NorthWest Arkansas Community College will hold the official grand opening of its new Student Success Center on its Bentonville campus Thursday (Feb. 5) at 2 p.m.

This new space, designed to support the successful transition of students into the NWACC community, is on the second floor of the Becky Paneitz Student Center.
 
Dr. Evelyn Jorgenson, president of NWACC, will provide brief remarks at Thursday’s event. The public is invited to attend.

One of the newer student housing complexes in Fayetteville, Sterling Frisco, a 640-bedroom complex, was sold this week for $49 million, according to a release by the purchaser GMH Capital Partners.

GMH purchased the student housing development located at that corner of Lafayette Street and West Avenue near the University of Arkansas from Specialized Real Estate Group and Sterling University Housing of Houston, Texas. The complex cost about $28.5 million to construct in 2013 and it opened early last year.

The deal includes 219 units and 640 bedrooms, each with its own private bathroom. GMH plans to add other upgrades including increased bandwidth with speeds up to 5x faster, Wi-Fi in all student living areas, enhanced cable package with digital HD service and DVR's, upgraded card access and video surveillance system as well as additional outdoor living features to the pool patio and rooftop terrace.

"We are tremendously excited to have Sterling Frisco kick off our re-emergence back into the student housing market, said Jim Kirby,” executive vice president of GMH Capital Partners.

The $49 million purchase price of Frisco Sterling equates to roughly $76,560 per bedroom. The bedroom rent will range between $599 and $900 per month, according to the Sterling Frisco website.

Jason Hendren, a former partner at Friday Eldridge & Clark, has joined the Rogers, Ark., office of Wright, Lindsey & Jennings.

Hendren will be part of the firm’s medical malpractice group, where he will continue his practice defending healthcare providers and facilities in cases of alleged malpractice, as well as handling cases involving pharmaceutical and medical device companies in connection with products liability litigation.

“Jason is regarded as one of the top medical malpractice defense attorneys in the state. We are excited to have an attorney of Jason’s talent and reputation join our firm. He fits well with the culture of the firm and is a welcomed addition,” Edwin Lowther, Jr., managing partner for Wright, Lindsey & Jennings, said in a statement.

With almost 20 years of experience, Hendren has handled several hundred malpractice cases defending hospital systems, pharmacies and long-term care facilities, as well as individual physicians, physician assistants, CRNAs, nurses, nurse practitioners, pharmacists, ophthalmologists, podiatrists, dentists and orthodontists across Arkansas.

In 2013, Hendren served as President of the Arkansas Association of Defense Counsel and received an “Exceptional Performance Citation” from the Defense Research Institute (DRI) for his service. He serves as a DRI State Representative for the State of Arkansas, a member of the Arkansas Bar Foundation Board of Directors (Northwest Bar District) and a member of the Bentonville Public Schools Foundation Board of Directors. Hendren is a Barrister of the W.B. Putman American Inn of Court and (Sustaining) Fellow of the Arkansas Bar Foundation.

Hendren, received his bachelors degree (with honors) from the University of Arkansas, and his juris doctorate (with honors) from the UALR William H. Bowen School of Law.

John James left the comfort of a successful business to lead an intense $100 million venture fund in Northwest Arkansas. Why? Because James says he’s more interested in the journey than the destination.

It’s been six years since James and his partner Terry Turpin founded Acumen Brands in hopes of selling scrubs to medical professional’s – a career James ditched following completion of his medical residency. 

James, a self-professed nerd and tech junky, said he is far more comfortable starting a business than running the day-to-day operations of a successful venture like Acumen Brands. Fayetteville-based Acumen grew exponentially in 2012 from its Country Outfitter branded business that James and Turpin founded in 2011. 

“It’s a pretty good success story. We started Country Outfitter to sell boots and other western apparel online. We cracked the code on Facebook on Labor Day of 2012 and went from 0 Facebook fans to 7 million in just four months time. The business went from $1 million in 2011 to $15 million in just one month by the end of 2012,” James said last week during the University of Arkansas Business Forecast Luncheon he moderated.

James told business professionals Thursday (Feb. 5) at the Cross Church Summit luncheon that he looked up last year to see a company that had grown from three to 200 plus employees in five years and he felt restless in the role of CEO.

He told The City Wire that his formal title at Acumen is still founder and he’s a very satisfied investor and board member but he reached out last year to Dr. Steve Graves, an organizational strategist and life coach, to help him transition into a new role. That new role may be larger than just a career change for James.

James is working with a group of local investors to raise $5 million toward funding an entrepreneurial residency program with a goal of creating a viable startup each month.

“Given that Acumen is on an upward trek, it has given me the opportunity to look back at the innovation stage of companies, which is what I am most excited about,” James said. “I wanted to get back into the community and mentor some of these startup founders and get some capital funding around them and teach this young class of entrepreneurs about how to start a business.”

He told The City Wire that when students graduate from college they shouldn't be encouraged only to take a corporate job. He believes entrepreneurship should be more of an option, but it will only be a broader option if there is a supporting community with mentors and funding.

“I am working on the final stages of the $5 million funding for this residency program. We will try and start a new company every month or every other month with a team of experts around the table. You need designers, developers and people that drive traffic online and someone to lead the company,” he said.

James said the residency program will start small but hopes to eventually grow into an incubator-type program that could accept multiple teams. He said there would be resources invested in the team that would raise their chances for success. His vision for the program is based on the medical residency model — See, Do, Teach.

$100 MILLION FUND
On Thursday, James had little more to offer on his plans to raise $100 million in capital venture funds in cooperation with Newroad Ventures, which he announced last week.

“It’s too early for details, but I will say the region really needs this type of fund and I want to be a part of it however it shakes out. I want to help with the fundraising and the advocacy of it,” James told The City Wire.

He said $100 million is a challenge and he’s more than ready to do his part. Last week James said there are commitments for almost 30% toward the $100 million. 

“I don’t want to over-speak now but I promise to provide more updates as the funding toward to $100 million goal takes place,” he said.

James has been in the trenches trying to raise capital for his own ventures, and shared that six years ago he could not raise $100,000 to start Acumen Brands. James said when he really needed the early capital to grow the Acumen it couldn’t be found in Arkansas. But once it succeeded the suitors lined up.

“We are missing a seed money capital venture fund in Northwest Arkansas. You can’t tell me that with the world’s largest company in our own backyard that we can’t fund our own capital venture pool,” James said.

Northwest Arkansas, a cradle of entrepreneurship, is well-versed on the importance of the small business community. The region helped birth three Fortune 500 companies that still call it home.

“Small businesses are critical to the success of Northwest Arkansas and the rest of the nation. If you don’t believe me listen to these stats,” Andy Wilson, operational leader at Cross Church said as he opened The Summit panel discussion on Thursday (Feb. 5) in Rogers.

