In January, our colleagues Billy Busko and Betsy White explored in this forum the implications of non-fungible tokens (“NFTs”) and the metaverse for the consumer industry. These topics have recently grabbed the attention of the public and media – in January, Paris Hilton even flaunted her Bored Ape Yacht Club NFT collection on Jimmy Fallon’s Tonight Show. The recent pervasiveness of these topics signals broader curiosity and understanding of blockchain concepts. It will also likely lead to more widespread acceptance of blockchain technologies beyond those that are popular today. There remains much debate over whether NFTs and the metaverse are a passing craze. However, blockchain technology is undoubtedly here to stay. Welcome to Web3.
Web3 – while difficult to define – can be equated to the adoption of blockchain technology at scale. While not a fully formed concept or product, Web3 is a vision for the next wave of the internet where blockchain technology will be built into how we share information. One way to conceptualize this is to imagine that every piece of data will have a contract linked to it, which will determine who can access the data, for how long, and at what price.
The concept of blockchain is not new. Between 2012 and 2018, there was an influx of crypto trading platforms, which gave the masses easy access to blockchain technology. Bitcoin, once a simple digital currency experiment, is now used by millions of people for payments and has a $2 trillion market cap. The words NFT and metaverse have even creeped into our everyday vocabulary.
In a world of digital consumption that the pandemic has only accelerated, consumer brands are beginning to do things with the blockchain. While brands’ foray into blockchain has thus far been mostly limited to selling digital assets (like branded sneakers for your avatar), the shift to Web3 will see brands go much further into blockchain technology. In the past few weeks, we’ve begun to see examples of how this might play out.
Two weeks ago, Outdoor Voices founder Ty Haney launched a Web3 community platform, Try Your Best. The platform provides brands with a means to create a lite version of a Decentralized Autonomous Organization, or “DAO”, which will give brands a direct line to engage with customers. Over Try Your Best, consumers can share their personal data and preferences with brands in exchange for collectibles, brand tokens, and access to exclusive experiences. This example of Web3 represents a shift in online privacy, where consumers can be given a choice to select, for each piece of data that they create, whether they want to allow other parties to have that information. And they can get paid for it.
Last week, Adidas announced a partnership with blockchain-enabled traceability platform TrusTrace, hoping to improve supply chain transparency. Brands today face a myriad of supply chain woes, such as production and shipping delays and manufacturers’ compliance with ethical and environmental standards. In Web3, brands could rely on a blockchain-powered ledger of chain of custody at all stages of a product’s life cycle, eliminating provenance concerns and improving visibility into potential delays. Adidas’s TrusTrace is one example of how blockchain technology could improve the efficiency and transparency of supply chains.
Consumers have begun to push back on the notion that their data is a product that companies can monetize, and they are also demanding more transparency from the supply chain. We’ve been on the precipice of a significant shift for some time, and if the pace of innovation over the past few weeks is any indication, the future is now.
Headlines of the Week
Fashion resale consolidation continues as Vestiaire Collective buys Tradesy
Fashion resale platforms are fighting to snap up smaller rivals as demand for secondhand booms. In June 2021, Etsy acquired Depop. This week, Vestiaire Collective, a Paris-based luxury reseller, announced its acquisition of American resale company, Tradesy. Max Bittner, CEO of Vestiaire Collective, commented, “With this transaction, we confirm Vestiaire Collective’s ambition to be a truly global player, promoting circularity in Europe, the U.S. and Asia-Pacific”. The acquisition will make Vestiare Collective one of the widest-reaching resale companies, with a combined audience of 23 million members globally.
