and 1.1% above the budget forecast. Year-to-date sales and use tax collections were $1.446 billion, up 2.4% above last year and 1.6% below the budget forecast. The sales and use tax collections were up 4.8% four months into the fiscal year and up 3.9% six months into the fiscal year. Income taxes and the sales and use tax collections are the two primary sources of state revenue.

The corporate income tax collections for the first eight reporting months of the fiscal year totaled $240 million, up 5.7% compared to last year and 4.5% above forecast.

FEBRUARY NUMBERS
February gross revenue was $427.3 million, up 3.9% above last year and 0.7% below forecast.

John Shelnutt, head of the Department of Finance and Administration’s Economic (DFA) Analysis & Tax Research division, provided this analysis of the February numbers: “Results were significantly impacted by: 1) decline in Sales and Use tax compared to year ago and versus forecast, 2) higher-than expected growth in individual refunds due in part to delayed start of the tax filing season in January, and 3) a positive contribution from temporary effects of payroll timing for Individual Withholding tax. ... Sales and Use tax collections in February largely reflect economic activity in January. Weather effects on collections were noted in the retail sector.”

Individual income tax collections during February totaled $226.7 million, up 14.4% compared to February 2012 and above forecast by 7%. Sales and use tax collections during the month totaled $167 million, down 4.3% from last year and 7.6% below the forecast.

Sales and use tax collections, considered a barometer of consumer confidence, ended fiscal year 2013 on a down note. Collections in the segment for the fiscal year totaled $2.124 billion, up just 1.1% compared to the 2012 period, and 1.4% below forecast.

The DFA in early December updated the projections for 2014 and 2015 fiscal year revenue. Gross general revenues are estimated at $6.203 billion for the current fiscal year (July 1, 2013-June 30, 2014), down about 0.2% from fiscal 2013 collections.

The revenue forecast for fiscal year 2015 is $6.333 billion, up just 2.1% above the 2014 estimate. The 2015 estimate includes an anticipated reduction of $85.2 million from tax cuts approved in the 2013 Legislative Session.

OTHER TAX COLLECTIONS
Alcoholic beverage
July 2013 - Feb. 2013: $33.8 million
July 2012 - Feb. 2012: $32.7 million

Games of skill
July 2013 - Feb. 2013: $24.8 million
July 2012 - Feb. 2012: $21.8 million

Tobacco
July 2013 - Feb. 2013: $146.8 million
July 2012 - Feb. 2012: $150.5 million

Insurance
July 2013 - Feb. 2013: $45.8 million
July 2012 - Feb. 2012: $43.2 million

COLLECTIONS HISTORY
Tax collections during fiscal year 2013 (July 2012-June 2013) totaled $6.214 billion, up 4.9% above the previous fiscal year and up 2.5% compared to budget estimates. One result of the gains was a budget surplus of $299.5 million.

Fiscal year 2013 marked the third consecutive year of year-over-year gains. Arkansas tax collections reversed a negative two-year slide in the 2011 fiscal year, with collections up 4.5% in the July 2010-June 2011 period.

State tax collections for fiscal year 2011 totaled $5.673 billion, up 4.5% above the $5.43 billion in the 2010 period.

The biggest declines in the 2009 and 2010 fiscal years were with individual income tax collections and sales and use tax collections.

February building permits came in at a combined $7.405 million for the cities of Fort Smith, Greenwood and Van Buren. The total is an increase of 12.04% over the same period last year, which saw only $6.609 million in permits across the region's three largest cities. The total is also an increase of 8.96% from February 2011's total of $6.796 million.

For 2014 so far, the three cities have a combined building permit valuation of $16.874 million. Fort Smith had the largest share of the pot with $10.593 million in permits, while Van Buren had permit totals of $5.633 million. Greenwood is lagging farthest behind with a mere $647,445. The total is down 13.44% compared to the first two months of 2013, which saw $19.495 million in building permits across the three cities.

FORT SMITH
The city of Fort Smith issued a total of 124 permits in February. With a total value of $5.962 million, the city saw an increase of 11.92% over February 2013's total of $5.327 million on 146 permits.

The Fort Smith figures were most heavily weighted in residential construction, which saw 83 permits issue with a total value of $3.613 million. While that is 10 less residential permits than the 93 issued in February 2013, the total is 59.95% higher than last year's figure of $2.259 million.

The city also saw the issuance of 27 commercial building permits worth $2.153 million. Included in the commercial permits was a permit valued at $700,000 for a new I Am Well Clinic to be built at 7215 Cameron Park Drive.

GREENWOOD
Building permits issued in the city of Greenwood during February were consistent with last February's figures, coming in at $464,485, a 1.23% increase from February 2013's total of $458.825.

Of the permits issued in the city, one was for a new home valued at $364,410. Another permit, valued at $93,980, was issued for a new swimming pool while a storm shelter valued at $6,095 was permitted, as well.

