- Created on 06 May 2013
Buffalo Wild Wings, long known for its flavorful chicken wings, is throwing its hat into the premium beer ring. Their new beer, which was announced during the company’s first-quarter earnings call on Monday, is named “Game Changer.”
Buffalo Wild Wings CEO Sally Smith said the game is “a premium craft beer that is designed to go perfectly with our flavorful wings while watching a game.” Smith also noted that the restaurant brand has been looking for ways to increase their beer margins for some time now, but found it challenging due to cost restrictions from brewers and distributors.
Buffalo Wild Wings also announced that it’s changing its pricing for wings. It will now sell wings according to weight instead of quantity. Wings will now be available in “snacks, small, medium and large” serving sizes.
“Our new servings will allow us to serve a consistent portion of chicken to our guests when the size of wings fluctuates,” Smith said.
The company buys wings by the pound and has sold them by the piece, but chicken growers are producing bigger birds with bigger wings, leaving the brand with fewer wings per pound. Wild Wings has been testing new portioning in about 40 markets. The company will begin implementing the new portioning at all of its restaurants in July, and plans to have it completed by the start of football season.
- Created on 03 May 2013
According to the data found in a new report, "The Buying Power of Black America," Black consumers have shifted their priorities and preferences.
With the nation slowly recovering from recession, businesses need to develop strategies for regaining and increasing their share in the Black American economy. Black consumers now represent the margin of profitability in most consumer product categories.
"What the recession did to Black consumers' buying habits was to give them a reason to re-evaluate how they spent billions of dollars," said Ken Smikle, president of Target Market News and editor of the report.
"Before tight economic times, many companies were in the habit of taking their loyalty -- especially to top brands -- for granted. That changed during the downturn. Price became a bigger factor driving purchasing decisions. Now brands have to earn the loyalty of Black consumers all over again, and Black consumers are asking brands, 'what have you done for me lately.'"
For the past 17 years, Target Market News has published the only report that details in dollars the impact of the Black Consumer
Market. Now approaching a trillion dollars in spending, the earned income of Black America already makes it the 16th largest market in the world, and it is on the verge of surpassing the gross national income of Mexico.
This 105-page report breaks down how much of Black consumers' $836 billion in income during 2011 was spent on clothing, entertainment, food, beverages, toys, consumer technology, cosmetics, autos, travel and dozens of other categories.
The top five categories with the largest dollar expenditures were Housing and Related Charges - $206.2 billion; Food - $70.7 billion; Health Care - $25.5 billion; Cars and Trucks (new and used) - $22.6 billion; and Apparel Products - $21.1 billion.
The top five categories showing an increase in spending between 2010 and 2011 were
Appliances, $2.7 billion (29%); Sports and Recreational Equipment, $850 million (28%); Personal and Professional Services, $5 billion (27%); Computers, $5 billion (21%); and Non-Alcoholic Beverages, $4.3 billion (16%).
Besides the economy, another factor causing a shift in the loyalty Black consumers is social media and increased access to business information. The new edition of The Buying Power of Black America debuts a section detailing the advertising dollars spent by major companies in Black media. It also compares the ad spending of companies by categories.
The Buying Power of Black America is an analysis of data compiled annually by the U.S. Department of Commerce. It is based on interviews and diaries collected from 3,000 Black households, and is the most comprehensive survey conducted on Black consumers.
- Created on 02 May 2013
The small-dollar loans that generate long-lasting debt for consumers and cost them billions of dollars each year are drawing the active attention of legislators and regulators alike. On April 24, the Consumer Financial Protection Bureau (CFPB) released a white paper on payday loans made by storefronts and by banks. Despite years of bank efforts to portray themselves as anything but payday lenders, the CFPB strips them of that cover.
According to CFPB Director Richard Cordray, “What we found is there is not much difference from the consumer’s perspective, between payday loans and deposit advance loans. They have similar purposes and, as it turns out, similar usage by consumers.”
At the same time, three members of Congress – Congressional Black Caucus Members Elijah Cummings D-(MD) and John Conyers (D-Mich.) were joined by Oregon’s Rep. Suzanne Bonamici in urging federal regulators to take actions on bank payday loans.
“We urge you to take meaningful joint regulatory action to ensure that no bank, regardless of its prudential regulator, traps borrowers in high-cost payday loans,” the members said in a statement. “Our constituents, and consumers everywhere, deserve better from our nation’s financial institutions.”