Starbucks CEO Kevin Johnson is retiring, Howard Schultz returns as interim chief
Starbucks CEO Kevin Johnson is retiring after five years on the job. Howard Schultz will return as interim CEO, once again taking the helm of the company he elevated into a global brand while the company searches for a long term successor. This will be his third tenure as the coffee giant’s chief executive. Shares of the company rose 6% in premarket trading on the news. The company announced the leadership transition ahead of its annual shareholder meeting on Wednesday. Johnson joined the board in 2009 while working as CEO of Juniper Networks, and became a member of the leadership team in 2015 as president and COO. In 2017, Johnson was named President and CEO, succeeding Schultz. In addition to steering the company through the pandemic, Johnson used his expertise as a former tech executive throughout his tenure to push Starbucks into the digital age, revamping its loyalty program and updating its store footprint to reflect the different ways consumers want to buy their coffee. He also accelerated the chain’s expansion in China, now its second-largest market. In his time as head of the company, shares of Starbucks rose more than 50%.
Apparel & Footwear
Shoe Carnival Is on a Roll: CEO Mark Worden on What’s Next
Shoe Carnival CEO Mark Worden is gearing up for another strong year in 2022 after the footwear retailer reported its best results ever in both the fourth quarter and fiscal 2021 on Wednesday. In the fourth quarter of 2021, Shoe Carnival saw net sales grow 23.4% to $313.4 million, setting a new quarterly record. Net income in the quarter also reached a record high at $20.6 million compared to $7.4 million in the same period last year. As for the full fiscal year of 2021, Shoe Carnival saw net sales grow 36.2% to $1.33 billion, the highest annual net sales in the company’s 43-year history, with full year net income coming in at a record $154.9 million, up from $16.0 million in fiscal 2020. Much of the company’s success in the fourth quarter was due to a strong holiday season and the on-boarding of Shoe Station, which Shoe Carnival purchased in December for $67 million. Looking at Shoe Station, Worden said its integration into the business is ahead of schedule.
ThirdLove’s founders on its re-entrance into physical retail
After the pandemic halted its brick-and-mortar plans, ThirdLove is once again plotting its expansion offline. Coming off a busy year launching into new categories like activewear and loungewear, introducing a new online fit quiz and debuting new branding, a key focus for the DTC intimates brand in 2022 is opening physical stores. ThirdLove opened its first store back in July of 2019 in New York City, and it was set to stay open through the end of that year. Given the initial success from that pop-up, the founders were planning to renew the lease for another six months, but as the coronavirus continued its spread throughout the world, they decided to close the store. Now, two years later, the brand is ready to re-enter physical retail, applying learnings from its New York store to the design, merchandising strategy and experience of its new locations.
Shoe Retailer Belle Is Said to Plan $1 Billion Hong Kong IPO
Belle Fashion Group is targeting to raise about $1 billion in its Hong Kong initial public offering, people familiar with the matter said, five years after private equity firms took China’s biggest women’s footwear retailer private. The company filed for the proposed share sale on Wednesday without details of the offering. Deliberations are ongoing and the fundraising size could still change depending on market conditions, said the people, who asked not to be identified as the information is private. At $1 billion, Belle Fashion’s IPO would be the largest by a consumer brand since detergent maker Blue Moon Group Holdings Ltd.’s $1.46 billion offering in December 2020. Belle Fashion is owned by buyout firms Hillhouse Capital and CDH Investments as well as the retailer’s management, according to its preliminary filing. The consortium bought out Belle International Holdings Ltd., formerly traded in Hong Kong, in a $6.8 billion deal and took it private in 2017. The owners spun off Belle’s sportswear unit for a separate listing two years later.
Dov Charney Files for Bankruptcy as Standard General Payment Looms
The battle for American Apparel was decided long ago — in 2017, when Gildan Activewear Inc. bought the brand out of bankruptcy — but the fighting never ended for some of the combatants. In the latest salvo, the brand’s founder Dov Charney filed for personal bankruptcy in Los Angeles on Thursday. And his former partner — hedge fund Standard General — followed him to the court as it continued to seek payment of some $30 million the courts have judged it’s owed. Charney went on to form Los Angeles Apparel, a company he works at, but does not own. Along the way he was trailed by Standard General, which argued it was owed money. The courts ultimately agreed. Now Charney is in bankruptcy court and Standard General, which has sought to wrap Los Angeles Apparel into the case, is seeking its money there.