His stats were these:
• There are 28 million small businesses in the U.S.;
• 70% of all small businesses are owned by a single person;
• 57% of all workers are employed by small businesses;
• 44% of the U.S. payroll comes from small businesses;
• 77 million make up the small business workforce; and
• 60% to 80% of all new jobs are created by small businesses.

He asked three of the region’s small business entrepreneurs — Rick West, CEO of Field Agent; John Rausch, CEO of Rausch Coleman Homes; and Dr. John James, former CEO of Acumen Brands — to discuss leadership qualities, culture, and how they might reinvent the future.

LEADERSHIP/MISSION
“General Colin Powell said a good leader has to be able to simplify things, cut through the arguments and debate and ensure that everyone in the chain can understand the mission,” Wilson said.

West, joked that Field Agent is a company full of Millennials who don’t care about lengthy mission statements but simply want to understand why. He referenced a Ted Talk by Simon Sinek that his team at Field Agent was able to follow.

“We learned early on that if we could really understand why we are in business, people would follow the ‘why’ and not the ‘what’ we do,” West said. “We are tech company at heart and we are changing the way data is gathered and used.” 

James, the founder of Acumen Brands, spoke about the company’s biggest success story, Country Outfitters. He said it’s a joke to try and wrap up the leadership or mission in just a few words.

“It took us six years to get there. It’s about finding holes in the market and iterating to fill them. It started out pulling medical scrubs off of shelves and selling them online but we kept iterating until we hit upon the winner,” James said. “We are about trial and failure that’s our culture. We say if you’re not embarrassed by your beta version of your product then you probably launched too slow. We break things and move fast.

Rausch joked that breaking things and moving fast might work for tech companies but he doesn’t recommend it for homebuilders. 

“We value our customers because we know the home they buy could be their largest purchase of their lives. Our mission is to build the best home we can for the value. That never wavers,” he said. “That message doesn’t start with me, it starts out in the field. Our organizational chart is inverted and I am on the bottom,” Rausch said.

Wilson asked the panel to think about what it is their employee base wants from them as leaders.

“Day in and day we can talk about details but what employees really want from me is to know where we are going and more importantly do I have the confidence to know that we can get there,” West said. “It sounds really simple that’s it in a nutshell.”

Rausch said for him it’s about providing clarity (transparency) and empowering employees to go for it when there are constant changes happening in their industry.  Wilson added that without transparency from the top, barriers can build below that can render a company ineffective. James agreed, saying his employees seek out a confidence and assuredness from the leadership. 

“You may have to fake it ‘til you make it, but leaders have to exude confidence,” James added.

REINVENT THE FUTURE
Wilson asked the panel to talk about how they might reinvent the future at their respective companies citing a quote from “Good to Great” author Jim Collins in that the future can’t be predicted but it can be created.

James recalled a time in Acumen’s past when they were looking for what turned out to bey the Country Outfitter success story. He said they were moving quickly and failing fast but when they saw a ray of light the whole team rallied around it. He said it doesn’t take long for consumers to tell you what they think. But it’s critical to listen and adjust quickly.

West said at Field Agent the important aspect is to stay between the rails because the data world is vast. He said the way Field Agent is recreating the future is not by coloring the data differently or analyzing it with a story. He said Field Agent seeks to find solutions to problems or questions that exist. That means staying focused on the questions and finding solutions through crowd sourcing. It doesn’t start at the top but it builds from the bottom. 

James said creating a culture where thinkers are not afraid to fail is the best to keep creativity alive within a company.

“We started out great at Acumen but we lost some of that when raised a little money. It took some time to get back to the mindset,” he said.

Rausch said creativity thrives in areas of necessity and that’s seldom at the top of any organization. 

“For us, our best ideas come from the field and things we see in the industry. A leader has to be willing to listen and try the ideas of others. ... They also need to surround themselves with experts and mentors that will be honest and provide crucial feedback even when you don’t want to hear it,” Rausch said.

The entire panel agreed that customers can’t be discounted in the creativity and innovation equation and businesses of all sizes have to listen to what customers want and exceed those expectations whenever possible.

Van Buren-based USA Truck recently secured a $170 million credit line backed by several banks that will help the trucking company refinance debt at a lower interest rate and meet capital needs.

The deal provides USA Truck with almost $100 million of liquidity at closing abd “substantially” increases its access to capital, according to a statement the company issued Thursday (Feb. 5).

“The new credit facility is a direct reflection of the significant progress USA Truck has made in improving our business and operational effectiveness,” USA Truck President and CEO John Simone said in the statement.

With a better than expected third quarter net income of $2.717 million, USA Truck is on track in 2014 to end five consecutive years of losses. The third quarter net income of $2.717 million was an improvement over the $602,000 loss in the same quarter of 2013. Total revenue in the quarter was $153.618 million, better than the $141.822 million in the third quarter of 2013 and just above the consensus estimate of $153.4 million.

The transaction will result in a one-time, non-cash write-off of around $800,000 in the first quarter of 2015 related to unamortized debt issuance costs associated with the company’s previous credit arrangement. The agent for the deal was Bank of America Merrill Lynch. Other banks in the deal include SunTrust Bank, PNC Bank and BMO Harris Bank.

USA Truck shares (NASDAQ: USAK) closed Thursday at $28.55, up 42 cents. During the past 52 weeks the share price has ranged from a $30.51 high to a $13.29 low.

Urologic Specialists Inc., founded more than 60 years ago in Oklahoma, has now expanded its services into the Fort Smith region.

The group, which consists of 21 urologists, is now offering around-the-clock urology coverage at Mercy Hospital Fort Smith, as well as outpatient clinic services on Monday through Friday.

The urologists provide treatment options for conditions that affect the male reproductive and urinary systems and female urinary system, including: Kidney stones; overactive bladder; incontinence; urinary tract infection; bladder and kidney cancer; prostate cancer; erectile dysfunction; and testicular cancer.

The new clinic is located in Mercy Medical Tower, 2713 S. 74th St., Suite 104, in Fort Smith.

Wal-Mart has created a new executive position in its China market. The retail giant has appointed Maggie Sans to senior vice president and chief corporate affairs officer in China. The position was created with the goal of improving the retailer’s reputation after accounting, inventory and food-safety missteps in recent years.

“She will be responsible for elevating our corporate reputation in China and helping shape the political environment for our continued growth,” Dan Bartlett, executive vice president of corporate affairs, noted in the memo to employees on Friday (Feb. 6). Sans will oversee company initiatives that include food safety, sustainability and energy saving, he noted.

Ray Bracy, senior vice president of corporate affairs for Wal-Mart China, will return to the U.S. in the coming months. He will retire in January, according to the memo.

“China is a critical market for us, and we must have the right people in place to lead our organization on the policies and regulations which allow us to operate successfully in this market,” Bartlett said in the memo.

