High-Income Shoppers Flock to Walmart & Jersey Mike’s $8B Bet to Take On Subway
29:15 Share

Building a portfolio with fidelity basket portfolios is gonna like making a sandwich is as simple as speaking your stocks in ets sort like you meets another tackles and managing IT as one fig juicy investment. That that was pretty good. Learn more of fidelity 点 com slash baskets investing involves race， including risk of loss. Fidelity workers services L L C member in Y S C S I P C.

Good morning brew daily show i'm your friend on and I told me how today jaguar hits the reset button with a completely new identity, but can not say the iconic carmaker from .

charity then jersey mike, just cot by out by private equity. And I hope danny, the veto gets his bag. It's once the november twenty eighth let's ride.

Breaking news, out of the music world, there is a new record holder for faster song to reach one billion streams on spotify. The soaring retro duet die with a smile by bruno mars and lady gaga reach the mark after just ninety six days. To me, how many of those have you accounted for?

Now I might be losing my fast. Well, I might have to hang up the mike because I have never in my life heard that song, even for a second was worse. I have never even heard the second fastest song to reach a billion streams either.

That is seven by john cook and a lot to. But then finally, three, four and five are flowers by mary sires, expressed by spring, a carpenter, and stay by kerri. But I apologize to bruno and to lady gaga, because I have just been sleeping on your game.

Never heard the song, the song is incredible. You just listen to ten seconds heard you're like nothing, but listen to IT. You're going to listen nonstop like I have. It's really.

really good song. Now a word from our sponsor, yahoo finance, you know, that ever tell you the story of the first stock I ever bought .

for as much as we hang out, surprised and never came up?

IT was sure. Win Williams, the paint company IT was winter at the time. I thought that buying a paint company before I was time for spring and renovations .

was a good idea. I I follow.

The only issue was I was a bit of a stock market movie, so instead buying ten shares. I fat figured IT and bought one hundred shares at the time. That strange lately to about forty thousand dollars. I did not have forty thousand dollars to invest in.

right? So you bought IT on margin.

Somehow I bought IT on margin. And mei got a notification from my broker saying, like, hey, you do not have the funds for this, I don't know, was all a little bit murky, and I panic, hold most of IT right away. But the moral of the story is the place, the mess around in test new ideas is on yahoo finance, not in your broken age account. Yahoo finance has real time market data, so you can construct a portfolio and a watchlist without putting real money on the line. Much more responsible than college tabby.

To avoid that mistakes like tobes head to yahoo financed com to play around with their portfolio feature that yahoo finance dot com amErica just had a device of election in flood. If there's one thing that unites tes everyone in our country, it's that we buy stuff from walmart.

Yesterday, the united states is biggest retailer, announced a mama third quarter and raised its guidance for q for the key holiday shopping season, shares gained about three percent to hit a new all time high. There are more than sixty three percent this year compared to the S. M.

P. Five hundreds, twenty five percent gain. What's working? everything? U. S. Comparable sales grew five point three percent, crushing expectations of three point seven percent. In e. Commerce, walmart is looking like a spitting image of amazon with online sales of twenty two percent. E commerce now accounts for eighteen percent of walmart total sales plus people .

are buying and not just things for their data day needs, but also those want to have items after declining for eleven street quarter sales of general merchandise, which doesn't include grocery, have increased the second corner in a row, walmart is looking like sake one barkin, the open field, the head of the holiday shopping season. It's got a head of steam and look into run some .

people over and you know who driving most of the growth is rich people. The one percent the households are making over one hundred thousand dollars a year or more accounted for seventy five percent of the market share gains that wall mart has made.