Athletic & Sporting Goods
American Outdoor Brands to Acquire Grilla Grills
American Outdoor Brands—provider of products and accessories for rugged outdoor enthusiasts from a corporate family that includes Frankford Arsenal, Crimson Trace and Schrade, among others—has entered into an agreement to acquire Grilla Grills. Privately owned Grilla specializes in high-quality, barbecue grills, Wi-Fi-enabled wood pellet grills, smokers, accessories and modular outdoor kitchens. Purchase price is $27 million in cash, roughly $24 million after factoring the future tax benefit resulting from the asset purchase. The acquisition of Grilla will allow American Outdoor Brands to enter the estimated $7 billion, U.S. barbecue grill market with an authentic, direct-to-consumer brand.
Dick’s Sporting Goods expanding House of Sport store concept
Dick’s Sporting Goods is bringing its immersive store concept to Minnesota. The country’s largest sporting goods retailer will open a Dick’s House of Sport store in Minnetonka, Minn., in May. Dick’s unveiled the concept, last April, opening a 100,000-sq.-ft. store at Eastview Mall, in the Rochester suburb of Victor, N.Y. It was followed by a second location, in Knoxville, Tenn. House of Sport Minnetonka will feature the concept’s signature element: an outdoor turf field and running track that is attached to the store. House of Sport is one of two new concepts opened by Dick’s during the past year. In September, the company opened the outdoor- and conservation-focused Public Lands, in the Pittsburgh suburb of Cranberry Township.
Cosmetics & Pharmacy
Loblaw to Acquire Lifemark Health Group to Expand Shoppers Drug Mart’s Healthcare Services
Loblaw Companies Limited announced that its wholly owned subsidiary Shoppers Drug Mart (“Shoppers”) has agreed to acquire Lifemark Health Group (“Lifemark”), a portfolio company of Audax Private Equity, for aggregate cash consideration of $845 million. Lifemark is the leading provider of outpatient physiotherapy, massage therapy, occupational therapy, chiropractic, mental health, and other ancillary rehabilitation services through its more than 300 clinics across Canada. Loblaw’s purpose is to help Canadians live life well. The acquisition of Lifemark adds to its growing role as a healthcare service provider, with a network of health and wellness solutions, accessible in-person and digitally. Through the acquisition of Lifemark, Shoppers adds the leading provider in the $11-billion Canadian outpatient physiotherapy and rehabilitation market to its team of professionals working in pharmacies, medical clinics, and healthcare businesses, supported by the company’s digital PC Health offering.
Men’s grooming: Is the men’s personal care category expecting a bounce this year?
Brands and chain retailers are preparing for a surge in men’s shaving and grooming activities. Mass market retailers are expecting the men’s grooming market to pick up this year as more people return to the office and social activities increase. Consumers who acquired DIY grooming skills during quarantine should also lift the market. Rod Little, CEO of Edgewell Personal Care, parent company of Schick, said in a recent “Closing Bell” interview with CNBC that there will be a surge in shaving and other grooming activities.
Jessica Estrada, founder and CEO of Hue for Every Man, said retailers have already leveraged their newly upgraded selections in women’s brands for the great shopping return.
Discounters & Department Stores
Unfazed by comp declines, Dollar General eyes deeper expansion
Dollar General’s comparable sales fell 1.4% in the fourth quarter and 2.8% for fiscal 2021 as the discounter lapped a year of extreme growth amid the pandemic in 2020. New stores helped the retailer’s total sales grow, with net sales up 2.8% in Q4 and 1.4% for the full year. Over the year, Dollar General opened 1,050 new stores. As Dollar General eyes more sales and market share, the retailer reiterated plans to add another 1,110 new stores to its already massive portfolio of over 18,000 stores.