The Fayetteville Chamber of Commerce announced the names of this year’s NWA LeaderCon honorees that will be officially recognized for their leadership services at a ceremony at 2 p.m. on April 2 at the John Q. Hammons Center in Rogers.

This year’s Don Soderquist Servant Leader award will be given to Mike Duke, retired President & CEO of Wal-Mart Stores Inc. The Trailblazer Award winner is Cameron Smith, president of Cameron Smith & Associates. The Tomorrow’s Leader award is being presented to Nick Nabholz, business development officer for Nabholz Construction.

In its third year, the NWA LeaderCon business conference seeks to provide a local and affordable opportunity for professional development for individuals and/or corporate teams to make connections with like professionals, while recognizing outstanding leaders throughout region.

For additional information please go to the conference website.

Steven Plaisance has taken over the role of CEO for Arvest Mortgage Co. and Central Mortgage Co., a wholly owned subsidiary of Arvest Bank according to a release from the bank on Monday (Feb. 9).

Plaisance became president and chief operating officer for Arvest Mortgage Co. (AMC) and Central Mortgage Company (CMC) in March 2012, and will retain the role of president in addition to his new title. He will report to Arvest Bank chief operating officer Phil Porter. 


He began his career with Arvest as a part-time teller in Rogers in 1989 and joined AMC in 1991 holding a variety of leadership positions since 1996. Plaisance is a member of the Mortgage Bankers Association, a national group that represents the entire real estate finance industry, and other industry associations. He is a two-time president of the Oklahoma Mortgage Bankers Association.

AMC and CMC, which have locations in Arkansas and Oklahoma, regularly originate $1 billion-plus in mortgage loans annually, and currently service a combined $38 billion in mortgage loans.


“I am excited about the opportunity to lead our talented mortgage team into the future. Arvest is dedicated to serving mortgage customers through originations and servicing, and I look forward to continuing the many good things we have done in these areas.” Plaisance noted in the release.

Plaisance earned a bachelor’s degree in business administration from the University of Arkansas. He’s also a 1998 graduate of the Mortgage Bankers Association Future Leaders Program. He and his wife, Katy, live in Tulsa and have three sons.

Often the forgotten city among Northwest Arkansas conversations, Siloam Springs businesses Cobb-Vantress, Houston Enzymes and DaySpring are each busy exporting their goods and services to the rest of the world.

The three business were featured at the recent Siloam Springs Chamber of Commerce Banquet, held Feb. 5 at the Simmons Great Hall on the John Brown University campus.

Dr. Alberto Torres-Rodriquez, export manager for Cobb Vantress, was born and raised in Mexico City but completed his doctorate at the University of Arkansas in 2006 and then joined Cobb Vantress.

Torres-Rodriguez said Cobb’s business spans the globe selling breeding stock to poultry companies on five continents.

“We use traditional genetic selection methods and provide the breeding stock to dozens of countries. At every dinner table with 10 people eating chicken, six of them would be eating chicken derived from Cobb-Vantress breeding stock,” he said.

While Cobb controls a majority share, the company continues to focus on expansions in Asia Pacific as well as increasing the number of production facilities in China and the Philippines. The Asia-Pacific team will see more technical support, performance data analysis and marketing intelligence to keep the business on track to attain more than half of the market in this region by the second half of 2015.

Cobb-Vantress is a subsidiary of Tyson Foods and operates its own facilities in the U.S. and the United Kingdom and uses distributor relationships to serve Mexico, Central America, South America, North and and South Africa, Europe. Middle East, India, Southeast Asia, China, Japan, Australia and New Zealand. The company also works with two producers in western Russia.

Last month the company unveiled a new website users can navigate from a world map and locate Cobb fully owned facilities, producers, and distributors. Cobb commissioned the redesign to deliver a better user experience not only to distributors, but to customers worldwide.

“We are excited to provide the practical features that will help our users learn about the vast distribution network of Cobb products throughout the world,” said Clark Baird, marketing manager for North America.

Cobb officials recently said their business is poised to grow across the world amid global population increases over the next 50 years. A Cobb distributor in Africa for more than 50 years recently spoke about the poultry market in that region, highlighting the increasing population in the continent expected to reach 2 billion people by 2050.

Doing business on the world stage has its challenges, according to the company. For instance in Brazil there are wage inflation pressures impacting personal buying power. Russia and China can impose protectionist laws which makes working within those nations a little more tricky.

Also on the world stage the company recently celebrated the 100 million chick hatching in its German facility. The company’s hatchery at Wiesenena, near Leipzig, was opened in 1998 and has been expanded to a capacity of 10 million chicks a year to supply the 21 countries where it is the parent stock distributor.

HOUSTON ENZYMES
Devin Houston, CEO of Houston Enzymes, said his research business of purifying enzymes came about because he believed in the work. Houston also told banquet attendees he would rather be the jerk than have to work for one, which also weighed in his decision to launch the company in 2000.

He relocated to Siloam Springs to launch his own company because he said the central location and quick access to an airport allows him to be on the east or west coast in about three hours time.

Houston said his work with enzymes that break down food has resonated across the globe because of positive results seen in autistic children. 

“This work with families with autistic children has become our niche. These children often have a lot of food intolerance and digestive issues and the disorder itself is disconcerting enough. Families have found introducing digestive enzymes can help with the food intolerance,” Houston said.

The company’s largest customer is in the United Kingdom and Houston said there is new research in the fields of enzymes and probiotics, noting that the University of Arkansas for Medical Sciences is also involved in studying the benefits they provide in aiding digestion. 

“We also ship our enzyme supplements to Indonesia, Japan, Australia, the Netherlands, South Africa, Brazil, India, Phillipines and Canada. Our international business is growing each year. At this time between 25% and 30% of my sales are international,” Houston said.

His advice for those looking to open their businesses to international buyers is to know the markets, regulations and customs as well as possible before jumping onboard. He said working with a good local partner is crucial. 

“We rely on the chamber as a local resource to help us and we have found strong partnerships abroad as well,” Houston told the group.

DAYSPRING 
Mark McKane, senior vice president retail development at DaySpring in Siloam Springs, said he relocated to Northwest Arkansas just eight months ago to take this position. He relocated from the San Francisco Bay area. 

“We came to Siloam Springs and loved to see this community living their faith. 
Don’t ever take that for granted. I have lived and worked in the Bay Area where there at 7.5 million people and only 3% are evangelical Christians,” McKane told the attendees at the banquet.

He said DaySpring works with more than 30 distributors that sell their cards and inspirational products in 70 countries. DaySpring items can be found in Singapore, Nigeria, Canada and United Kingdom, all of which McKane said are “big customers.”

McKane said it’s hard to do business in parts of the world given the company’s “Christian message.”

“People in places like Kuwait buy from us, but they are doing so at their own peril,” he added.

McKane said the company’s international business is only possible because of the strong partnerships it has with its distributor network. 

