It could be that American consumers are not into retailers that much right now. It’s not that they are ready to ghost merchants, but they don’t feel the need to respond to every text or email offering deals on a wide range of merchandise.
Retail sales in March were one percent lower than in February but still 2.9 percent higher than at the same time in 2022, according to U.S. Census Bureau statistics. February’s sales were down 0.2 percent compared to January, but were up 5.9 percent from last year.
The National Retail Federation (NRF), which does not include auto dealers, gas stations and restaurants in its calculations, had March down half a point from February with a year-over-year gain of 4.6 percent. February was up 0.5 percent compared to January with a 6.7 percent improvement compared to last year. NRF has retail sales up six percent year-over-year for the first three months of 2023.
NRF has maintained its forecast for retail spending to grow between four and six percent in 2023. The trade group points to growth in five of the nine retail verticals it tracks in March including online/non-store, health and personal care, grocery, sporting goods and general merchandise. Discretionary purchase categories did not fare as well with furniture/home furnishings, building materials/gardening supplies, electronics/appliances and clothing/accessories reporting year-over-year declines in March.
Positive signs in the market include continuing high employment rates even with recent high-profile layoff announcements in retail (David’s Bridal, Best Buy, Walmart, et al.) joining those in the financial services and technology sectors. Inflation continues to soften with the most recent Consumer Price Index and Producer Price Index reports supporting that trend. Travel continues to be a bright spot in the economy, up nine percent over 2022, according to the U.S. Travel Association.
Discussion Questions: Do you see a glass-half-full or half-empty scenario for retail over the final three quarters of 2023? Is the retail industry stronger or weaker today than before the pandemic?
Comments from the RetailWire BrainTrust:
I remain mildly optimistic. But there’s no doubt that consumers are fatigued by the persistent inflation and high interest rates. And while I am mildly optimistic, I expect it will remain bumpy through this year as consumers continue to remain cautious with their spending. The retail industry remains resilient as ever, but that doesn’t mean that there’s not plenty of peril for retailers.
Mark Ryski, Founder, CEO & Author, HeadCount Corporation
On a year-over-year basis, retail sales are still growing in value terms. However much this is because of inflation and underlying volumes are negative. The latest month also saw sales declines in a lot of discretionary categories. Outside of core retail, foodservice sales grew by a robust 13.9 percent. While there has been some moderation since last month, the message is that consumers are still prioritizing experiences over buying things which adds another layer of pressure weighing down on core retail.
Neil Saunders, Managing Director, GlobalData
Consumers are being more surgical in how they spend in 2023. The higher costs in shelter, food and gas have definitely put a damper on other categories like fashion goods. Spending is impacted by higher prices, a move towards slow-fashion and re-commerce, and consumers valuing experience over tangible products. Spending in 2023 will be a paradigm shift to the new normal. No doubt the industry is far stronger than pre-pandemic!
Shelley E. Kohan, Associate Professor, Fashion Institute of Technology
Headlines of the Week
Bed Bath & Beyond on Sunday filed for Chapter 11 bankruptcy protection after it failed in several last-ditch efforts to raise enough money to keep the company alive. The beleaguered home goods retailer has been warning of a potential bankruptcy since early January, when it issued a “going concern” notice that it may not have the cash to cover expenses after a dismal holiday season. Shares of the company closed at 29 cents Friday, giving it a market value of $136.9 million. The stock is down about 88% this year. Last April, it was trading around $20 a share. The company’s 360 namesake stores and 120 Buybuy Baby locations will remain open for the time being as it begins to close the business and liquidate assets. But it has filed motions in New Jersey bankruptcy court asking permission to auction the two brands, the company said in a release. It has already committed to closing all of its Harmon FaceValue stores. As of late November, Bed Bath had about $4.4 billion in assets and $5.2 billion in debts, court filings show.