The following day, two regulators, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) announced new regulatory actions to address potential consumer risks associated with the products as well as the safety and soundness of operations. The two regulators’ actions are very similar, focusing on a borrower’s ability to repay while meeting ongoing expenses, safe and sound underwriting, and limiting the numbers of loans.
According to Thomas J. Curry, OCC Comptroller, “We have significant concerns regarding the misuse of deposit advance products.”
OCC supervises all national banks and federal savings associations with combined assets of $10.1 trillion, representing 71 percent of total U.S. commercial banking assets, according to its most recent annual report.
Similarly, FDIC Chairman Martin J. Gruenberg said, “The proposed supervisory guidance released today reflects the serious risks that certain deposit advance products may pose to financial institutions and their customers.”
FDIC insures deposits in more than 7,000 banks and savings associations.
According to CFPB’s findings these actions could benefit about 12 million households that borrow payday loans each year, a potential reduction in the $7 billion in annual fees that are generated by more than 18,200 payday storefronts across the country.
CFPB’s report examined 15 million payday loans made during a 12-month period, covering more than 90 percent of the market. Both storefront and bank versions exposed consumers to the risk of being caught in a revolving door of debt. What was sold as a short-term bridge became an expensive, long-term loan. Risky loan structure, loose lending standards, sustained usage and accompanying high costs were cited as characteristics of both products.
According to the report, 75 percent of storefront payday lending revenue is derived from borrowers taking out 10 or more loans a year. For 68 percent of these borrowers, their annual income is $30,000 or less.
Among the findings:
- Nearly one-in-four borrowers received government assistance or benefits such as Social Security, disability, unemployment or welfare benefits;
- The average borrower took 11 loans in the 12-month period, paying $574 in fees for $392 in credit; and
- Despite lender attempts to reject the use of an annual percentage rate (APR), a two-week loan with a $15 fee per $100 borrowed is actually a 391 percent APR.
On banks’ deposit advance loans, CFPB also found that:
Borrowers usually had much lower average balances than other bank customers, suggesting a smaller financial cushion to cover unexpected shortfalls;
- Nearly two-thirds of consumers also incurred additional fees such as overdraft or non-sufficient funds;
- The annual percentage rate (APR) of interest was 304 percent; and
- Most borrowers remained in debt for at least 149 days.
Commenting on these findings, Director Cordray said, “We want to make sure that consumers can get the credit they need without jeopardizing or undermining their finances. Debt traps should not be part of their financial futures.”
Earlier this month and in an effort to heighten Capitol Hill awareness of payday lending’s debt trap, Congressman Conyers convened a briefing that included representatives from the NAACP, Native Community Finance, Consumer Federation of America, Pew Charitable Trusts, and the Center for Responsible Lending.
Also this month, CRL and National People’s Action delivered to regulators more than 150,000 petitions urging the officials to crack down on high-cost payday lending. Also part of the petition drive were CREDO and Green America and Americans for Financial Reform.
For more than a decade, payday lending has been a centerpiece of the Center for Responsible Lending’s policy efforts. The new CFPB findings strengthen earlier independent research by CRL.
Commenting on CFPB’s findings, Uriah King, CRL’s vice-president of state policy, said, “This white paper affirms our long-standing critique of payday lending. The debt trap of payday loans is now official.”
- Created on 02 May 2013
Jewel Burks, a 23-year-old 2010 Howard University graduate and current Atlanta resident won START ATL's "Idea Pitch Session" during the recent symposium at Spelman College.
The competition featured 60-second pitches from pre-selected entrepreneurs in front of a panel of judges for a chance to win a Dell laptop, a $500 Office Depot gift card and five hours of web consulting services.
Burks' pitch was for her mobile app, PartPic, which she started in January. According to its website, www.partpic.com, PartPic was designed to help people discover the right part for repair and maintenance projects. PartPic was designed to help make locating industrial supplies easy by letting users snap a picture of a part to find more information about it or where they can purchase its replacement.
"I have always wanted to be an entrepreneur and have been dabbling with different ideas for a long time," said Burks. "I thought a mobile app would be a great first step to start my journey as a full-time entrepreneur."
START is part of a nationwide series created by digitalundivided (DID), a social enterprise that builds forward thinking initiatives that ultimately change the digital space by increasing the number of Black and Latino women digital entrepreneurs.