“You can’t just take your practices abroad and expect them to translate. Having strong partners in-country who speak the language, know the culture and understand the customs and regulations are imperative.”

DaySpring was acquired by Hallmark in 1999 but maintains a small corporate office in Siloam Springs.

Josh Masters has been named a member of Beall Barclay & Company, and Travis Teague has been named a member of Beall Barclay Wealth Management.

Masters, a CPA, joined Beall Barclay in 1999, after graduating from Arkansas Tech University with a bachelor’s degree in accounting. In addition to public accounting, Masters performs audit, tax and consulting services with a focus on contractors, leasing companies, wholesalers, retailers & manufacturers. He also assists clients in the healthcare, nonprofit, real estate and low income housing industries.

Masters is a member of the American Institute of Certified Public Accountants, (AICPA) and the Western Arkansas Chapter of Arkansas Society of Certified Public Accounts (ASPCA). He is also a member of the Russellville Chamber of Commerce and is a delegate to the Leadership Russellville program. Masters serves on the Advisory Board for Arkansas Tech University College of Business and is the treasurer of the Dover Public Education Foundation.

Masters and his wife Kara live in Dover with their two children.

Teague, a certified financial planner, joined Beall Barclay Wealth Management in 2004. As a financial advisor, he is involved in the analysis and implementation of client portfolios and financial plan design, and also functions as the daily operations manager.

He has worked in the financial services industry for more than 16 years and is licensed with the Financial Industry Regulatory Authority (FINRA) and all applicable state agencies for conducting securities, insurance and investment services.

Teague graduated from the University of Central Arkansas in 1997 with bachelor’s degree in business finance and in 2004 completed his bachelor’s degree in accounting at the University of Arkansas at Fort Smith.

He holds designations and licenses as a Certified Financial Planner Practitioner (CFP®), Securities Licenses, Series 7, 24 and 66 as well as Life and Health Insurance licenses. He is a graduate of Leadership Fort Smith, Class of 2011 and is a member of the Financial Planning Association (FPA).

Teague lives in Van Buren with his wife Tara and their two children.

American consumers are compassionate folks when it comes to celebrating Valentine’s Day. The National Retail Federation expects average per person spending to top $142.31 this year, up 6.3% from expenditures in 2014.

It seems women are in for the biggest treat this Valentine’s Day. Men will spend nearly double what women plan to spend – $190.53 versus $96.58 on average, respectively. 

Prosper Insights and Analytics notes cumulative sales should reach $18.9 billion, a high mark since their survey began in 2007.

“It’s encouraging to see consumers show interest in spending on gifts and Valentine’s Day-related merchandise — a good sign for consumer sentiment as we head into 2015,” said NRF President and CEO Matthew Shay. “Hoping to draw in eager shoppers, retailers will offer unique promotions on gifts, meal options at restaurants and even experiences.”

The report shows that 55% of adults plan to celebrate Valentine’s Day this year, and that is evenly split among income and age demographics for those under 65 years old. 

One of the popular category gifts is candy as 53.2% of consumers plan to give sweet confections totaling $1.69 billion this year. Candy sales are projected to rise 4.5% from a year ago as consumers have more cash in their pockets from lower gasoline prices.

One in five, or 21.1% of consumers, plan to buy jewelry for a total of $4.8 billion, the highest amount seen since 2010. Last year jewelry sales totaled $3.9 billion. Also, 37.8% will buy flowers, spending a total of $2.1 billion, which is flat with a year ago. 

More than one-third (35.1%) will spend an average of $77 going out for the evening. That will add $3.6 billion dollars to the hospitality sector for movies, restaurants and other forms of entertainment.

“It’s great to see consumers coming out of their shell this year, looking to spend discretionary budgets on those they love once again, though I fully expect many to continue to look for ways to cut costs where they can,” said Prosper’s Principal Analyst Pam Goodfellow. “While many will splurge, some will still look for simple and affordable ways to show their appreciation for friends and family and celebrate in a way they are most comfortable with.”

Celebrants will also spend nearly $2 billion on clothing and $1.5 billion on gift cards.

Spouses looking to treat their significant others comprise the biggest part of the spending plans this year with 91% committing an average $87.94 on gifts and entertainment for their loved one. Lover spending is expected to rise 12.6% from last year’s levels.

Consumers will also commit an average of $26.26 on other family members and $6.30 on children’s classmates and teachers. Pet lovers (21%) will spend a mere $5.28 on average for their beloved animals which equates to $703 million.

According to the U.S. Census Bureau, history is unclear on who was the original Valentine, but the most popular theory is that he was a clergyman who was executed for secretly marrying couples in ancient Rome.

“In A.D. 496, Pope Gelasius I declared Feb. 14 as Valentine Day. Esther Howland, a native of Massachusetts, is given credit for selling the first mass-produced valentine cards in the 1840s,” notes a Valentine’s Day profile from the bureau.

The ever changing world of retail is creating more demand for complex logistics services. That’s a good thing for Fayetteville-based CaseStack, which is expanding operations locally and nationwide to meet the growing demand.

“More companies (not just smaller ones) need a tech-enabled solution. Retailer requirements are always increasing, and it increasingly makes sense for us to hire and train experts instead of every company trying to do it separately,” CaseStack CEO Dan Sanker told The City Wire on Monday (Feb 9).

He said the supply chain management industry is becoming very complex as retailers are operating in multiple channels from brick and mortar big box to e-tail only, and a blended mix of the two. 

“Companies can’t just wing it anymore if they want to grow sustainably. They also need the benefits of consolidation services to reduce costs to retailers. Consumers don’t want to pay for supply chain inefficiencies,” Sanker said.

Monday (Feb 9) and Tuesday (Feb. 10) CaseStack is holding a career fair at its offices in Fayetteville to fill about 95 positions this year across its network of offices.

“We are on a mission to give clients and partners a supply chain competitive advantage.  We only have about 220 people now, so each person is critically important. We have about 70 people in Fayetteville, about 100 around Santa Monica (Calif.), and some folks in Dallas, Chicago, and Scranton (Pa.). We just added five logistics operations professionals in our Atlanta location. We’ll be opening a Cincinnati office this year also,” Sanker said.

The company recently added five new freight brokers in Fayetteville, nearly doubling its local sales force in this separate division amid growing demand for less-than-truckload freight. The company is expanding its local office space at 3739 North Steele Blvd. in Fayetteville by nearly 50% to accommodate for the new employees who will join CaseStack this year.

Sanker said the company is following a strong growth trajectory of about 20% annually  for the past five years. He said the growth requires the company to add new talent and then work to retain it throughout the years.

“The career fair is one of the ways we’ll kick start this year’s development of talent.  We’re ready to speak with talented people who share CaseStack values – collaboration, hard work, intellectual curiosity, excellence and determination,” Sanker said.