Ikea will invest more than $2.2 billion over the next three years on its omnichannel growth strategy in the U.S., marking the Swedish home and furniture company’s biggest investment push since it opened in the U.S. nearly 40 years ago. Omnichannel retail experiences, where online and in-store shopping experiences complement each other, have become increasingly popular in light of a pandemic-spurred online shopping boom. Its roots predate the pandemic: In the U.S., the trend was buoyed by Amazon’s purchase of Whole Foods in 2017, which integrated a host of technological advancements into the in-person shopping experience. Soon, big-box retailers such as Walmart and Target followed suit.
Apparel & Footwear
David’s Bridal has a plan to liquidate if it can’t sell its operations, according to a filing with the U.S. Bankruptcy Court for the District of New Jersey from CEO James Marcum. The retailer said Monday that it’s in the midst of looking for a buyer during its Chapter 11 process. In his filing, Marcum said that if it doesn’t find a buyer the company “will turn to an orderly liquidation” of its assets, including those separate from its operations. Several parties “have expressed potential interest in certain” assets since February, when the company began reaching out to potential bidders, per Marcum’s filing. The retailer has already enlisted liquidation and restructuring firm Gordon Brothers Retail Partners to put procedures in place to wind down business operations and liquidate inventory in all stores, Marcum said. In the meantime, David’s Bridal is managing inventory in case it’s sold as a going concern. If so, the company “will quickly pivot to cease store closings at any stores needed to implement the transaction,” Marcum said. “The Debtors believe that this dual-path process will best maximize value for all stakeholders.”
FullBeauty Brands on Friday said it has agreed to purchase plus-size fashion brand Eloquii from Walmart for an undisclosed amount. Walmart also declined to disclose the selling price of the brand, which the retail giant bought in 2018 for a reported $100 million. Eloquii will be the anchor tenant in a new FullBeauty digital mall, joined initially by SwimSuitsForAll and June+Vie, according to a company press release. Eloquii co-founder and Brand Leader Julie Carnevale is staying on. This sale represents the latest brand to fall out of Walmart’s DTC portfolio, in a steady unwinding of what had been a years-long e-commerce acquisition spree that started with the blockbuster $3.3 billion purchase of would-be Amazon rival Jet.com. The company most recently sold menswear brand Bonobos to Express Inc. and outdoor brand Moosejaw to Dick’s Sporting Goods. Many of the purchase amounts were undisclosed then and are undisclosed now, so it’s unclear how often Walmart is getting its money back. The company wound down Jet without selling it at all, and last week Bonobos sold for $75 million, less than a quarter of what Walmart paid for it in 2017.
These days it’s difficult to find a retailer or brand that hasn’t at least experimented with resale. Rather than figure out how to do it themselves, most have turned to third-party platforms that specialize in secondhand e-commerce, leaving the success or failure of their attempt in other hands. As it turns out, selling used goods online is so inefficient that it’s difficult to do so profitably. Despite the robustness of resale’s growth, it’s a niche best left, for the most part, to brick-and-mortar stores, experts say. The resale platforms jockeying to work with brands are gaining steam as sales of preowned goods continue to grow. ThredUp, which runs a used-apparel site of its own, is rapidly building its resale-as-a-service platform, and Wells Fargo analysts see it as potentially more lucrative than its primary business. The company ended the year with more than 40 clients, which include H&M, J. Crew, Francesca’s, Kate Spade, American Eagle and Target. The roster at Trove, which runs a rival recommerce operating platform, includes Canada Goose, Carhartt, On, Lululemon, Patagonia, REI, Levi’s, Arc’teryx and Allbirds. Another resale vendor, Recurate, works with Michael Kors, 7 For All Mankind, Clare V., Juicy Couture, Apparis, Peak Design and Moosejaw, among others.
Athletic & Sporting Goods
Lululemon acquired Mirror for $500 million in 2020, at the height of the at-home fitness trend, but it has struggled to integrate it with its core business of selling athletic apparel and footwear, with one analyst writing that selling Mirror could eliminate a “distraction.” While Lululemon’s Mirror business has struggled, its overall business remains strong. Lululemon sales increased 30% to $8.1 billion last year. Some of Lululemon’s employees have been skeptical of the company’s plans for Mirror, including those who questioned how a $1,495 high-tech interactive screen could be marketed and sold alongside $118 leggings and $128 pants.