To further its turnaround, Macy’s unveils new Own Your Style brand platform
Macy’s this week announced a new brand platform, Own Your Style, described in a press release as “a key step within the company’s Polaris strategy,” its turnaround plan announced two years ago. The effort, which launches this month, includes “a refreshed brand identity” geared to fashion. Online, Own Your Style will offer “simplified global navigation, a refreshed, modern search bar and a personalized customer dashboard,” with a digital hub that will be “a curated destination for style inspiration.” In stores, digital screens will provide style guidance and product displays, and curated Own Your Style and Now Trending pavilions will rotate monthly. Associates can earn commissions as part of the Macy’s Style Crew, adhering to “a reimagined dress code that celebrates self-expression to inspire customers,” posting about fashion on their own social media feeds and advising store customers.
Walmart hiring 50K associates for its US operations in Q1
Coming off two years of robust expansion, Walmart is hiring 50,000 associates in the U.S. to staff its stores, Sam’s Club shops, supply chain facilities and campuses, according to a post from Walmart Chief People Officer Donna Morris. The retailer’s global technology team is also hiring, with plans to bring in 5,000 new associates worldwide and establish new company hubs in Toronto and Atlanta, Walmart Chief Technology Officer Suresh Kumar said in a separate post. For the tech team, Walmart is seeking cybersecurity professionals, architects, developers, software engineers, data scientists, data engineers, technical program managers and product managers. The team grew by 26% last year, Kumar said.
Emerging Consumer Companies
Sundays for Dogs, pet food brand, raises $10 million
Sundays for Dogs, a New York-based brand in the ready-to-eat human-grade dog food category, announced the closing of a $10 million Series A round. The investment was led by Imaginary Ventures. Sundays is the first human-grade, air-dried dog food – healthier than kibble, but easier than refrigerated foods since it does not require a freezer, prep, or clean-up. Sundays uses 100% all-natural and human-grade ingredients, which are gently-dried at a USDA-monitored kitchen to preserve nutrients and flavor.
Baby formula brand Bobbie raises $40 million
Infant formula company Bobbie raised $50 million to expand its European-style infant formula offerings in the U.S. market. After meeting FDA requirements, Bobbie officially launched its infant formula in January of 2021. Its USDA-approved organic powdered infant formula sells for roughly $1.80 per ounce direct to consumers. (By contrast, Sam’s Club Member’s Mark Infant Formula is around $0.50 per ounce.) The company has raised $72 million in total funding.
Food & Beverage
TA Associates Acquire majority stake in Stonewall Kitchen
Specialty food and home goods producer Stonewall Kitchen has once again traded owners, with private equity firm TA Associate announcing it has taken a majority stake in the company “alongside the company’s management team.” Concurrently, former investor Audax announced that it had exited the business. Terms of the deal between the Boston-based firms were not disclosed. In a release, TA associates noted that “day-to-day operations of the company will be unchanged,” with Stonewall remaining in its York, Maine headquarters and overseen by current CEO John Stiker. Founded in 1991 by Jonathan King and Jim Stott as a jam and jelly brand sold at local markets, Stonewall has since expanded to offer a wide range of products including sauces, condiments, crackers and baking mixes. The company’s Maine headquarters includes production facilities, a large company store and, until its closing at the end of 2021, a cooking school. Stonewall’s products are sold in roughly 8,500 wholesale accounts nationwide and internationally, at their eleven retail locations throughout New England, and direct-to-consumer via its catalogs and website.
Former Chobiani President joins Impossible Foods as CEO
Alt-protein player Impossible Foods announced today that former Chobani president and COO Peter McGuinness has joined the company as its new CEO, succeeding founder Pat Brown. McGuinness’ appointment comes just weeks after his departure from Chobani was announced to employees on March 3. The company has yet to publicly discuss his departure or a succession plan. He will assume the helm at Impossible on April 4 and oversee day-to-day business operations. Brown will continue to hold the title of director, also taking on the newly created position of chief visionary officer. In this role he will focus on research and technology innovations, longer term strategic efforts and public advocacy work. The move plays to Brown’s background as a scientist — he holds a M.D. and Ph.D. in biochemistry— and will allow him to focus on developing new products that Impossible believes will hold the key to the company’s long-term success.
