Thanks for sharing – interesting post! Did you come across any information on if such a high amount of private label product limits customers’ willingness to come to TJ’s when the store enters new markets? I would imagine there is some period of ramp up wherein customers who are unfamiliar with the products may not want to try them and instead look for their typical grocery store staples, potentially leaving disappointed. Another thing that stuck in my mind was that TJs must have a very sophisticated real estate sourcing function that forms a key part of their competitive advantage – their ability to locate in high traffic areas, predict future occupancy/traffic trends and source products for specific areas based on demographics seem to be core competencies.
Really interesting post, thanks for sharing. One question I have on the model is how scalable it is to second-tier U.S cities where there may be more sticker shock to paying $30 for an hourlong workout class, when some potential consumers likely pay that much for monthly gym memberships. It would be interesting to know whether the Company has considered sub-brands with different offerings to appeal to these markets. Also, how would the Company acquire instructors, its key asset, to work in these second-tier cities? It seems like recruitment would become quite difficult, relatively fast, leading to growth constraints.
Really interesting company. Does Microstar provide any data on return on capital invested? Given the significant upfront (and I would imagine, continuous) capital spend needed to maintain and grow its sizable asset base, how does the company track returns on that capital? Additionally, it seems that the business does best in areas of significant density as it can spread the logistics cost over dense pick-up/drop-off routes – it would be interesting to learn how they manage for growth given this dynamic.