Premium golf equipment manufacturer Edel Golf has been acquired by former CoorsTek executive Doug Coors. Hailing from the Coors Brewing family, his background resides in engineering physics and manufacturing processes. What stands out about Coors is his passion for golf, knowledge of the biomechanics behind the golf swing, and keen sense of club fitting processes. Headquartered in Denver, Colorado, Edel Golf is a premium golf equipment manufacturer dedicated to providing pioneered concepts to help golfers score. Edel’s fitting processes in the putter category have long been the industry standard in providing nearly infinite possibilities to the golfer to ensure the most accurate fit possible.
Cosmetics & Pharmacy
Goodwill Brands and Branded IP have acquired Plant Apothecary from Rare Beauty Brands. As part of the transaction, Thirteen Lune co-founder Nyakio Grieco has invested in the natural skincare and body care brand. Terms of the deal weren’t disclosed. It represents the first of what could be several acquisitions by Goodwill Brands, a brand holding company and beauty concept accelerator formed by Tracy Holland, co-founder and former CEO of beauty brand incubator HatchBeauty Brands, now called Hatch Collective, in 2020. Founded 11 years ago in Brooklyn by Bjarke Ballisager and Holly McWhorter, a married couple with a background in journalism, architecture and music, Plant Apothecary set out to make clean beauty reasonably priced and aesthetically vibrant. Rare Beauty Brands acquired Plant Apothecary in 2019 from Ballisager and McWhorter. With the sale of Plant Apothecary, the brand holding company is concentrating on the remaining two brands in its portfolio: skincare mask line Patchology and nail product specialist Dr. Dana.
The approach comes two months after the latest profit warning by THG, which also launched a strategic review into loss-making parts of its OnDemand division, which includes websites such as Zavvi and Pop In A Box, as it seeks to focus further on beauty and nutrition. The Manchester-based business was founded by Matt Moulding and John Gallemore in 2004. It has grown through a raft of acquisitions of online retail brands in beauty and wellness, such as Myprotein, Dermstore, and Cult Beauty, but has seen its valuation tumble in the past two years as cost inflation has impacted profitability and the firm has faced scrutiny over its corporate governance. THG was valued over $12B in 2021 but has meaningfully declined in value since then.
TruArc Partners, a private equity firm focused on the middle-market, announced that it has invested in Trademark Cosmetics, Inc. (“TCI”) alongside Founder and President David Ryngler. Terms of the investment were not disclosed. TCI is a leading formulator and manufacturer of beauty and personal care products, partnering with a variety of established and emerging brands. Ryngler founded TCI in 1994 and has grown the company alongside General Manager Eko Handoko for more than 20 years. In 2011, TCI moved into a purpose-built 160,000 square foot facility in Riverside, CA. TruArc Partners will work with TCI to pursue continued growth, and support brand partner success, through investing in organic initiatives and targeting strategic M&A.
Omy’s SkinAI technology analyzes customers’ skin to make personalized dermo-cosmetic products that promote the health of any skin type. The $11 million investment round led by Crédit Mutuel Equity with participation from Fondaction, BDC Capital’s Thrive Venture Fund and Accelia Capital will allow the Quebec City-based company, which has 27 employees, to hire additional staff and acquire new production equipment to roll out its product line on North American markets.
OTO has acquired South West Brands’ (SWB) wellness portfolio for £7m and merged the two businesses to create global consumer packaged goods company OTO Group. The company will build on “the rapid success of both entities”, creating a portfolio of global, female-focused wellness brands that are focused on innovation. Luxury wellness brand OTO, which is known for its CBD products, acquired menstrual and perimenopausal wellness brand FEWE, skin care range Love MeMeMe and CBD-infused soft drink company Botanic Lab in the deal. The combined group has sold around 500,000 units to date since 2019. The business has a target of achieving around £15m to £25m full-year sales in 2024, as well as an EBITDA of around £3m to £4m.
