Quelle surprise

Who would have thought that removing human contact from the process of checking out groceries would lead to anti-social and illegal behavior? Certainly, I never would have thought this:

Beneath the bland veneer of supermarket automation lurks an ugly truth: There’s a lot of shoplifting going on in the self-scanning checkout lane. But don’t call it shoplifting. The guys in loss prevention prefer “external shrinkage.”

For every problem, there is a handy euphemism.

Self-checkout theft has become so widespread that a whole lingo has sprung up to describe its tactics. Ringing up a T-bone ($13.99/lb) with a code for a cheap ($0.49/lb) variety of produce is “the banana trick.

I always wondered what safeguards were in place to prevent people from doing this. I guess the answer is: none.

If a can of Illy espresso leaves the conveyor belt without being scanned, that’s called “the pass around.” “The switcheroo” is more labor-intensive: Peel the sticker off something inexpensive and place it over the bar code of something pricey. Just make sure both items are about the same weight, to avoid triggering that pesky “unexpected item” alert in the bagging area. […]

The Leicester researchers concluded that the ease of theft is likely inspiring people who might not otherwise steal to do so. Rather than walk into a store intending to take something, a shopper might, at the end of a trip, decide that a discount is in order.

Especially if all of the checkout counters are closed, forcing the shopper to use a self-checkout machine… half of which are switched off.

As one retail employee told the researchers, “People who traditionally don’t intend to steal [might realize that] … when I buy 20, I can get five for free.” The authors further proposed that retailers bore some blame for the problem. In their zeal to cut labor costs, the study said, supermarkets could be seen as having created “a crime-generating environment” that promotes profit “above social responsibility.”

Meanwhile, the rule of law continues to decline:

In some places, meanwhile, the likelihood of being punished for petty shoplifting is decreasing. Even if a manager wants to press charges, many police departments can’t be bothered with supermarket theft. In 2012, for example, the Dallas Police Department enacted a new policy: Officers would no longer routinely respond to shoplifting calls for boosts amounting to less than $50. In 2015, the threshold was raised yet again, to $100.

Starbucks finally meets its match in China

Its name is Luckin Coffee, it has opened about 500 outlets since its launch earlier this year, and it is reported to be worth over $1 billion, making it China’s first coffee unicorn.

Jeffrey Towson of Peking University has been asking for years why Starbucks doesn’t have a serious competitor in China. Well, now it does.

Naturally, Luckin doesn’t have cash registers and you have to order through their app and pay through China’s mobile panopticon of WeChat/Alipay or the company’s own payment function.

“My take is their big weapon is digital + lower prices + tons of locations,” according to Towson. Is this the Starbucks killer?

Luckin Coffee has the stated goal of beating Starbucks, but even without doing that, they can potentially build a profitable business by getting more Chinese to drink coffee. The current per capita average is four to five cups per year.


Ay, caramba! China’s shopping malls lure big foreign brands

The world's first Simpsons Store, in Beijing

The world’s first Simpsons Store, in Beijing

With a thriving consumer market, Shanghai remains attractive to retailers including big international brands, according to property consultancy Cushman & Wakefield’s latest retail market report. High-profile store openings in recent months include China’s first LEGOLAND Discovery Center in the Parkside Plaza shopping center; two new Apple stores, at Global Harbor and Hopson One; and a Pret A Manger shop – Shanghai’s second – in Jing An Kerry Centre.

Looking ahead, coffee snobs in Shanghai will be able to enjoy the first Starbucks Roastery outside the US next year. The Roastery, a massive 2,700-square-meter venue showcasing the process of roasting and brewing coffee, will launch in the landmark mixed-use HKRI Taikoo Hui project in central Jing’an district. Shanghai will also host a Simpsons Store in the second half of this year, following the launch of the world’s first such store in Beijing in May (coming soon to Xian too).

HKRI Taikoo Hui (not a photo)

HKRI Taikoo Hui (not a photo)

Here are a few key trends we are seeing in retail property across China:

1) China is building shopping malls like there’s no tomorrow. Mainland China is reckoned to have nearly 4,000 shopping malls, a number that is expected to reach 10,000 by 2025. Agency data indicates that over 17 million square meters of shopping malls are slated to launch through the end of 2017 in just the country’s first-tier cities and major provincial capitals.

2) Suburban markets in first-tier cities are emerging retail hotspots. The two Apple stores mentioned above opened in non-core areas of Shanghai, as did the LEGOLAND Discovery Center, which according to Cushman & Wakefield was “able to attract a huge amount of footfall from different districts and has helped the landlord improve its overall occupancy rate,” despite its suburban location in Shanghai’s Putuo district.

LEGOLAND Discovery Center in Shanghai

LEGOLAND Discovery Center in Shanghai

New retail space in the second half of this year will mostly be concentrated in suburban areas such as Shanghai’s Minhang district and Beijing’s Daxing, Fengtai, and Tongzhou districts, driven mainly by population growth, increasing spending power, and expanding transportation networks in the suburbs.

3) F&B is driving new space absorption. China has a famously gustatory culture, and most Chinese go to malls to eat, not to shop. This is reflected in the high and rising proportion of shopping mall floor space dedicated to food and beverage (F&B) in China. The recently renovated Printemps Department Store on Shanghai’s Huaihai Road is not unusual in offering nearly 40% of its space to F&B tenants. Retail landlords tend to encourage F&B occupancy to boost footfall, highlighted by a flurry of new food and drink outlets in first-tier cities in Q2, such as the first Shenzhen and Guangzhou locations of The Coffee Bean & Tea Leaf.

New Japanese restaurant in Beijing's Taikooli Sanlitun

New Japanese restaurant in Beijing’s Taikooli Sanlitun