Indoor Farming Company Local Bounti acquires Pete’s for $122 million
Indoor farming company Local Bounti is acquiring rival Hollandia Produce Group, which grows and sells leafy greens under the name of Pete’s, for $122.5 million. The transaction is expected to close early in the second quarter. California-based Pete’s has three indoor growing facilities: two in California and one under construction in Georgia. Its greens are distributed to about 10,000 retail locations, including Kroger, Target and Walmart stores. All of Pete’s 130 employees will join Local Bounti, and its management team will remain in place to lead what will become a subsidiary of the firm. The acquisition — Local Bounti’s first since going public through a special purpose acquisition company merger in November — helps the startup quickly expand its indoor farming knowledge and retail footprint.
Grocery & Restaurants
Wingstop CEO Charlie Morrison unexpectedly resigns
Wingstop announced the resignation of chairman and CEO Charlie Morrison, effective immediately. Morrison is leaving the company to become CEO of drive-thru salad concept, Salad & Go, where he currently serves on the board of directors. The Dallas-based company’s president and COO Michael Skipworth is succeeding Morrison as head of the company. Lynn Crump-Caine, the executive board’ lead independent director, was appointed to succeed Charlie as board chair. Morrison served as CEO of Wingstop for nearly a decade, and before that, was CEO of Pizza Inn. His successor, Michael Skipworth has been with the company since 2014, during which time he held multiple leadership positions, including vice president of finance, chief financial officer and most recently president and COO of Wingstop since last year. He helped to launch the brand’s IPO in 2015, and will now serve on the Wingstop board of directors.
Famous Dave’s parent company to acquire fine-dining brand Barrio Queen
Famous Dave’s parent company BBQ Holdings announced last week during its fourth quarter earnings call the intention to acquire Mexican fine-dining brand, Barrio Queen. The $28 million deal with the Arizona-based, 7-unit restaurant brand is expected to go through in April and will be BBQ Holdings’ largest acquisition to date (and its third in the past year). This acquisition follows previous deals in April 2021, when BBQ Holdings purchased Granite City Brewery and Real Urban BBQ, and Oct. 2021, with the acquisition of Tahoe Joe’s. “We are excited to welcome Barrio Queen into the BBQ Holdings family,” BBQ Holdings CEO Jeff Crivello said in a statement. “It’s a beloved brand with an entrepreneurial team that has done a great job. The food offerings and environment are unlike any of our other brands. It will be a truly unique addition to our portfolio. We look forward to continuing their path of success.” With seven restaurants across Arizona and an eighth on the way (opening date of Dec. 2022), Crivello sees room for growth, as Barrio Queen fills the fine-dining gap in BBQ Holdings’ portfolio.
Home & Road
Serena & Lily reportedly planning IPO this year
High-end furniture brand Serena & Lily is planning an initial public offering sometime this year, according to industry insiders. Bloomberg is reporting that the company could be valued at more than $1 billion in a U.S. IPO, according to a source Bloomberg said did not want to be named while discussing private information. Morgan Stanley, Goldman Sachs Group Inc., Bank of America Corp. and Jefferies Financial Group Inc. are working as active book runners on the proposed listing, according to Bloomberg, which added they did not respond to requests for comment. Founded in 2003 by textile designer Serena Dugan and former Microsoft Corp. executive Lily Kanter, Serena & Lily is currently led by CEO Lori Greeley. While IPO volume hit a record high in 2021, listings on U.S. exchanges this year are at the lowest level for a quarter since 2016, according to data compiled by Bloomberg. Shares of companies that have gone public in the past 12 months are down 38% on a weighted average basis, the data show.
Jewelry & Luxury
Signet Claims 9% Of U.S. Jewelry Market
Signet Jewelers now accounts for 9.3% of the U.S. jewelry market, up from the 6% it claimed in 2021, CEO Gina Drosos said on an earnings call Thursday, following the release of its fourth-quarter financial results. Drosos predicted the U.S. jewelry market will be “down low single digits to roughly flat” in 2022—a lesser decline than some other forecasts. But she also said Signet will continue to gain market share, and that its Valentine’s Day sales were “strong.” She noted the jewelry business faced certain “macro headwinds” in the months ahead, including a possible renewal of travel and continued concerns about inflation.