Discounters & Department Stores
After a little over a year in the position, Chief Merchandising Officer of Walmart U.S Charles Redfield is exiting the company, according to information sent to Retail Dive. Redfield, who has been with the company for 32 years, is leaving in June to spend more time with his family, John Furner, president and CEO of Walmart U.S., wrote in a memo to U.S.-based associates regarding the departure. Redfield will begin an advisory role with Walmart starting May 1. The company did not answer questions from Retail Dive regarding his successor.
Dollar stores, the no-frills discount retailers known for catering to America’s most cash-strapped shoppers, are getting a makeover as inflation drives more demanding middle-income consumers through their doors. The industry’s biggest chains have both announced plans to remodel almost twice as many stores as they will open this year. Dollar General and Dollar Tree will increase the number of refitted stores by 11.4 per cent and 25.6 per cent from last year, respectively. Both are investing heavily in freezers and coolers to meet growing demand for groceries from inflation-hit customers who have shifted more spending from discretionary items to essential items like food. The cost of remodeling and opening new stores will be considerable, marking out the chains from other retailers which are cutting costs and closing outlets. UBS analysts last week predicted that 50,000 US stores, or 5 per cent of the current total, could close by the end of 2027.
Katie Mullen, previously J.C. Penney’s chief digital officer, is pivoting to become chief customer officer, the department store announced Thursday. She will lead “efforts to deliver an end-to-end integrated shopping experience,” and also “continue to oversee e-commerce strategy and omnichannel development,” according to a company press release. Mullen arrived at J.C. Penney in early 2022, months after leaving Neiman Marcus as its chief digital officer.
Emerging Consumer Companies
Kindred, the members-only home swapping network, announced a Series A funding round of $15 million. This round was led by New Enterprise Associates, with participation from existing investors Andreessen Horowitz, Caffeinated Capital, Bessemer Venture Partners, and Outset Capital. Kindred will utilize the funding to expand across core cities in North America in major markets including New York City, Los Angeles, Miami, San Francisco, Mexico City, and more, and launch in several major European cities later this year. Founded in 2021, Kindred is a members-only home swapping network that harnesses the power of trusted community to unlock a lifestyle rich with travel and human connection. By exchanging their homes and apartments with peers, both renters and owners alike can access the opportunity to travel freely between vetted, off-market homes.
LL Cool J’s Rock the Bells announced that Paramount Global, along with Raine Ventures and Irving Azoff of Iconic Artists Group, led a $15 million Series B funding round for the hip-hop platform, which has also signed a first-look deal with Paramount. Amex Ventures, Wildcat Capital Management and Capstar Ventures also participated, with additional investment from ASK Capital, North Island (Glenn Hutchins), AME Cloud Ventures and XO Capital. The fresh funds will help scale the three pillars of the business – content, commerce and experiences –including creating more long-form projects, launching retail partnerships and experiential events, and expanding in Europe. It will also grow its annual Rock the Bells Festival.
Dune Suncare begins one year exclusive retail partnership with Ulta, enters 550 doors
Dune Suncare is entering 550 Ulta Beauty doors with a one-year exclusive retail partnership. The 10-month-old sunscreen brand will be one of four brands featured in Ulta Beauty’s Sparked program, displayed on entry tables and end caps depending on the store. It will also be a member of the Conscious Beauty program. All stock keeping units, as well as new launches, will be available at the retailer. Since Dune’s launch in June, it has been focused on retail expansion, as brick and-mortar is where consumers typically purchase sunscreen.
