Great insight and great post on TJ’s.
I used to be a Whole Foods fan and liked the products they carried, but it was always at the checkout that I questioned my loyalty when the aggregate amount I was paying for my groceries seemed outrageous. Until one day someone heard my complains and introduced me to TJ’s. I was completely surprised to find great organic products at amazing prices and most importantly product quality and freshness constant over time. With this in mind, I always asked myself why scaling up this amazing grocery concept seemed to be very slow in comparison to Whole Foods who had been able to do it much faster. In part the answer to my question is contained in this post as TJ’s operating model seems difficult to scale because there are significant supply chain constraints and food quality concerns that they have not been able overcome in the pursuit of rapid expansion. In all, it seems that TJ’s being a privately held company is more concerned about keeping its customers happy than delivering strong growth and returns for its shareholders.
I am an Uber fan 100% because it changed the way I commuted to and from places when traveling to emerging markets for work or pleasure (ie. Asia & South America). Traveling in taxis in certain developing countries can be a hassle for foreigners specifically because you always had to have the local currency to pay for the taxi, you are exposed to dishonest drivers that take you the longest way around to your destination, and frankly it sometimes felt unsafe. With Uber, transportation abroad is safe, simple, easy to access which is something that a couple of years ago was unavailable. This being said, I completely agree that they have a lot of regulatory challenges to overcome in their international expansion not to mention facing the power and lobbying of taxi syndicates that are present pretty much in every nation. It will be very interesting to see how they will face this issues going forward.
Great Post and very interesting company to follow over the next couple of years.
From the post I completely understand and agree where the value for all stakeholders is coming from yet I am very concerned about the sustainability of this business model and the hefty margins it enjoys today going forward as the business continues to grow and other properties are developed. I am concerned basically because Wynn Resorts was founded in 2002 and has only developed 4 properties to date which makes me question two things (i) we have not seen the properties perform and remain attractive to guests for more than 15 years in some cases less (ii) if this business model can be replicated to scale given how capital intensive it is to participate in the whole development cycle (purchase real estate, build hotel, operate). I just hope Steve Wynn can deliver on the growth promise he has for the company in a similar way he delivered in the past with Mirage Resorts now MGM resorts.