VAN BUREN
Thirty-three permits were issued by the city of Van Buren in February with a total value of $978,376. The figure is an increase of 18.74% from the same month last year, when permits totaled only $824,000. But the value is a decrease of 78.98% from January. That month saw permits totaling $4.655 million, including a $4 million expansion of the Legacy Heights Retirement Center. Legacy Heights is expanding its alzheimer's unit.

Permits issued in February were largely centered in residential construction, where six permits totaling $863,100 were permitted. Another construction permit totaling $88,000 was also issued, as were eight sign permits totaling $27,276.

2013 RECAP
Combined values in the three cities during 2013 were $203.037 million, compared to $157.32 million during 2012. The 2013 value is above the $201.079 million in 2011.

Fort Smith closed 2013 with the largest share of valuations, logging $177.687 million (a one-year increase of about 30.24% from $136.428 million in 2012), while Van Buren was the next largest with $17.067 million (a one-year increase of 38.96% from $12.282 million in 2012). Greenwood posted an additional $8.283 million, the only city to show a decrease from the previous year's total of $8.609 million (a decrease of 3.79%).

The gains in the Fort Smith market were largely from industrial construction projects at Chaffee Crossing, the construction of Mercy's new orthopedic hospital along Phoenix Avenue and various municipal construction projects across the city.

Target said Beth Jacob, the retailer’s chief information officer resigned today (March 5) amid a restructuring of its information and compliance division following the pre-holiday data breach. Jacob has overseen information security since 2008 for the retailer.

Target CEO Gregg Steinhafel said the company will search for an interim chief information officer who can help guide the company through the transformation.

The retailer said it is working with an outside adviser, Promontory Financial Group, to help it evaluate its technology, structure, processes and talent as part of the divisional restructuring.

Arvest Bank has promoted Stephen Boyd to consumer lender for the bank’s Springdale market. Boyd, previously a personal banker for Arvest in Springfield, Mo., is excited to relocate to Northwest Arkansas, according to the bank's release.

He first joined Arvest Bank as a teller in 2011. Since then he worked as a financial service representative and was promoted to personal banker in 2012.

 “Stephen is a native of Springdale, so he has a great understanding of our community,” said Christy Queary, vice president and consumer loan manager for Arvest Springdale. “Stephen’s experience will add strength to our team and our ability to help people with their loan needs.”

Boyd graduated from Springdale High School in 2006 and earned his bachelor’s degree in business administration from Missouri Southern University in Joplin, Mo., in 2011. He and his wife, Hillary were married in 2011. The couple attends Fellowship Church in Lowell.

The U.S. Department of Defense has awarded Tyson Foods a three-year contract worth a maximum of $444 million to supply chicken to the federal government, according to March 4 release.

The contract, for commercial chicken items, is described as fixed-price, with an economic price adjustment component. Overseas vendors supporting overseas military customers also will order from the contract, the department said.

Tyson was chosen from a group of nine offers received through a competitive bid process.

Shares of Tyson Foods reacted favorably to the news, the stock price closed Wednesday (March 5) at $40.42, up 2% or 82 cents higher on the day. For the past 52 weeks the share price has ranged from $22.47 to $40.80.

Sitting pretty on fat balance sheets, the nation’s two largest chicken companies are it again, strategically planning to grow market share in the highly fragmented poultry industry.

Tyson Foods is ranked No. 1 in market share with 22% of the nation’s chicken production. No. 2 ranked Pilgrim’s has 20% of the market, according to Watt Poultry USA.

Both companies recently announced plans to expand their prepared foods segments and are investing heavily in international ventures – Tyson Foods in China and Pilgrim’s in Mexico. Industry analysts applaud the efforts and say the U.S. market is likely facing overproduction which could result in lower chicken prices for the consumer and lower chicken revenue for the industry.

PREPARED FOODS PUSH
Tyson Foods recently acquired Bosco’s Pizza Co., in its expanding prepared foods portfolio. Last year the meat giant acquired Circle Foods and Don Julio Foods giving it more access to Latino and Indian marketed products sold in the prepared foods segment. The meat company also is reportedly interested in Michael’s Food Group, an egg and dairy company being sold by a Goldman Sachs private equity arm. Tyson did not confirm a bid on Michael’s saying it doesn’t comment on rumor or pending activity.

Tyson Foods CEO Donnie Smith has said the prepared foods segment is the growth engine for the meat company and he recently split the unit away from the chicken segment which had previously shared leadership.

Donnie King was recently placed in charge of the prepared foods segment and given the go-ahead to grow the segment’s sales an estimated 7% to $3.553 billion by the end of 2014. That would be a 9.76% growth rate over the total segment sales in 2012. King previously served as president of the combined segment of chicken and prepared foods since 2009.

Smith told investors and analysts in the recent earnings call that this segment is already starting to contribute more to the company’s bottom line and by the end of this year to early 2015 many of the recent investments will be paying off.

Pilgrim’s CEO Bill Lovette told analysts during a Feb. 21 earnings call that Chad Baker, a former Smithfield Foods executive, was joining Pilgrim’s to head up the prepared foods segment. Lovette is a former Tyson Foods executive. Lovette said Pilgrim’s prepared foods, valued-added sales had decreased about 10% over the past three years. He said some of that business was not paying off which prompted the company to readjust.