Live event ticket platform TicketRev announced a pre-seed funding round of $1.1 million and the launch of its new mobile app. Investors include 500 Startups, Soma Capital, Groove Capital, Techstars, the Minnesota Twins, and various angel investors. TicketRev acts as a liaison between buyers and sellers, offering a reduced seller fee of only 8.5%. Buyers never pay a fee when using TicketRev. Sellers are paid instantly and never have to list their inventory for sale. Since being founded in 2022, TicketRev has grown to serve upwards of 5,000 active users. The buyer-driven model allows fans to name their own price for tickets, enabling sellers to accept these requests and sell their tickets discreetly.
Food & Beverage
Hershey is buying two popcorn operations from a co-manufacturer as the snacks maker aims to increase production capacity and flexibility for its fast-growing SkinnyPop brand. The confectionery and salty snacks giant is purchasing the plants, which are located in Indiana and Pennsylvania, from bulk popcorn giant Weaver Popcorn. The purchase price and when the deal, which needs to get customary regulatory approval, will be completed were not disclosed. The deal is the latest in a series of manufacturing and brand acquisitions by Hershey, best known for Kisses, Reese’s and other confections, since 2017 that has rapidly given the company a commanding presence in the ultra-competitive $36 billion salty snacks category.
Six major U.S. beverage equipment makers are merging to form Lotus Beverage Alliance, designed as an end-to-end services provider for craft drinks. The new company, created via a merger led by Ronin Equity Partners, is formed from the combination of Alpha Brewing Operations, GW Kent, Twin Monkeys, Stout Tanks and Kettles, Brewmation and Automated Extractions; all founders from the original six brands are staying on in leadership positions and no layoffs were made as part of the process, according to Lotus. The $100 million deal is meant to establish Lotus as a comprehensive beverage solutions company, with capability to support production for cold brew coffee, RTD cocktails, cannabinoid-infused drinks and sake beverages, in addition to craft beer, wine, cider and spirits. The entity will supply 1,500 products and services including canning systems, automation and control systems, turn-key brewhouse construction, packaging, thermal processes, tanks and sanitation equipment.
Insect farming startup Ynsect SAS has secured more funding as it expands globally and looks to prioritize higher-value food for pets and humans. The French company closed a $175 million financing round, bringing the total amount raised so far to about $625 million. It’s shifting away from animal feed — such as mealworms fed to fish — to high-margin pet food and food ingredients to boost profit amid soaring energy, raw materials and debt costs. Insects have emerged as a sustainable protein, helped by regulatory approvals in Europe, but bugs still remains a niche market and pricier food in the West. Securing financing has also been difficult for startups and new technologies amid increased investor scrutiny and more limited funding. Ynsect, which operates farms in France, the Netherlands and the US, is also expanding in Mexico, while eyeing a possible entry into Asia.
Grocery & Restaurants
Investment firm Mohari Hospitality has announced plans to acquire Tao Group Hospitality from Madison Garden Entertainment Corp. The transaction values Tao Group Hospitality at $550 million and it is expected to close in May. With the purchase of MSG Entertainment’s majority interest, as well as the stakes of additional third-party investors, Mohari will own Tao Group together with management, including co-CEOs Noah Tepperberg and Jason Strauss. Also as a part of the transaction, Tao Group will enter into a multi-year agreement with MSG Entertainment for ongoing consulting, marketing, and support services at Madison Square Garden and Sphere in Las Vegas. Tao Group’s portfolio includes over 80 branded locations in 20 markets. Brands include TAO, Hakkasan, OMNIA, Marquee, LAVO, Wet Republic, Ling Ling, Little Sister, Sake No Hana, Beauty & Essex and more.
From a work force perspective, Whole Foods will be a little more hallow in the coming weeks. However, as an organization the grocer believes leaner is better. Whole Foods is expected to lay off hundreds of workers while it restructures the organization, according to a memo reported first by the Wall Street Journal. Whole Foods will be decreasing its operating regions from nine to six and centralizing some units within its operations division. Category-specific store operations support will switch from a regional structure to a team within global operations. Supply chain management will now be within Whole Foods’ global supply chain division. Global support teams will receive further adjustments and the company’s team member services will be enhanced. Growth also will be a core function in the coming years. About 50 stores are currently in development and another 100 are expected to be in the pipeline. The plan is to open 30 or more stores annually.