And this has been a concerted effort by wilmarth dating back to two thousand thousand to refresh their items, refresh their stores to go after wealthier shoppers who might be trading down for more value. They released this premium food brand that we had talked about previous on the show called Better goods that has things like old milk, uh, non daily ice cream and Carter mom jam and kerry chicken empanadas. That's just one part of their strategy to go after those wealthiest shoppers who account now for the second biggest cord of all shoppers at and .

interesting ly enough that uh, households making a hundred thousand dollars are typically amazon's bread and butter competence. So you mentioned the amazon walmart is infringing. They're stepping on their turf because, uh, walmart has created this really strong online Operation that is almost reveling walmart at this point, you can now buy online.

You can pick up a thousand of stores. They have this program called walmart, walmart plus, where you get same day grocery delivery. So they really are trying to take business away from walmart because amazon, sorry, yeah, take business away from amazon because IT has been this big, pushed in poll fight.

Walmart online sales, i've grew twenty two percent. The united states in the last quarter. So it's clearly got its site set on the biggest e come player as well.

So what could slow walmart to role? Because IT really is on a role. Very six one arkley ask. Well, tarifa.

President elect trump has pledged to enact sweeping tears up to twenty percent across the board, up to sixty percent on china, that that will impact retailers among the worst of any industry. Walmart CFO came out yesterday and said, look, we are not going to be immune. Tf, we never want to raise Prices.

But if tabs do come down the pipeline, IT will probably cause Prices to go up for consumers. So the biggest retailer or in the united states making this warning is probably insulated Better than other retailers like target or smaller ones. But IT issuing that warnings and consumer Prices may go up if this if these terrace uh do come to pass and that is certainly gonna send a shiver up the silver of the spine of uh, a bunch of of the retailers as well.

But as you mentioned, walmart is actually decently situated to weather terrify. About two thirds of its products are actually source within the united states. And to remember, a lot of walmart business actually comes from its grocery division.

When you're not getting it's not supplying its groceries from at china, that is all source more, more locally. Um so that is one thing that can sixty percent of its revenue came from the grocery category last year. So potentially, it's a little bit more insulated.

And one thing that walmart CFO has said is that there are general merchandising products typically have a little bit of a higher markup than grocery. So they have some wilder room there. If they wanted to choose to not pass on those cost, they could just eat into their own margin a little bit.

So they do have some kind of slack to play with even though that these tears are something that they they have to kind of broadly say, like kate Prices, mica, but they are trying to say will do everything we can to pass those Prices on to consumers where possible. Private equity giant blackstone took a break from rolling up companies to focus on roles and hogue taking a majority stake in jersey. Mike, yesterday that values a sandwich chain at around eight billion dollars, including debt unions and extra olios in vinegar jersey.

Mike is the second largest sandwich company in the U. S. By sales falling just subway, but I didn't start out that way. Back in nineteen twenty five, mikes founder Peter kanka ro opted to skip calls, instead barred one hundred and five thousand dollars at seventeen years old, with the help of his high school football codes to buy the sandwich shop he had grown up working at.

Fast forward to today and jersey, mike has more than three thousand locations, but kangaroo and blackstone think they can reach ten thousand locations eventually. The deal also makes kangaroo one of the five hundred Richard people in the world with a network of seven billion dollars. So not bad for the seventeen year old. Now jersey mix locations make about one point four million dollars per unit, more than double that of its rival subway. So IT looks like black stones got .

themselves S A winner. IT looks like, I mean, if i'm subway, I am sweating. A subway has thirty thousand locations, so a lot more than jersey mix.

Baas, you just mentioned, they don't make nearly as much on a per store basis. Jersey mike system sales have boomed in average of twenty four percent over the past five years. The industry average for rivals like Jimmy johns firehouse subs is five point two percent. So whatever jersey, my secret as we can get into why it's been so successful uh, is really leading to tremendous growth. And then getting bought by by black song, which has two hundred and twenty billion dollars, can absolutely put a the jet fuel on on your growth and they can get to ten thousand a locations world, right from just three thousand now.

So I do just want to compare jersey mix in subway. Once again, jersey mix is selling for eight billion dollars with three thousand locations. Subway sold for nine point six million doors with thirty seven thousand locations.