The START Atlanta symposium was developed to teach urban entrepreneurs the tools to create and grow successful digital companies.
- Created on 01 May 2013
Although the dictionary calls it archaic, the "management of a household" is one of the definitions listed for the word "economy." Another definition is "a saving or attempt to reduce expenditures." Yet another is "a system of interacting elements, especially when seen as being harmonious." And still another definition for economy has to do with "the production and consumption of goods and services of a community regarded as a whole." As I look at those descriptions of an economy, only the last one partially applies to Black Americans collectively, and that's the "consumption" part.
Every five years, the U.S. Census does a survey to determine how many businesses there are in this country, who owns them, how many persons they employ, and what their annual revenues are. The figures for 2007, while lauded for the increase in the number of Black-owned businesses, revealed decreasing revenues for Black businesses, relatively few employees, a vast majority of them in the service industry.
The 2007 census revealed total receipts for Black owned businesses to be less than $136 billion that, when juxtaposed against an aggregate "Black buying power" during that period of approximately $850 billion, illuminated a lack of business growth and a glut of consumer spending. The average gross receipts for Black firms as a whole fell 3 percent, from $74,000 per firm in 2002 to $72,000 per firm in 2007. Furthermore, a whopping 87 percent of Black businesses had annual receipts of less than $50,000 in that time period. Other statistics disclosed a low savings rate among African Americans and a grossly disparate median income and net worth when compared to other ethnic groups.
The University of Georgia's Selig Center for Economic Growth estimates that the nation's "Black buying power" is rising from $1.038 trillion in 2012 to a projected $1.307 trillion in 2017. The 2012 U.S. Census data will likely reveal a bump in business receipts, but the total will probably be less than $175 billion. Median income, net worth, and savings disparities will likely stay the same and the mythical Black economy will trudge along like a brand new, 12-cylinder, state-of-the-art, top-of-the-line automobile running on only six of those 12 cylinders. We will definitely be looking good, but we sure won't be doing good (pardon my grammar).
That's essentially how we are as consumers. We look real good, but when it comes to how we are doing, that's another story. Maybe one of the reasons for that can be found in some of our consumption statistics. A few years back, the Selig Center reported that Blacks spend more on telephone services, children's apparel, electricity and natural gas, and guess what, footwear. Today, I'm sure hair (someone else's) is in the top five.
How do we measure up in business? In his classic book, Black Bourgeoisie, E. Franklin Frazier stated, "[Black] business enterprises come within the definition of small businesses; in fact, they fall within the lowest category of small businesses. When the first study was made of Negro business in 1898, it was found that the average capital investment for the 1,906 businesses giving information amounted to only $4,600.00. When the latest study of Negro business was made in 1944, it was revealed that the average volume of business of the 3,866 Negro businesses in twelve cities was only $3,260.00."
Was Frazier correct in his assessment of what he deemed the mythical nature of Black business? Was he correct when he suggested the Black middle class was also a myth? He made a lot of folks angry when he wrote, "Negro business ... has no significance in the American economy, [and] has become a social myth embodying the aspirations of this [Black Bourgeoisie] class." As we look at today's statistics we must reconsider Franklin's position, because the numbers reflect the same conditions he discussed in 1957.
Frazier was decrying our definition of "middle class" as one that embodies high incomes and material possessions, e.g., the mink coats, diamonds, and Cadillacs to which he referred, instead of business ownership and economic growth. While we consider the trappings of the good life as "wealth," sold to us by everyone else, of course, we are mired in a dysfunctional – and maybe even mythical – Black economy.
Much of our economic pain in the 21st century is the direct result of our failure to develop a real Black economy, our failure to take care of our collective "household," our failure to save more of our money, our failure to support our own businesses, and our failure to produce goods and services commensurate with our percentage of population and income. Additionally, we have failed to work together for the uplift of the masses, sharing our resources with one another and helping one another as we make our way individually.
The so-called "middle-class" Blacks have distanced themselves, not necessarily physically but mentally, and as Frazier wrote, they have been obsessed "with the struggle for status." And many of the less fortunate among our people spend too much time being jealous and envious of our brothers and sisters who have achieved at higher levels. The result is an oxymoronic "Black economy."
Jim Clingman, founder of the Greater Cincinnati African American Chamber of Commerce, is the nation's most prolific writer on economic empowerment for Black people. He is an adjunct professor at the University of Cincinnati and can be reached through his Web site, blackonomics.com.