Home & Road
Italian Design Brands, one of the nation’s largest high-end furniture and design holdings, confirmed on Monday its intention to list its shares on Euronext Milan, a regulated market organized and managed by Borsa Italiana. Established in 2015 by Private Equity Partners and a select group of investors through a company called Investindesign, the Milan-based company said the offering would consist of newly issued ordinary shares for an overall value of 70 million euros and existing ordinary shares offered by the company’s shareholders, in order to reach free float of at least 25 percent of the share capital resulting from the completion of the listing. The offering will also include a greenshoe option. “The proceeds from the capital Increase will be used by the company to support the implementation of its strategic objectives, allocating them to the implementation of the organic growth strategy, according to the objectives described in the business plan, the financing of the M&A activity, and sustain the capital expenditures and the working capital,” the company said in a statement. IDB has already filed its prospectus statement to Italy’s market watchdog Consob. Upon approval, the offering is expected to start in May 2023.
Surya has signed an agreement to purchase Global Views for an undisclosed sum, Surya announced. The deal will enable Surya to better penetrate the higher-end interior design segment while boosting its existing assortment with a wider range of accent pieces and accessories. Under the terms of the purchase, Global Views will continue to operate as an independent brand with creative direction from CEO David Gebhart. The deal is expected to be completed in the coming months. “This marks the start of a transformative new chapter for our company. With the addition of Global Views to the Surya family, we will be able to reach more designers and better serve their needs,” said Surya CEO Satya Tiwari. “We look forward to being the custodians of the iconic Global Views brand and we are confident that, under our leadership and David’s creative vision, it will continue to prosper for generations to come.” Although Surya has a strong foothold in the rug business, it has been steadily adding product categories, like lighting, accent furniture and decorative accessories, to its assortment.
Jewelry & Luxury
A new Plumb Club survey found that while nearly two-thirds of jewelry consumers purchased online in the past year, most still preferred to shop in a traditional store. In the poll of 2,000 people who purchased jewelry in the past year, 62% said they bought at least one piece via the web, while 28% shopped only at brick-and-mortar stores. Another 10% bought in-store but said online browsing led them to that location. “The No. 1 preferred place to purchase remains the store,” says Plumb Club marketing director Michael O’Connor. “But what our research tells us is an increasing number of consumers are willing to purchase online. People are becoming more and more accustomed to shopping online. Once you find out how easy it is to buy online, you do it more often.”
The owner of Kay Jewelers and Zales is targeting as much as $10 billion in annual sales within the next five years, projecting a rate of growth that’s faster than Wall Street’s expectations. It’s a bet by Signet Jewelers Ltd. that US wedding engagements will rebound and that demand for pricier jewelry will remain robust as higher-end shoppers outspend mass-market consumers hit by high inflation. The company is targeting between $9 billion to $10 billion in annual revenue within three to five years, according to a presentation to investors on Tuesday. The higher end of that range is an increase from the $9 billion that Signet set two years ago as a target to meet in about five years. And it’s a notable jump from the $7.8 billion Signet reported for its most recent fiscal year that ended in January.
In the first quarter of the year, Italian luxury group Brunello Cucinelli, most renowned for its cashmere apparel, witnessed sales growth of 33% at constant exchange rates. The increase was mainly attributed to performance in the Americas and a resurgence in Asia, reflecting the emergence of the “quiet luxury” trend. The company observed that the rise in demand in North America seemed to be “structurally increasing,” and the “decidedly favorable trend” in China reinforced the group’s prospects in this critical market. The firm recorded sales of $290.6 million in the quarter ending in March and reaffirmed its anticipation of a sales boost of about 15% for the year. Quiet luxury has emerged because of several factors, such as a backlash against the flashy and noisy aesthetics of pop culture, as well as the prevailing economic conditions that have left many consumers grappling with financial uncertainty. Consequently, they are increasingly seeking to make smarter investments in the form of high-quality, timeless pieces that will endure and ultimately prove more cost-effective.