So subway had twelve times more locations but only sold for about twenty percent higher value. So clearly, franchise is success. The fact that jersey mix is making one point three million dollars per unit is more important than the overall unit count here when you're looking at private equity valuations.

And I think jersey max has had a very successful marketing strategy of people who are in our area. In our watching T, V, might know that danny divide, the actor who was a jersey native, was hired in twenty twenty two to be the company 的 spokesman， and he does a great job on those commercial. So a huge win for the jersey.

sure. I think jersey mike, her, his name is not jersey. Mike is now probably the second most famous person out of the jersey shore after Bruce springsteen. And this has been just A A great business success story. I'm sure they will study what Peter cancer did from buying this uh chain at seventeen years old with alone from his foot all coach to grow IT into an a billion dollar sub bec.

I thought you're going to say snoopy was the most the second are the most popular name from jersey shore. But you know, brushing ing works to the carbon jawa is making headlines for dropping a colorful and confusing new ad to announce its refresh brand. The only issue is, as many have pointed out, there's no cars in IT.

Instead, a group of models dress in futuristic getup, and I popping make up kind of bigger around to some techno industrial beat in a size. I looking the landscape. There's an elevator involved.

It's a whole thing. But jacky is hoping IT is the start of a long road back to relevance for the one's iconic british brand that has been relegated to a footnote of the modern car industry. Jaguar sold fewer than sixty seven thousand cars globally last year and less than eight thousand in the U.

S, down eighty percent in twenty seventeen. So I made the bold choice to switch things up, introducing new minimal logos and ambush to replace the window and growling tat badge. IT also dropped a mismatch of new slogans like delhi te, ordinary, live, vivid and copy nothing to try and paint a picture that this paint your bond village jacky's anymore.

And the lead up to this rebound, jack war cold models, which a CEO said had close to zero profitability until is producing just one vehicle, the f pace S, U, V. But now IT is replacing everything gas powered in launching three new high and evs instead. So they are really starting .

over from scratch is not a rebrand. A this is a refresh. They're starting over from a clean sheet.

They want you to forget everything you knew or thought you knew about jack, or maybe didn't even know, and adopt their new mentality, their new brand of a modern high and E V company. And they are clearly moving up market here. So for the past few decades, java has been competing with bmw n version.

So upper middle class, upper class, but not that that luxury level, they want to compete against the porch and bends of the world. And it's fascinating. They just don't sell in the cards, say they stop production for multiple years.

They're just producing this one. S U, V. That they are gonna stop producing next year and then completely restart a new in two thousand twenty six, which is three E V models, uh, a coup G A G T coop, a sedan and a utility vehicle.

We don't know what that is going to be an S U V or not. So there's just going very slim down. There are not going to trail, try to sell a lot of cars at all and just hope to to increase the Price point and sell to more affluent customers.

One thing exactly about this new image is that they expect just fifteen percent of the existing of their existing customer. So this that is pretty insane. There is no real plan b here. They are going all in on plane. There are going all in on luxury evs.

From the add perspective though, a lot of people are saying this is a bit of a head scratch because if the goes to sell cars and you show them to add with dancing models, it's going to be hard to maybe sell those cars. So that was not a very controversial take, but jaguar was said, like k, we're trying to break away from the traditional old money aesthetic of jaguar to this new brand new, colorful, bold. Uh, I mean, it's like a word salad of phrases that they put out in association with this ad.

They said, eight hundred people have worked on this rebrand. And the guy who let IT joke that we have not been sniffing White stuff. So really try to drive up press, really try to go bold with this. We will see what the cars actually look like.

You are deep and social media about the three brand. What was the general reaction?

The general reaction was like, if you are trying to reintroduce yourself to the world, like you shouldn't do IT with some esoteric high level concept like you need to just show. Like kay, we are still the brain that makes these high quality cars that you guys have used to notice by. So people are saying that they may have just gone too far down the like conceptual path, but this is just the start, the rebel.