He said many companies are recruiting for all positions from operations, customer service, information technology to accounting, but sales and customer management professionals are in the biggest demand.

“I am hopeful that many of our new talent recruits will be in Fayetteville, but we’ll see where the talent bubbles up. As you know, I’ve always believed in Northwest Arkansas, its culture and its future as a cluster for retail technology excellence. I’ve seen that becoming even more of a reality in the past years since I have been here,” Sanker said.

BROAD THINK TANK
In an effort to retain and grow local talent, CaseStack recently initiated a a corporate-wide, multi-functional “Knowledge Sharing Group” (KSG) to better include all CaseStack employees in building the company’s future. 

“The KSG idea bubbled up at a sales meeting from one of our directors of business development, Josh Carmack. It’s really coming together,” Sanker said.

KSG starts with volunteers from functional areas across the company who work together creating a team that discusses corporate objectives, goals, strategies and measures within the vision and core values framework. Sanker said the groups are a positive, constructive think tank of ideas that can help propel the company forward. 

“Equally as important is that each member leaves with a more broad and deep understanding of other functions. Our organization has developed a lot of knowledge. We want to prevent it from living in silos, so we can build more well-rounded teammates leading to better careers, better processes, and a better-performing company,” Sanker said.

GROWTH AND ACCOLADES 
Sanker admits he has no idea how many people will attend the career fair but he’s hoping to see local talent turn out because its needed.

“We are looking forward to a growth year. If we can do our small part to make supply chains better then we also grow and we help (consumer packaged goods) companies and retailers deliver on their promises to give shoppers better products at better value,” Sanker said.

He told The City Wire that CaseStack is backed by private equity, mostly out of California but he hasn’t needed to raise money in many years. Sanker said this year’s expansion is funded by the near 20% annual growth in business revenue since 2010.
 
CaseStack was recognized in 2013 and 2014 as one of the Best Places to work in Arkansas by Deloitte and Inc. Magazine. The company said it offers a competitive compensation package for professionals seeking work in the supply chain and logistics industry.

December’s jobless rate was unchanged in the Fort Smith metro area, but the region continued the trend of decline in the size of the workforce and the number of employed. The one bright spot was that the number of unemployed fell more than 46% compared to December 2013.

Fort Smith’s metro jobless rate was 5.5% in December, unchanged compared to November, but lower than the 7.7% in December 2013, according to figures from the U.S. Bureau of Labor Statistics. December’s data is subject to revision.

The size of the Fort Smith regional workforce during December was 125,500, down from 126,646 during November, but 3.47% below the 130,024 during December 2013. The labor force reached a revised high of 140,253 in June 2007, meaning the December workforce size is down 10.5% from the peak number.

The number of employed in the Fort Smith region totaled 118,635 in December, down from 119,723 in November, and below the 119,964 employed in December 2013. The number of employed in the metro area is down 10.8% compared to the high of 133,061 in June 2006 – or 14,426 fewer jobs than the peak metro employment.

All of the eight metro areas in or connected to Arkansas had jobless rate declines in December compared to December 2013. Five metro areas (Northwest Arkansas, Hot Springs, Jonesboro, Little Rock and Pine Bluff) had jobless rate increases compared to November, and two metro areas (Fort Smith and Memphis-West Memphis) were unchanged compared to November. For the second consecutive month, only the Texarkana metro area had a jobless rate decline compared to November and December 2013.

During December, the lowest metro jobless rate in the state was 4.1% in Northwest Arkansas and the highest rate was 7.6% in the Memphis-West Memphis area.

FORT SMITH METRO NUMBERS
Unemployed persons in the region totaled an estimated 6,865 during December, down from the 6,923 during November, and well below the 10,060 during December 2013.

Jobs in the Trade, Transportation and Utilities sector — the region’s largest job sector —  totaled 25,100 in December, up from 25,000 in November, and above the 24,800 during December 2013. Employment in the sector reached a high of 25,700 in December 2007.

The Fort Smith area manufacturing sector employed an estimated 17,900 in December, up from 17,800 in November, and below the 18,400 in December 2013. Sector employment is down almost 37% from a decade ago when December 2004 manufacturing employment in the metro area stood at 28,400. Annual average monthly employment in manufacturing has fallen from 28,900 in 2005, 19,200 in 2012, and to 18,300 in 2013.

Employment in the region’s tourism industry was 9,500 during December, down from 9,900 in November and above the 9,200 in December 2013. The sector reached an employment high of 9,900 in August, September and November.

In Education & Health Services, employment was 16,300 during December, down from 16,500 in November and below the 16,600 during December 2013. Annual average monthly employment in the sector has steadily grown since 2005 when it reached 14,000. In 2012 the average was 17,000, but fell slightly to 16,800 in 2013. Employment in the sector reached a record 17,300 in October 2012.

In the Government sector, employment was 19,600 during December, down from 19,700 in November and up compared to 19,400 in December 2013.

NATIONAL NUMBERS
Unemployment rates were lower in December than a year earlier in 341 of the 372 metropolitan areas, higher in 25 areas, and unchanged in six areas, noted the broad BLS report.

The U.S. unemployment rate in December was 5.6%, down from 5.8% in November and down from 6.7% from a year earlier. Arkansas’ jobless rate was 5.7% in December, down from 5.9% in November and down from 7.4% in December 2013.

Oklahoma’s jobless rate during December was 4.2%, down from 4.4% in November, and down compared to 5.4% in December 2013. The Missouri jobless rate during December was 5.4%, down from 5.6% in November and below the 6% in December 2013.

ARKANSAS METRO AREAS
Fayetteville-Springdale-Rogers
Dec. 2014: 4.1%
Nov. 2014: 3.9%
Dec. 2013: 5.1%

Fort Smith
Dec. 2014: 5.5%
Nov. 2014: 5.5%
Dec. 2013: 7.7%

Hot Springs
Dec. 2014: 6%
Nov. 2014: 5.8%
Dec. 2013: 7.5%

Jonesboro
Dec. 2014: 5.1%
Nov. 2014: 4.8%
Dec. 2013: 6.6%

Little Rock-North Little Rock-Conway
Dec. 2014: 5%
Nov. 2014: 4.8%
Dec. 2013: 6.3%

Memphis-West Memphis
Dec. 2014: 7.6%
Nov. 2014: 7.6%
Dec. 2013: 8.5%

Pine Bluff
Dec. 2014: 7.2%
Nov. 2014: 6.8%
Dec. 2013: 9.7%

Texarkana
Dec. 2014: 5%
Nov. 2014: 5.2%
Dec. 2013: 7%

FORT SMITH METRO AREA HISTORY
Past annual average unemployment rates
2013: 8%
2012: 7.7%
2011: 8.3%
2010: 8.2%
2009: 7.9%
2008: 4.8%
2007: 5.3%
2006: 4.9%
2005: 4.5%
2004: 5.2%
2003: 5.5%
2002: 5%
2001: 4.2%
2000: 3.7%

December numbers in Northwest Arkansas’ labor market were mixed. The jobless rate and the number of employed declined compared to November, but the numbers were across-the-board positive compared to December 2013.