Clean Origin Owner Gets $20 Million Investment
Great Heights, the owner of lab-grown diamond e-tailer Clean Origin, has received $20 million in financing from Titan Industries, the Indian diamond giant that owns the Tanishq brand and e-tail site CaratLane. The investment means that Titan will hold approximately 13.09% of the economic interest and 17.54% of the voting control in Great Heights. In addition, Ajoy Chawla, Titan Jewelry’s CEO, will join Great Heights’ seven-person board of directors. Titan’s investment values the company at $132 million, on a pre-money valuation basis, and $152.8 million on a post-money valuation basis. Its annual sales for 2021 totaled $25 million, Titan said.
Watch information and e-tail site Hodinkee has named Jeffery Fowler, a former executive at Farfetch, its new CEO. He succeeds Toby Bateman, who was appointed CEO in December 2020 and will continue in an advisory role at the company. In a statement Bateman said, “Whilst I remain based in the United Kingdom, trans-Atlantic travel requirements grow as the business grows, therefore I am stepping down from my role to focus on my responsibilities as a father and to my family.” Fowler was most recently president, Americas, for Farfetch, as well as a member of that site’s executive team.
Brilliant Earth Hopes To Double Retail Showrooms
In its second quarter as a public company, Brilliant Earth saw sales soar—and it announced plans to double the number of its brick-and-mortar showrooms. Sales for the San Francisco–based company’s fourth quarter (ended Dec. 31), jumped by 37.6%, to $121.9 million. Sales for fiscal 2021 rose 51%, to $380.2 million. Net income totaled $11.4 million for the fourth quarter and $26.3 million for the fiscal year. It projected 2022 sales will fall in the $485 million–$500 million range, which would represent 28%–32% growth. On a conference call following the release of its financial results, CEO Beth Gerstein said sales have continued to grow in its current quarter, according to a Motley Fool transcript.
Office & Leisure
Spin Master Tackles IP Theft in China
The Toronto-based Spin Master Corp. has emerged victorious in a number of cases filed against Chinese companies that have engaged in “malicious infringement” of the company’s IP rights. This includes the mass production of counterfeit, bootleg, and knockoff toys based on PAW Patrol and Bakugan. “These wins strengthen our confidence in China’s IP protection environment and judicial regime,” says Chris Harrs, Spin Master’s general counsel and corporate secretary. “Spin Master will continue exploring routes, including legal action, to protect our IP rights as well as consumers’ interests.” These victories include the right to financial compensation to Spin Master for patent violations. The company says that counterfeiters’ factories and warehouses were raided by Chinese police forces. In addition to product seizures and the arrest of certain suspects, two individuals have already received prison sentences and monetary fines. Additional cases are currently pending.
Party City adopts new logistics practices to shorten lead times
Party City will be chartering vessels and leasing containers to shorten lead times as disruptions persist, CEO and Director Brad Weston said during a Q4 earnings call. Since the company’s distribution centers are predominantly on the East Coast, the retail chain is also using East Coast ports with lighter traffic, said Weston. It has been two years since COVID-19 was declared a pandemic, and supply chain challenges continue to disrupt business. Party City plans to charter vessels as it faces higher freight and raw material costs. Inventory was up and increased unit costs were “driven by higher input and freight expenses as well as increases in transit times,” CFO and Executive VP Todd Vogensen said in the earnings call. The adjusted gross margin rate for the company increased nearly 450 basis points, to 38.9%, which was offset by about 120 basis points of headwinds from freight and input cost inflation. The retail chain expects inflation and supply chain headwinds to persist in 2022.