And so maybe there are there are obviously going, uh, unveiled some cars later. Actually, they are unveiling their first car at art puzzle this year in early december. So I guess circle your calendars there if you want to see what their team that was sniff and White ff came up with that. Next, northwestern is rethinking what a college football stadium can look like.

It's almost time to break out the lights, rats and jingle ling bells.

And with sonus, you'll be able to hear the Crystal clear, highest quality sound for all the festive music and movies this holiday season.

Sonos is the perfect gift for both yourself and your family and friends, whether you're in charge of the holiday party or in search of a gift that will really impress the in laws. So s has got you.

So those products look just as beautiful as they sound, and you can mix and match their products to build your very own sound system.

deck your holes with a ono smart speaker, and enjoy the the sound right from your couch .

and has great for everyone on your list. Visit sonus dot com slice brew to rap up your holiday shopping. That is sonus dot come flash brew in the noisy .

world of advertising is easy to get lost in the crowd. If your brands message isn't perfectly targeted at your ideal audience, it'll fade into the background. The good news is linked in ads can find tune B2B cam paigns and hel p the m end up in fro nt of the rig ht peo ple.

Linked in ads helps you reach the professionals most likely to connect with your ads. With linton capabilities, you can target your ideal audience by job title, industry company and more. Its targeting .

and measured tools have helped B2B tec h com panies gen erate two to fiv e tim es hig her ret urn on ad spe nd tha n oth er soc ial med ia pla tforms.

Start converting your B2B aud ience int o hig h qua lity lea ds tod ay lin ked in ads wil l eve n giv e you a o ne hun dred dol lar cre dit on you r nex t cam paign. Go to linkin dot com flash M B D to claim your credit. That's linton dot com slash M B D terms and conditions apply linton the place to be to be.

You don't typically associate northwestern university with college football innovation, but that was before monday when IT revealed the blueprints for a new stadium that could literally change the game. Ryan field, the same name as the old stadium that's on the demolition block, will cost eight hundred and fifty million dollars, making IT the most expensive college footles stadium ever built.

IT is the brainchild of the ryan family, north western's biggest st honors, who will finance the majority of the project with the school chipping in a little. So what's so different about this stadium? You know, besides the nfl level Price tag, well, it's kind of a stadium for ants with a capacity of thirty five thousand people.

It'll be the smaller city in the big ten and S C, C, and has fewer seats in almost any major college venue. It's all about giving the fans who do come and experience that's Better than T, V. For instance, it's a vertical cantal leaver.

Design means that the worst c and right and field is one hundred fee closer to the field than the most expensive sea at michigan's big house, which has that classic bull structure. Tell me one of the ryan sun's pat junior compared existing stadiums to driving a model tea and that his family was building something for, quote, the world you're moving into. Do you think they are .

going to accomplish that? Yeah, I mean, IT is a both move to reduce your stadium capacity by thirty percent. Uh one thing that they did say that is that the overall footprint of the property is actually going to be seventy eight percent larger and that is because they constructed about two hundred thousand square feet of just shops and you lounge areas and places where you can hang out around the stadium because what they observed when they were trying to set out to build this field is that upper bowl seats are just really not that popular. Yes, they are cheaper, but you don't have a great view the game.

So what they found was that people kind of migrate down to hang out because they want to be part of the game, the atmosphere, but they want to be close to the action. So they usually go down the lower bow or just hang out near the concessions areas. So they're like, what if we just got rid of that entire upper section, which is the most expensive bill, the least revenue, and just gave people more places to hang out so you can see the thought process here of going to smaller more um you know fan ford experiences. So I think it's a it's a pretty good idea.

And another major consideration was motivation and revenue maxims ation, which are very business terms. So that way, the way you have to think in the N C, A now a with IT becoming more of a quality professional sport, the previous stadium had no, none of those luxury boxes, premium seating, clubhouses, where you really can charge people a lot of money.