The jobless rate in the metro area during December was 4.1%, up from 3.9% in November and below the 5.1% in December 2013. The area jobless rate has been at or below 6% for 18 consecutive months, and below 5% the previous five months.

Metro employment during December of 224,509 was below the 225,630 in November, but above the 222,156 in December 2013, according to figures released from the U.S. Bureau of Labor Statistics. The December numbers are subject to revision.

The size of the Northwest Arkansas regional workforce during December was estimated at 234,132, down from the 234,831 in November, but above the 233,996 during December 2013. The average annual monthly labor size was 234,412 in 2013, 232,208 during 2012, 228,918 during 2011 and 225,974 during 2010.

All of the eight metro areas in or connected to Arkansas had jobless rate declines in December compared to December 2013. Five metro areas (Northwest Arkansas, Hot Springs, Jonesboro, Little Rock and Pine Bluff) had jobless rate increases compared to November, and two metro areas (Fort Smith and Memphis-West Memphis) were unchanged compared to November. For the second consecutive month, only the Texarkana metro area had a jobless rate decline compared to November and December 2013.

During December, the lowest metro jobless rate in the state was 4.1% in Northwest Arkansas and the highest rate was 7.6% in the Memphis-West Memphis area.

NWAMETRO NUMBERS
Following are other key figures from the BLS metro report.

Unemployed persons in the region totaled 9,623 during December, up from the 9,201 during November and well below the 11,840 during December 2013.

Jobs in the Trade, Transportation and Utilities sector — the region’s largest job sector —  totaled 48,300 in December, above the 47,800 during November, and down from the 49,600 in December 2013. The sector reached record employment of 50,500 in December 2006.

The Northwest Arkansas manufacturing sector employed an estimated 26,200 in December, unchanged compared to November, but down from the 26,400 during December 2013. Sector employment is down more than 21% from more than a decade ago when December 2004 manufacturing employment in the metro area stood at 33,300.

Employment in the region’s tourism industry was 22,300 during December, down from a revised 22,500 in November but ahead of the 21,100 in December 2013. Sector employment reached a record of 22,800 in September. Employment in the regional sector is up 45.7% compared to the 15,300 employed in December 2004.

In Education & Health Services, employment was 25,400 during December, down from 25,500 in November and up from 24,800 during December 2013. The November employment set a new record for the sector.

In the Government sector, employment was 33,200 during December, down from 33,800 in November and up compared to 32,300 during December 2013.

NATIONAL NUMBERS
Unemployment rates were lower in December than a year earlier in 341 of the 372 metropolitan areas, higher in 25 areas, and unchanged in six areas, noted the broad BLS report.

The U.S. unemployment rate in December was 5.6%, down from 5.8% in November and down from 6.7% from a year earlier. Arkansas’ jobless rate was 5.7% in December, down from 5.9% in November and down from 7.4% in December 2013.

Oklahoma’s jobless rate during December was 4.2%, down from 4.4% in November, and down compared to 5.4% in December 2013. The Missouri jobless rate during December was 5.4%, down from 5.6% in November and below the 6% in December 2013.

ARKANSAS METRO AREAS
Fayetteville-Springdale-Rogers
Dec. 2014: 4.1%
Nov. 2014: 3.9%
Dec. 2013: 5.1%

Fort Smith
Dec. 2014: 5.5%
Nov. 2014: 5.5%
Dec. 2013: 7.7%

Hot Springs
Dec. 2014: 6%
Nov. 2014: 5.8%
Dec. 2013: 7.5%

Jonesboro
Dec. 2014: 5.1%
Nov. 2014: 4.8%
Dec. 2013: 6.6%

Little Rock-North Little Rock-Conway
Dec. 2014: 5%
Nov. 2014: 4.8%
Dec. 2013: 6.3%

Memphis-West Memphis
Dec. 2014: 7.6%
Nov. 2014: 7.6%
Dec. 2013: 8.5%

Pine Bluff
Dec. 2014: 7.2%
Nov. 2014: 6.8%
Dec. 2013: 9.7%

Texarkana
Dec. 2014: 5%
Nov. 2014: 5.2%
Dec. 2013: 7%

NORTHWEST ARKANSAS METRO AREA HISTORY
Past annual average unemployment rates
2013: 5.7%
2012: 5.6%
2011: 6.2%
2010: 6.4%
2009: 6.2%
2008: 4.1%
2007: 3.8%
2006: 3.6%
2005: 3.3%
2004: 3.8%
2003: 3.7%
2002: 3.3%
2001: 3%
2000: 2.9%

Arvest Bank promotes Roger Bryles to vice president, trust client advisor for Arvest Asset Management. Bryles has worked as a trust client advisor for Arvest Asset Management for more than five years. Before he joined Arvest, he was a vice president, chief financial officer and board treasurer of a private foundation, a registered investment advisor with a regional investment firm and a bank examiner with the U.S. Treasury.

“Roger has been an invaluable asset to Arvest Bank and our customers,” said Tabitha Lipscomb, executive vice president and trust manager for Arvest Bank in Fayetteville, Springdale and Benton County. “His background and education helps him to provide the best guidance for his customers and help them reach their financial goals.”

Bryles earned a bachelor’s degree in business administration from the University of Arkansas in 1986 and law degree at the University of Mississippi School of Law in 1991.

He is a licensed attorney and maintains a CPA license on an inactive basis. He is also a Paul Harris Fellow and member of the Fayetteville Downtown Rotary Club. He and his wife, Mary Jane Meadows Bryles, have two daughters, Sophie and Lily.

Just a day after a $692.175 million appropriation bill for the University of Arkansas system was filed in the Arkansas General Assembly, UA officials issued a report that the flagship university in Fayetteville had in 2014 a statewide economic impact of $1.2 billion.

The report said the impact had grown 66% from the $725 million in 2009.

Sen. Missy Irvin, R-Mountain View, introduced on Monday (Feb. 9) Senate Bill 269, the appropriations bill for the University of Arkansas system. The $692 million budget, which would cover expenses from June 30, 2015 until July 1, 2016, has $250 million set aside for operating expenses as well as $121 million for capital improvements. Nearly $800,000 is set aside for the University of Arkansas School of Law, with another $250,000 for the Research and Technology Park on campus.

Tuesday’s (Feb. 10) report on the university impact was conducted by UA researchers in the Center for Business and Economic Research at the Sam M. Walton College of Business. The center previously prepared an economic impact report for the university in 2009.

