Influenced by Tokyo’s “cosplay” (as in “costume play”) cafes and Taiwan’s theme restaurants, a few southern California restaurants let you eat in the jungle, classroom, or prehistoric times.

At Class 302, the waitresses are dressed in school uniforms, the menu is written on a big blackboard at the front of the room, and diners sit at wooden desks.

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By the end of the year, J. Corey Oliver, CEO of Traveler Guitar, expects sales to total as much as $1.8 million, a 44% increase over last year’s $1.25 million. In 2004, sales were $450,000. When asked about what Traveler Guitar has been doing differently this year to improve sales, Oliver said that improving customer service has made a difference.

For Oliver, responding to customer concerns and making sure his customers are happy and satisfied, is a main priority.

Customer Service as a Competitive Advantage

Shawn Gray, a Santa Monica musician, was surprised last month when Traveler Guitar offered to fix loose wiring for free, three years after he had bought the instrument. Not only did the manufacturer fix loose wiring, but the nicks were repainted, fresh strings were put on, and the instrument came back with a new case. Shawn thought the manufacturer had sent him a new guitar.

There are other companies that sell traveler guitars but none can compare to the customer service that Traveler Guitar offers. “Your customer service better be rocking,” Oliver said, “and your product better be stellar and your relationships better be fantastic.”

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Wal-mart will open Marketside grocery stores around “premium” offerings such as “meal solutions”. Market side grocery stores will be smaller in size and will focus less on price as opposed to rival Tesco-owned Fresh & Easy chain.

Retail giant Wal-mart has built its business around the low-price strategy. This strategy has been especially successful now during the economic downturn. During this past May, same-store sales excluding fuel rose 3.9 percent compared with the year-ago period. Not bad considering other retailers are closing doors and struggling with sales.

Given the current economic situation, is now the time to open “premium” stores?

In the late ‘70s and early ‘80s, Pathmark’s strategy was to sell lots of stuff at low prices. With food inflation, rising gas prices, and less to spend on groceries, Pathmark is returning to its low-cost, high volume roots. Last week, at the Irvington, NJ Pathmark, shoppers were loading up on the most heavily promoted items such as the 88 cent six packs of Canada Dry. Up to 20 Pathmarks will be converted to the new format this year. Although profit margins will be lower because items will be deeply discounted, Pathmark says they will make more money because volume will be up to 300% higher.

Will other supermarkets start to adopt this model?

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The intense heat across much of the U.S. sparked an increase in demand for items such as air conditioners, fans, cold drinks, and summer apparel. During the first week of June, sales for air conditioners increased 20%, bottled sales went up 4%, and 6% for swimwear over the same week in 2007.

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The minimum wage will rise 70 cents to $6.55 per hour from $5.85 per hour beginning July 24. Restaurants now face higher labor expenses in addition to commodity costs skyrocketing. Many chains have offset higher costs by boosting menu prices.

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Retail sales rose by 1%, the fastest increase in six months with the aid of nearly $50 billion in federal money.

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Year after year, Starbucks has seen growth in traffic to their stores. For the first time in Starbucks history, this year, they have seen an overall decline in traffic. The decrease in visits is being linked to consumers not having as much disposable income as they did years past. In order to save money to pay for higher gas and food prices, customers are cutting out the latte.

Howard Schultz, CEO of Starbucks, says that his company will have to innovate and provide more value to the customer. He feels that customers do not come to Starbucks just for coffee, but for the sense of community, and the sense of humanity in their stores. He describes Starbucks as the third place between home and work.

Although 50 million customers a week are coming through Starbucks stores, this represents only 8% of the total U.S. coffee market in terms of cups that are consumed. Starbucks still has room for growth and one key competitive advantage they do have is the unique customer experience and sense of community inside Starbucks.

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Starbucks formed a strategic licensing partnership with SSP, a beverage and food concessions leader for travelers in Europe, to open more than 150 Starbucks stores over the next three years in key European markets.

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Kmart has joined forces with VenJuvo, a company specializing in consumer trade-in services, to offer the Trade4Credit(TM) program to Kmart.com customers. The Trade4Credit program provides an easy and reliable way for customers to receive a Kmart gift card in exchange for pre-owned electronics including MP3 Players, digital cameras, and gaming systems.

The Trade4Credit program is a great way for retailers such as Kmart to build customer loyalty. More retailers should be exploring this opportunity.

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