Movie theater chain AMC just bought a stake in a tiny gold miner with a shaky financial history
Movie theater chain AMC Entertainment has agreed to purchase a major stake in a tiny gold and silver miner that has been on shaky financial ground, the companies announced Tuesday. It’s an unusual expansion for AMC, a one-time meme stock whose value has come back down to earth after surging last summer. AMC will spend $27.9 million in cash for the deal, receiving roughly 23.4 million shares in the company, Hycroft Mining Holding, and an equal amount of stock warrants. The deal would make AMC the owner of roughly 22% of Hycroft. AMC CEO Adam Aron was slated to appear Tuesday morning on CNBC, but he canceled his interview, saying he wasn’t comfortable making public comments on the move due to volatility in Hycroft’s stock. In a quarterly securities filing released in November, Hycroft included a “going concern” clause, saying it would likely need to raise additional cash to meet its financial obligations over the next year.
Technology & Internet
Amazon closes deal to buy MGM movie studio
Amazon on Thursday said it had closed its $8.5 billion deal to buy MGM, combining the fabled movie maker behind “Rocky” and “James Bond” with the online retailing giant as it looks to draw consumers through more streaming video. In a statement, Amazon said it would welcome all MGM employees to the company and work with the studio’s leadership, indicating there would not be layoffs. Its decision to close comes after a deadline passed for the U.S. Federal Trade Commission to challenge the deal. The Seattle-based retailer announced the transaction in May 2021, saying MGM offered a trove of content to draw consumers to its fast-shipping and streaming club Prime, which costs $14.99 per month in the United States. Nearly a year later, Amazon is clear of regulatory hurdles. The European Commission approved the deal Tuesday, with no conditions. Likewise, Amazon earlier informed the FTC that it had “substantially complied” with requests for information about the deal. MGM bolsters Amazon Prime Video’s offering with more than 4,000 film titles, as well as this year’s Oscar-nominated “Licorice Pizza” and a long list of television shows that may help Amazon compete with streaming rivals Netflix and Disney+.
Amazon Flex drivers hit by surging gas prices are demanding relief
On Wednesday morning, about 50 delivery and ride-share drivers parked outside an Amazon warehouse near Los Angeles. Signs taped to their car windows showed a jogging skeleton sporting an Amazon delivery uniform and carrying a package. “Running On Empty,” the signs read at the protest rally, which was organized by Mobile Workers Alliance, a group representing gig economy workers. “We Can’t Afford Gas. Tech Giants, Pay Up,” the signs said. The caravan of contractors gathered at the Amazon facility, known as FCA2, to urge the online retailer to follow the lead of Uber, Lyft, DoorDash and Walmart. In recent days, those companies have all added fuel surcharges or increased driver earnings to offset higher gasoline prices. Launched in 2015, Flex remains a side hustle for some workers and has become a primary source of income for others. Drivers use their own vehicles to deliver packages in over 50 cities. They earn between $18 and $25 an hour, depending on the type of shift, and are responsible for costs like gas, tolls and car maintenance.
Finance & Economy
Retail sales come up short in February as inflation slows consumer spending
Consumers continued to spend in February, though at a slower pace than expected, according to a Commerce Department. Advance retail sales grew 0.3% for the month, slightly below the 0.4% Dow Jones estimate. Stripping out autos, sales were up 0.2%, well below expectations for a 0.9% increase and indicative that after a rapid pace to start the year, consumers were slowing down. The spending numbers were well below the rise in prices, which increased 0.8% in February, according to Labor Department data released last week. Retail spending numbers are not adjusted for inflation. The biggest dent in February’s numbers came in online shopping, with nonstore sales down 3.7%. One bright spot in the numbers is that January spending was revised up to an increase of 4.9%, a blistering pace that was even stronger than the initial estimate of 3.8%.
Ukraine conflict threatens Americans’ confidence in economic recovery, adds to inflationary concerns
The ongoing conflict in Ukraine is causing Americans to readjust their financial habits and mute their optimism about their financial future, according to new research from Massachusetts Mutual Life Insurance Company. This, combined with inflationary pressure, has the potential to dent the resurgence of the U.S. economy. Almost half (45%) of Americans say they think the current geopolitical environment will impact their spending and lifestyle in the coming months, with finances already strained by inflation. While many anticipate a wider economic impact due to Russia’s invasion of Ukraine, only 14% have taken immediate action in changing their savings and investment strategy.