“Perhaps the most impressive finding is the return-on-investment that Arkansas taxpayers get from the state’s investment,” Kathy Deck, director of the Center for Business and Economic Research, and principal author of the study, said in a statement. “The state’s appropriation to the university in 2014 was $173.8 million. Arkansas is basically getting back almost $7 for every dollar the state legislature invests in the University of Arkansas.”

Deck said she and the research team carefully reviewed budgets and program funding formulas to determine how much money “really came to the campus.”

In terms of sustainable economic growth, the study finds that the university, one of the largest employers in Northwest Arkansas in 2014, had a total payroll of $317.9 million.

“The activities associated with the university’s annual operations more than add up to the total of $1.2 billion annually,” said Deck. “But the total impact is 2.7 times greater than the funds the university directly spends each year.”

The report said the university has short-range and long-range effects on state and local economies by developing human capital, fostering a knowledge economy and providing a sustainable economic base for growth in Northwest Arkansas and the state as a whole.

During 2014, spending by students contributed $307.4 million to the economy in Northwest Arkansas, and spending by campus visitors added another $35.8 million. The student spending was determined through a survey of a representative sample of the student body – 2,600 of the 26,200 enrolled in the fall. While student spending is allocated to a variety of categories, the largest monthly expenses of students were rent, restaurants and bars, and motor vehicle-related purchases.

The impact also included economic contributions by UA alumni living in Arkansas. According to the report, there are more than 68,622 UA alumni living in Arkansas, about 2% of the state’s population and up from 60,000 alumni in 2009. Deck’s report said the alumni contribute $54.9 million in sales and use taxes to state and county governments and an additional $114.8 million in state income taxes. The researchers calculated that university alumni living in the state earn $2.3 billion in wages each year, significantly contributing as workers, business leaders and consumers in their local economies.

The university’s economic impact in Northwest Arkansas is estimated at $932.3 million in 2014, and includes $907.2 million in recurring annual economic impact and $25 million in one-time construction impacts. The annual business operations of the university contribute $522.2 million to the Northwest Arkansas economy, while student spending contributes $307.4 million.

“The University of Arkansas has been a key driver of Northwest Arkansas’ economic success these past two decades,” Mike Malone, president and CEO of the Northwest Arkansas Council, said in the statement. “The U of A contributes to our economy in so many ways – as one of our largest employers, through direct investment and purchasing, by preparing our future workforce and conducting innovative, job-creating research – these are just a few examples.”

Visitors to Razorback athletic events, the UA admissions office and students contributed $35.8 million in spending in 2014 and the economic impact generated by university-affiliated volunteers is $3.8 million.

The operations of tenants in the Arkansas Research and Technology Park add nearly $38 million to the regional economy.

The report was first commissioned in 2009 by Chancellor G. David Gearhart, and then again in 2014. The center researchers spent four months (September 2014 to January 2015) preparing the report. Deck joined the Center for Business and Economic Research in 2001, and has managed 99 economic studies for clients that include various counties and municipalities across Arkansas, Arvest Bank Group, Chesapeake Energy, the Jones Center for Families, the Arkansas Economic Development Commission, and Bikes Blues and BBQ.

P.A.M. Transportation Services was on course for record earnings to end 2014, but a recent $5.6 million lawsuit and anticipated settlement over minimum wage violations reduced profits for the fourth quarter. However, adjusted gross net income still rose 128% for the full year.

The Tontitown-based carrier reported annual net income of $13.491 million for the 2014, a steady bump up from the $5.914 million reported a year ago. On a per-share basis annual earnings were $1.68 per share, compared to 68 cents for the full year in 2013. 

Excluding the impact from a lawsuit settlement, adjusted net income and adjusted diluted earnings per share for the year ended Dec. 31, were $15.958 million and $1.99, respectively.

"We are very proud of the fact that the results for 2014 would have been the best in the Company's 35 year history were it not for the negative impact of the reserve for the lawsuit settlement. The continued strong demand for our services and favorable fuel prices are certainly encouraging as we set our sights on the remainder of 2015 for which we intend to focus on growth and continuous profitability improvements," CEO Daniel Cushman noted in the release.

Total revenue for fiscal 2014 was $410.937 million, up 2% from $402.813 million posted in the prior year.

"We have had an extremely satisfying year. Beginning with second quarter, we had very consistent operating profits which averaged in the $8 million range for each quarter when excluding the fourth quarter lawsuit settlement reserve. Our model, which consists of our Automotive Division, Expedited Division, Dedicated Division, Mexico Division and random Van Division, has been very consistent,” Cushman said.

Total miles in the truckload division rose slightly year-over-year to 209.99 million. Revenue per loaded mile also rose slightly to $1.39, from $1.38 a year ago. P.A.M. increased its total loads by 8.2% to 282,446 during 2014. The weekly revenue generated by truck averaged $3,250, compared to $3,165 during 2013.

"All of our key performance indicators, from an operating standpoint, have improved quarter over quarter as well as year over year. Empty miles improved 1.3% and revenue per truck each week improved 7.4% in the fourth quarter. For the year, empty miles improved 7.2% and revenue per truck each week improved 2.7%. We continue to see an increase in our base rate per mile although the increase is skewed lower due to our largest customer switching to a different rate structure. Under this new rate structure, a portion of the base rate has been pushed into the fuel surcharge category which reduces the per mile base rate reported,” Cushman said.

FOURTH QUARTER
P.A.M. reported total fourth quarter revenue of $101.714 million, up 5.3% from the same period in 2013. Net income totaled $2.132 million, offset sharply by the $5.6 million expected settlement which was set aside in the quarter. 

Net earnings per share totaled 27 cents a share, up 8% from the 15 cents reported a year ago. 

"We have continued to diversify our customer base in each division. One thing that we were not able to do, that we have done in the past, is take advantage of seasonal opportunities in the fourth quarter. This type of opportunity is generally a result of utilizing a large random freight fleet, and according to our own goals, we have reduced our random fleet in exchange for more driver friendly freight and routes,” Cushman notes.

He said the company’s random fleet is now right-sized for their immediate needs. The major use of the random fleet is to support the backhaul needs of other divisions as well as servicing the customer base that only has one-way freight. 

“We have also started to focus more efforts into our brokerage division which has seen considerable growth in the most recent 60 days and is gaining great momentum,” he added.

DRIVER CAPACITY
Cushman said driver capacity remains tight, which is the greatest concern among truckers according to logistics analysts John Larkin, of Stifel Nicolaus. Larkin said the shortage of drivers continues to worsen amid retirements and a better economy that leads younger people to take other jobs.

"We have increased driver pay by varying amounts in certain divisions and continue to invest in and grow our student driver solution. While the driver market remains very challenging, we feel we offer driving professionals a great opportunity to make a good living, experience some of the most driver friendly routes available, and drive a newer model truck,” Cushman said.

Few Wall Street analysts follow the thinly traded stock but shares have been trending higher in recent days ahead of Tuesday’s (Feb. 10) earnings’ release. 