So they just, we're making that much money, but to make you have to make money as a college athletics partment now is not even a question because coming through the pipeline is a major N, C, A settlement that would allow that would allow schools to pay athletes directly. That's house first. N, C, A is in the settled phase right now.

If that comes to the pipe, then north western might be on the hook for essentially a twenty million dollar payroll. They need to make money from these stadiums. So what are you going to do is how many college for home football, all games.

So they're in out of three hundred sixty five games, six days of the year, six or seven. So they created this, a stadium to not just host foobar games, but to host high school champing ships and a host all these other sort of events, concerts as well, to really monetize a stadium in a way that that they hadn't before. Uh one thing that .

you did mention is that a lot of the revenue does come from those premium seats and around ten percent of the seeds in this venue will be higher Price. Premium areas will cover forty to fifty percent of the revenue each game. So IT really is there.

They're hoping and and saying that these higher revenue seats do cover the rest of the kind of the cost of the stadium. And then one thing that was interesting, uh, the typical old ryan field had forty seven thousand seats, but IT had one section premium seating seating this year, the wall cats played the first four games in a twelve thousand sea temporary stadium. But the athletics director said that they actually made more revenue per game in the twelve thousand seat arena because of these premium areas. Then the forty seven thousand reno you I can't say enough how much IT is important that you have these premium sections as IT drives so much revenue is less fun. Now IT is less fun unless you have the money to buy a prem.

Will will happen with into a done and Steve ballmer for the clippers. I think he did not. He reduce the amount of club seating to create more fan experience.

Again, he's more money than god and doesn't really need to you drive revenue maxims ation like north western. With a huge payable bill looming, let's spring to the finish with some top news headlines. President election frp continued his hiring spray to fill out his administration.

Yesterday, he nominated canterbury z chilled CEO Howard latinic, the cocher of his transition committee, to lead the commerce department, which is focused on expanding U. S. Economic growth and boosting domestic industries.

Lick was one of those people aiming for the position of treasury secretary, so this drops his name out of that bitter contest. Trump also nominated lindeman c man, the other transition coaches and former CEO of W W E as education secretary. And he selected the celebrity T V host doctor oz to head up these centres for medicare. And yeah.

let neck was aiming for treasury secretary by getting commerce sector is probably a good compromise because you still have a role in promoting economic growth. Doctor oz might have the most impacting role though, because he will oversee programs that account for a quarter of the federal budget and also provide health care to around one in two americans. So he has a big influence over the snacks administration.

Then london week man is interesting to she's been pretty vocal about the fact that higher education has been kind of feeling the workforce. So she's been advocating for a to for jobs, require less degrees and then also a increase access to technical education, more career focus education. So three vastly different profiles, but three people that trump kind of things are coming from the outside and can help you change things up in washington.

SpaceX is starship the biggest rocket ever created? Sod on its sixth test flight yesterday, proving that practice makes perfect, or at least less explosions. All the super heavy booster manage to avoid going up in flames.

This time, it's attempt to create the chopstick catch and pulled off the last launch, didn't go to plan with mission conditions, forcing a splash down in the gulf of mexico instead. IT did, however, succeed in transporting its payload into sub orbit. A single banana made a trip and completed the important objective of the test flight, which was recognize an engine in space for the first time. So all in all, a pretty successful mission. Sounds.

the chopsticks s yeah, but that was the biggest part. I know we all wanted. See the chopsticks, right? We were watching.

We were like, and when they said, ah, we're not going to do the catch is prety disappointing but yes, there's the sixth flight of starship. IT seems to be improving every single time. And h there were certainly political overtones there as well.

President like trump was in texas along with, uh, his very good buddy. Uh, now elan must to watch starship take flight. And NASA is very much looking ford to seeing starship do more of these and complete more successful ones because there not going to the they're not going to the moon or mars without starship being successful.

