Hey Snackers,
If you survived the rosé shortage of 2015 or the Four Loko famine that preceded it, this is a warning: a french fry-pocalypse could be coming — Potato output is expected to fall 6.1% in the US (blame early frost and Hurricane Dorian).
Markets dipped to start the week, despite Cyber Monday's completely unsurprising record haul of online sales.
Splurge
Shopify is the Force behind the record Cyber Monday
"BFCM"... That's what Shopify calls the hazy credit card memories of the past 4 days. Now that Black Friday/Cyber Monday is over, we want to highlight another winner (besides omnichannel commerce and shopping on your phone, which we covered yesterday): Shopify.
- $900M of online shopping went through its ecommerce pipes on Friday. Since $7.4B total was spent online on Black Friday, that means Shopify handled 12% of all US online shopping.
The Force... 'An energy field created by all living things. It surrounds us, penetrates us, and binds the galaxy together.' It's almost like Obi-Wan knew Shopify would empower brands to manage their own ecommerce. Companies that want to sell online have 2 key options:
- Use a middleman, aka a platform like Amazon, eBay, Walmart, Target, Best Buy, or Dick's Sporting Goods. They'll take a cut of the transaction.
- Do it yourself. For Allbirds, Kylie Cosmetics, and — even Tesla until recently — Shopify invisibly handled their website, managing the behind-the-scenes of ecommerce from payments to order management.
- FYI, Adobe and Salesforce do this back-end work too (also without you even noticing), snagging monthly software subscription fees for it.
Wall Street sees what Shopify is doing, and likes it... Shopify isn't profitable — never has been. But when you own a growing share of a growing market, investors are usually happy. That's why the stock price has grown 8x bigger the past 3 years. The hope is that soon Shopify won't have to spend so much on marketing to grow — then it'll be able to sit back, charge companies monthly ecommerce fees, and get profitable.
Serve
After missing the first memo, McDonald's finally jumps into Fried Chicken Sandwich Wars
McLate... A full 3 months after Popeye's faced a crispy chicken sandwich shortage (good problem to have), McDonald's wants in. Yesterday, the fast food chain started testing its own caloric version in its Houston and Knoxville restaurants. We know what you're thinking: Didn't fry-master McDonald's already do fried chicken?
- McNuggets and the McChicken Sandwich don't count — they're not "Southern" style.
- McD's has tried multiple other chicken sandwich options, but none came close to Big Mac fame.
- Solution: Steal Chick-Fil-A and Popeye's Southern-style crispy chicken concept, with butter and pickles.
The other other white meat... is worshipped nationwide right now. Southern-style fried chicken sandwiches became profit puppies for a pair of McD's rivals during last summer's Chicken Sandwich Wars:
McDonald’s franchisees are its secret sauce... 9 of 10 McD's restaurants worldwide aren't owned by Ronald, they're actually owned by a franchisee — an entrepreneur who McDonald's licenses its logo/recipes/supplies to in exchange for fees and a portion of their location's sales. Back in July, franchisees wrote a joint letter to McD's asking for a chicken sandwich ASAP... before the Chicken Sandwich Wars. They were right. McDonald's finally admitted it.
What else we’re Snackin’
- HollyWork: WeWork's getting a movie — the screenwriter of The Big Short is doing one on co-founder Adam Neumann's rise/fall
- Econ: Brazil and Argentina face fresh steel and aluminum tariffs — President Trump unexpectedly announced the protectionist policies after both countries' currencies have weakened (that gave Brazil and Argentina an advantage in international trade)
- Worn: J.Crew's sales fell (again) and it was upstaged by its Madewell brand (again), whose jumped 13% last quarter
- Unplugged: Roku plummets 15% after an analyst claims there's too much "streaming exuberance" and cord-cut media companies are overvalued
- Chew: Twinkie's-owner Hostess splurges $320M to treat itself to sugar-free wafer-maker Voortman
- Played: Nintendo's hybrid-ish Switch gaming console was one of Black Friday's biggest winners because the competition simply hasn't whipped up new Switch alternatives lately
Tuesday
- The Motor Vehicle Sales report tells us how many cars are driving off lots
- Earnings from Salesforce and Lands End
Disclosure: Authors of this Snacks own shares of Amazon
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