“In order to make that business more impactful from a margin perspective, we set a strategy ... now we're going to bring on the resources to grow that business in the right way in right implying are more profitable,” Lovette said in the call.

Pilgrim’s estimates about 30% of its sales are valued-add/prepared foods. That would equate to $2.52 billion. Lovette expects that number to grow in the next couple of years, but he did not give an estimate.

INVESTMENTS ABROAD 
Tyson has ramped up efforts to become fully integrated in China over the past year. Tyson operates three ventures and employs about 4,300 people in China, and first opened operations there in 2001.

In China, Tyson processes chicken sold wholesale into food service for clients such as Yum Brands! and McDonalds. Tyson also sells fresh chicken to Wal-Mart and Sam’s Clubs in China, extending those longtime U.S. relationships abroad.

Tyson said last fall it was processing about 1.3 million birds per week in China with a goal  to reach 3 million per week in 2014. Smith recently said the company was slowing the pace because there is an excess supply of chicken due to demand volatility from spikes in avian flu and other food safety concerns. He said Tyson is not giving up on China but is prepared to wait until market conditions improve before building out the rest of the chicken farms. He said the company will continue to acquire land rights and process the birds it owns. At this time Tyson’s two plants are running one shift with company originated birds. 

Smith said they had hoped to double that production by year end, using only company birds, but it is going to take longer than they thought.

Rob Moscow, analyst with Credit Suisse, said Tyson has a three- to four-year head start on other poultry companies wanting to invest in China. He said it’s a tough market and he has yet to see an agribusiness company successfully enter and make it big in China. However, he does credit Tyson with having an experienced Chinese national leading their operations. Arex Lee has 25 years of experience with one of Tyson’s Chinese poultry competitors. Moscow said it was Lee who initiated Tyson’s vertical control from egg to processed chicken in the retail channel.

Pilgrim’s recently announced plans to expand its footprint in Veracruz, Mexico. Lovette said the project will begin with live sales and work toward a new processing facility expected to come online by late 2015. Pilgrim’s has committed about $70 million toward expansion opportunities this year. They said the Veracruz area is showing increased chicken consumption along with robust population growth. It is also located near a port where grains are shipped. Pilgrim’s is staking out land for this new operation. 

“We'll build our feed mill and a hatchery, import hatching eggs and then build out our breeder supply there. And then the next step is we'll build a processing plant as the needs tell us to,” said Fabio Sandre, chief financial officer at Pilgrim’s.

MORE CHICKEN
Moscow is one of the analysts who expects domestic chicken excesses this year. He said after high levels of profitability in 2013 and many breeders now in the middle stages of rebuilding their grandparent stocks, chicken processors will be in position to substantially increase their production by early 2015.

He expects chicken prices to fall this year given rising egg set numbers and the 5.7% more poultry sitting in cold storage. The last time the industry faced declining chicken prices from over production was 2006 — a disastrous year for the industry. Tyson Foods lost $196 million for the year, and $127 million in the second quarter alone.

While Moscow said there has been many changes at Tyson since then, the meat giant is still vulnerable to falling chicken prices. He estimates that if chicken prices fall 10% and corn costs were to suddenly rise $2 per bushel the downside to Tyson Foods earnings would be 65 cents per share. For that reason he is neutral on Tyson Foods shares.

The U.S Department of Agriculture data show eggs set were up 5% from the prior year during the last four months of 2013. Broiler production is expected to increase about 3% this year across the industry. Analysts said heavier bird weights alone add 1% to the total production in pounds and lower grain costs this year are also likely to encourage higher weight per head. 

Smith has said many times the company will err on the side of caution and slightly under produce the chicken it needs, knowing it can buy the difference in the open spot market. 

While Tyson’s restraint is applauded, there is still a majority of the market where smaller processors may not hold back the temptation to grow more chicken coming off some very profitable quarters.

EARNINGS GUIDANCE
Tyson recently gave annual earnings guidance, an usual move given the volatility seen in grain and other commodity costs in recent years.

"While we don't typically provide earnings guidance, we do think we'll deliver at least $2.78 in fiscal 2014, which would be in excess of 23% earnings per share growth, and we're poised for at least 10% EPS growth in 2015 and beyond," Jon Kathol, Tyson's vice president of investor relation, said this past week at an investor conference.

Kathol said Tyson's business strategy centers on accelerating growth of domestic value-added products and international chicken production and innovation of products and services that customers want.

Moscow said the guidance is a little too aggressive for his modeling given the headwinds he predicts from overproduction. That said, Wall Street investors are bullish on the shares.

Tyson Foods (NYSE: TSN) shares closed Wednesday (March 5) at $40.42, flirting with its 52-week high price of $40.80. Tyson shares have rallied 73% in the past 12 months. 

Pilgrim’s (NASDAQ: PPC) shares closed Wednesday at $18.20, up 29 cents. The stock price has ranged between $7.82 and $19.23 during the past 52 weeks. Pilgrim’s shares are up 98% year-over-year.