So he Carried its first payload though, a banana, banana, a single banana, a single banana. Maybe eventually, soon, IT will, a IT will Carry some humans. You ve had the mile high club.

Now try the mile high burger. Delta announced a first of its kind partnership with shake shack to serve edberg ers to passengers on some flights this is boozy airline were talking about. So the offer won't be available to everyone.

It'll be served for people in first class on domestic flights departing from boston that are at least nine hundred miles long. But if all goes well, delta says shake shack is coming to more airports come twenty twenty five to be. I'm excited for this. The only time I have shake shack on a plane is when I buy IT A G F case terminal for bring IT on board and make everyone else.

This is a little risky though, because shake shack doesn't want its brand being associated with, you know, a soggy or robbery product. They are cooking at the burger on the ground that they will reheat IT in the air, but that has its limitations. That being said, I absolutely love shake checks. So getting a shack burger in this guy, that little you might make me fly delta, although those limitations are a little bit annoying. Gotto fly out of boston have to be over nine hundred miles and gotto be first class.

Yes, I feel like boston telly .

or boston to let's do IT.

It's worth for the shack burger finally IT seems airbnb s grand plan to let play gladiator in the calcium has a rafle some togas in rome, italian officials have pushed back against the rental giant plan to turn their world heritage site into an airbnb experience in promotion of the new gladiator to movie coming out, the company said, I will select sixteen guest to participate in two private events next year, where you can sumeria yourself in ancient times with sort on combat. We are not disneyland. We are rome, italian politician. And so fox said in a statement last week, is L, B. Be going too far here?

I think it's italy we're talking about. They very much treasure their ancient monuments. And I was thinking whether this could happen in the united states. I don't think we have such of reference for our historical buildings.

Imagine someone want to throw a major at fanie hall, or like uber ter mystery a monochromator, if you wanted to tailgate at the alo or something. I think we'd be like, sure, whatever you know, these things are not old. We don't care so much.

Lets have some fun. So maybe the american mind can copy hand how much a level of tradition is imbued in cost me. And also I think it's just A B, A B at an american company coming in and maybe cheaping what what they consider even what is like a very, very remarkable building that, you know, that's over two thousand years old.

I mean, IT would be sweet out. Can you imagine, you know, living in doing some sort on.

To come back and that's why I am like, let's do IT. I don't live there. So we let's do IT at let's do IT at the affiliation al hall, right?

That is all the time we have for today. Thanks so much for starting your morning with us and have a wonderful wednesday for any question, comments or feedback. Ks, send an email to morning brew daily at morning blue dot com. And if you are enjoying the pod, by all means spread the love and share E T with someone who you think would benefit from a dose of business news in the morning for anyone who needs some direction. Tobias, here with some instructions.

I want you to share the podcast with someone who you do the gladiator in rome. But what's that? Oh, it's sixteen. Guess, guess you're gotta share today's episode with fifteen of your closest friends. I don't have .

fifteen closed friends. Good OK, let's roll. The Emily millions is our executive producer.

Raman luu is our producer. A lidia gram is our associate producer. You change a ogi is our technical director. Billiam ino is an audio you going to use, see my snack here and makeup. And number thirteen, original italian devon emmy is our chief content officer and our shows a production of morning brew.

great. So they kill. Let's run back tomorrow.

Let's check in on the future. You what action are you taking today to set up your finances and well .

being for success? That's one question extractors can help you answer. They offer an innovative range of E, T, S across all major that can help you build a diversified portfolio.

They also offer expert insight to help you build your market investing knowledge.

Invest in your future self today. Head over to extractors dot com to get started. That's extractors dot com. Diversification does not guarantee against the law. All investments involve risk, including loss of principle, information on the funds objectives, risk factors, charges and expenses can be found in the funds perspectives at extractors dot com, really carefull before investing distributed by alps distributors in.