Cigarette Decline Continues

U.S. cigarette use continues its long-term decline, though it can hardly be described as low. The New York Post headline for an AP story is “Smoking in the US is at an all-time low,” though the current 14 percent rate is still a fourth of the rate seen at the all-time high a lifetime ago. There continue to be worries about e-cigarettes and vaping, though it seems those are fading fads now after word of health consequences got out.

Cigarette smoking is declining for two main reasons: a smaller advertising presence and the early death of regular smokers. Tobacco companies are acknowledging that their products are deadly for the first time this week after the companies lost a 2006 racketeering case. The court in that case found that the companies got together to spread false information the dangers of cigarettes. The new court-ordered corrective statements still understate the dangers of cigarette smoking, since they are based only on the information tobacco companies had in 2006. They do not mention, for example, the more recent research implicating exposure to cigarette smoke in cases of sudden death from heart attack.

Other cultural trends are working against cigarettes. Cigarettes are part of a cluster of products and activities that might be seen as the gritty side of 20th-century culture. This cluster also includes beer, soda, coffee, smoked meat, narcotics, boxing, football, golf, sports television, secret societies, men-only lounges, motorcycles, pickup trucks, detective novels, and more — nearly all now in long-term decline as popular culture moves in another direction.

Is IHOP Still in Business?

A consumer brand’s social media efforts are usually directed toward sharpening and humanizing the brand. It is instructive, then, to look at the recent “IHOb” campaign from IHOP, which took the exact opposite approach. It was designed from the beginning to confuse and sow doubt. For a day, the storied pancake restaurant chain was talking about nothing but its format change. The newly renamed IHOb had thrown away its name and its menus. The new smaller menu had little more than an array of international burgers.

There was no human touch in this announcement. It was all preprogrammed and done according to a formula, as if there was no one there at IHOP headquarters, like a radio format change done by machine while the entire on-air and office staff is escorted out. Even the IHOb Twitter replies intended to reassure worried customers that the chefs still knew how to make pancakes appeared to come from a bot.

Customers who saw the announcement were confused. As the change was repeated on Twitter and in the news, the stories ranged from “IHOP is shutting down” to “IHOP thinks it’s going to be the new McDonald’s.” Toward the end of the day IHOP officers tried to reclaim control of the narrative, but with limited success. The public statements that IHOP was not really changing its name came across as a panic move after the rebranding was seen as a failure, or even as an internal scuffle at IHOP headquarters with the outcome undecided. Now that the dust has settled and the story has faded, there probably isn’t anyone who can tell you what really happened at IHOP. No one knows.

This is bad for business. To take your family to IHOP now, you first have to persuade someone that the restaurant is still in business and still has a recognizable menu. If it turns out you’re wrong, you’ll have egg on your face while you walk everyone back to the car. It’s a risk — and is IHOP such a good restaurant that you’re willing to stick your neck out to take people there? In a town with more than one restaurant, the safer move is to go somewhere else.

The impression I am left with, after reading all the news I could find, is that IHOP is attempting a nostalgia angle leaning on the 1950s diner era, but without a budget for period furnishings. In other words, IHOP seems to be trying to take on the failed diner chain Denny’s. It doesn’t make any sense, but I can find no other story that explains the new menu items. I’ve seen photos so I believe the new menu items are real. It’s a move that might appeal to IHOP customers born before 1955, but those who are younger must be forgiven if they feel slighted. Why would a restaurant take such a large step backward in food quality and selection? Has IHOP lost its collective mind? As the McDonald’s and Chipotle stories attest, the American public has not been kind in recent years to restaurant chains that try to turn back the cultural trend toward better food quality. IHOP was selling a menu of near-average food quality, but that is obviously not the case with its new menu. The attempt to move downmarket, apparently without a price cut to support it, could not possibly end well.

Any way you try to parse the story, the result is FUD, the fear, uncertainty, and doubt that may make potential customers hesitate. To be sure, there will be some IHOP regulars who respond with curiosity — “Let’s go over there and see for ourselves.” The broader public, though, no longer knows what IHOP stands for. If IHOP fails to recover from its name change and rebranding, marketing textbooks will record that it destroyed its brand in one day.

Starbucks Revisits Its Stores

Starbucks is trying to get itself out of the predicament it created by ceding control of its cafés. These first two adjustments may be regarded as baby steps, but they show that the company recognizes the problem it faces, if not necessarily the magnitude of the problem. That is a change from the company’s initial reaction to the incident in Philadelphia when a store manager had two customers arrested for no reason. Starbucks’ focus a month ago was on damage control for that one incident. The deep corporate denial about the systemic operational issues was intact at that point, but has softened as executives have taken a closer look.

First company headquarters in Seattle issued a policy change. After a year of official and unofficial experiments with a more aggressive approach to customers, the company seemed to recognize that it might be scaring many its loyal customers away from its cafés. In a change of heart Starbucks said that it would not forcibly remove customers or guests except in unusual circumstances. The policy makes a sincere, if tentative, attempt at writing down what those circumstances might be. As an example, if a customer falls asleep in the café, employees will attempt to wake and speak to the customer. Calling the police will no longer be an option as an initial response.

The things that were not said were just as important in the announcement from Starbucks two weeks ago. After two decades of telling store managers that the company does not know how to run a café, so that the store managers will have to figure it out for themselves, the company is taking the first steps toward reining in the excesses of the store managers it turned loose on its stores. This move is long overdue. It is an incongruous position for the world’s largest café operator to take the position that it has little advice to offer on how to run a café. Starbucks as a company should be the expert in this, certainly more so than the store managers it hires. This policy change reflects that intention. Starbucks has high turnover in its store manager positions, on the order of 50 percent per year, and most new store managers have no previous café, restaurant, retail, or hospitality experience, so the lack of operational guidance creates unnecessary stress for managers and customers alike at nearly every Starbucks location. No one expects a rush of manager firings to follow, but the explicitly stated policy tells all levels of management that store managers can no longer do whatever they please as long as their stores are eventually profitable.

Then Starbucks held its much-publicized racial sensitivity training. It was not the full day of training that some of the company statements had implied, but a half day at most locations. In other respects, though, it was a bigger initiative than one might expect from any corporate training program. This was not canned training put together at headquarters but was guided by outside experts. The training curriculum and materials were not stuck in the formulaic thinking that rules any corporate headquarters. Workers told me of meaningful discussion questions and exercises that led them to see everyday situations from a broad range of points of view.

This was also a highly visible exercise, as stores had to close halfway through the day, something customers have never seen before except in emergency situations such as severe weather or utility failures. Customer reaction was more positive than negative, with a few customers making a point of visiting the stores the next morning to show their support.

It is not enough. In most matters, Starbucks is still telling its store managers to make it up as they go along. For example, stores still run out of essential supplies as early as two hours after opening. As an occasional Starbucks customer, I am reassured enough that I would enter a Starbucks location again if I had a reason to, but I still hope I don’t have to — at least not yet, not until Starbucks has time to take the next steps to get its stores under control.