P.A.M. shares (NASDAQ: PTSI) rose 1.65% to $57.19 in light trading on Tuesday afternoon, following the earnings release. The share price has ranged from a high of $63.70 to a $17.83 low during the past 52 weeks. The share price has risen 8% in 2015.

Timing is everything when it comes to hitting the curve balls that are the constantly changing trajectories of the retail sector. History is also a great coach, which is something Wal-Mart’s top executive teams know too well if you look at the retailer’s smaller format push. Wal-Mart’s small format push of today was an idea honed under former CEO David Glass’ tenure in the early 1980s, according to company historians.

One of those historians is retired Walmart executive Andy Wilson.

“Think back to the discount stores in the late 1970s that averaged about 40,000 square feet. I know I managed one of the first smaller 29,000 square feet stores in 1979 when Wal-Mart began expanding east of the Mississippi River,” Wilson said. “At that time Wal-Mart was testing various-sized formats learning then how to create successful models for staffing and managing profitability of operations and volume levels.”

Wilson said in the early 1980s he was on the management team that traveled to large urban areas like Atlanta and Chicago and there were 30 small urban formats on the board that far back. He said they were aware of how well the dollar stores were doing in urban areas more than 30 years ago. 

He said the only constant at Wal-Mart is change and more times than not, the store format innovations of the last few years were discussed and planned decades earlier. The only exception being the e-commerce pickup capabilities because the internet had not yet been conceived.

“David Glass had a vision for a small store format,” Wilson said. “We had been trying the Hypermarts and they were not profitable, but we knew there could be money made in grocery back then. Trying to find the right balance between food, fresh, deli and general merchandise was somewhat of a struggle,” Wilson said.

He said Sam Walton and David Glass spent a lot of time talking with the management teams about various format sizes, and eventually settled on the supercenter as the higher generator of profit among the various models tried. Wilson said the lull in small formats development, mainly neighborhood markets, resulted when the top management began to focus on international growth in later 1990s.

“In the past few years Wal-Mart began to take notice of the rapid expansion of Dollar General and management sought to reinvent itself once again,” Wilson said.

Wilson and analysts agree the Neighborhood Market formats are easier to get into towns than traditional supercenters that saturated the landscape over the past 15 years.

“Think of it this way: Wal-Mart focused on supercenters at a time when it resonated with consumers. Had Wal-Mart not built out its supercenter network of stores then perhaps K-Mart or Target Stores would have done so instead,” said Tom Coughlin, former Wal-Mart executive and now a retail and supplier consultant. “Today it makes more sense to build out the smaller formats.”

NEW VISION
Wal-Mart announced it was doubling the number of its Neighborhood Market stores in 2013 with 73 new openings. In 2014 there were 107 more added only to double again in 2015  with 233 new small stores opened. The retailer recently just opened its 500th Neighborhood Market and there are dozens more in the construction phase. By 2017, the grocery format will have 681 stores drawing an estimated revenue of $14 billion, according to Kantar Retail. Just two years ago this market was an estimated $6 billion in annual sales for the retail giant.

Analysts with Kantar have said this push toward smaller grocery formats makes sense for Wal-Mart given that more consumers of all ages want faster ways to do their grocery shopping. 

Two and sometimes three typical Neighborhood Markets will into the space of one supercenter, but the sales comps on the smaller grocery formats are trending higher than the supercenter stores, according to commentary from Walmart U.S. CEO Greg Foran during the last earnings call.

Wal-Mart has said its small format comps rose 5.5% in the recent quarter ending Oct. 31. This compared to 0.5% comps for the retailer’s U.S. stores at a whole.

SUPPLIER OPPORTUNITY
Carol Spieckerman CEO of newmarketbuilders in Bentonville, suppliers will need to evolve with Wal-Mart to gain opportunity in the format shift.

“The best way for suppliers to take advantage of the small format push is to acknowledge and address the inherent uniqueness of the model. Just as Sam’s Club suppliers can’t get away with simply super-sizing items that they sell to Wal-Mart, successful small format suppliers will evaluate every aspect of their offerings including logistics, packaging, displays and through a small format lens. Wal-Mart is continually parsing the commonalities and differences among its formats and suppliers should solicit these insights from Wal-Mart and act upon them,” Spieckerman said.

Spieckerman said it makes “incredible sense” for suppliers to participate in small market opportunities because even though there is less shelf space and few items stocked in the smaller format, they are also “the gateway to Wal-Mart and other retailer’s endless digital aisles.” 

“Walmart is particularly intent upon synergizing online offerings with its growing small format scale and leveraging its physical locations to facilitate online orders. For suppliers, that means that the shelf space and inventory in a given store in no way limits their volume potential,” she said.

PICKUP, ONLINE, OTHER OPTIONS
Wal-Mart recently tweaked the design of its Neighborhood Markets to move the Pickup and Services stations to the front of the store to save time for those wanting to access those service options. Foran made that announcement last year shortly after he was named to lead the U.S. division.

Spieckerman said small format creates a balancing act for Wal-Mart to calibrate which items work best in a physical sales environment, from a size, price, margin, and frequency perspective, and which are well-suited to online, site-to-store, site-to-home, etc. 

“Suppliers that can bring insights in these areas will be ahead of those who are waiting for orders,” she said.

Wal-Mart continues to openly court suppliers to bring their innovations and learnings to the table so customers may get the products they dream of as soon as possible.

Spieckerman there is an open-air mentality at Wal-Mart today that welcomes suppliers trying direct-to-consumer business because any lessons learned in the process are worth gaining. That has not always been the case. Spieckerman said there was a time when retailers punished suppliers that “dared to compete” in a direct way.
 
“While doing so can still create tension in some relationships, retailers’ tolerance for brand marketers that pursuing multi-channel expansion has greatly increased. Retailers have shifted to more of an ‘it’s all good’ mindset because as consumer attention continues to fragment, isolating a brand in a single channel, or even in an exclusive relationship, can be a ticket to obscurity,” Spieckerman said. “Brand marketers that operate direct-to-consumer businesses are also armed with insights that benefit their wholesale relationships.”

STORE LOCALIZATION, CANNIBALIZATION
Coughlin agreed that suppliers have plenty of new opportunities with the burst of small format grocery stores because Wal-Mart is reaching much deeper into many more neighborhoods and creating more opportunities for store localization of content.

He said there is no time to lament less shelf space and fewer product offerings which are also a reality of the smaller store footprint.

Experts interviewed for this piece negate the notion of cannibalization from the extensive expansion in small formats over the past two years. They believe the new Walmart grocery model will draw some shoppers away from other retailers creating new grocery sales that a supercenter might not have ever seen. They also say the Neighborhood Market does not prevent the need to visit a supercenter for things like oil changes, tires, stock-up trips, party items or other general merchandise.