Office & Leisure
Entertainment One founder Darren Throop is in talks with Hasbro to acquire the film and TV production and distribution unit he sold to the toy giant in 2019, The Hollywood Reporter has confirmed. J.P. Morgan and Centerview Partners has led a formal auction for eOne, which has a film and TV library with around 6,500 titles and a branded film and scripted TV business that produces and finances content like Dungeons & Dragons: Honor Among Thieves, The Woman King, Yellowjackets and The Rookie franchise. It has emerged Throop has been talking to CVC Capital Partners, a Luxembourg-based private equity firm with other media interests, about bringing financing to the table to reacquire certain assets of eOne. In mid-November 2022, Hasbro first announced it was exploring a possible sale of eOne. Any possible sale of eOne is likely to see Hasbro retain Peppa Pig and other key properties acquired when the toy maker acquired the Toronto-based indie studio four years ago as part of a $4 billion all-cash transaction. Hasbro shedding parts of eOne, should a deal be completed, aims to allow the company to focus on branded assets like Peppa Pig, Transformers and Dungeons & Dragons as it looks to be become a digital games giant under new CEO Chris Cocks.
Japanese gaming giant Sega announced Monday it has made a 706 million euro ($776 million) offer for the maker of the Angry Birds puzzle game, Finland’s Rovio Entertainment Oyj. The deal would be for the entirety of Rovio’s outstanding shares and options, valuing the stocks at 9.25 euros per share, a roughly 19% premium to their closing price before the announcement, Sega said. It’s valuing the options at 1.48 euros. Rovio’s board is in support of the offer, the company added. Tokyo-based Sega was founded in 1960 and is best-known for its Sonic the Hedgehog and Total War franchises, as well consoles including the Sega Genesis/Mega Drive, popular outside of Japan in the 1990s. It wants to use Rovio to expand its presence in the mobile gaming market and said it would use its live-operated mobile game development capabilities to boost development of mobile-based versions of its existing games.
Barnes & Noble is growing its store base. Barnes & Noble is responding to what it calls a resurgence in sales with new store construction and a redesigned loyalty offering. The bookseller, which opened more than 17 new stores during 2022 after only opening one or two new stores per year since 2009, plans to open more than 30 new stores during 2023. The openings include four new stores which have already opened since the start of the year. According to the privately-held, New York City-based Barnes & Noble, it has been experiencing increasing sales, supported by “significant expansion of the market for physical books driven by word-of-mouth and social media recommendations.” Barnes & Noble first launched its membership program in 2001. At its peak, over 12 million customers were enrolled. Now 22 years later, over which time it remained completely unchanged, Barnes & Noble is revamping the program with paid and free levels. The new Premium Membership tier maintains a 10% discount in Barnes & Noble stores, and adds a 10% discount to online purchases and a new “spend-and-save” reward on all shopping. Barnes & Noble is also offering a new, free-to-enroll B&N Rewards program. B&N Rewards gives customers a spend-and-save reward on all shopping.
Technology & Internet
In June 2021, Google won approval to build an 80-acre campus, spanning 7.3 million square feet of office space, in San Jose, California, the third-largest city in the country’s most populous state. The estimated economic impact: $19 billion. The timing couldn’t have been worse. A decadelong bull market in technology had just about run its course, and the following year would mark the worst for tech stocks since the 2008 financial crisis. Rising interest rates and recessionary concerns led advertisers to reel in spending, shrinking Google’s growth and, for the first time in the company’s history, forcing management to implement dramatic cost cuts. The city of San Jose may now be paying the price. What was poised to be a mega-campus called “Downtown West,” with thousands of new housing units and 15 acres of public parks, is largely a demolition zone at risk of becoming a long-term eyesore and economic zero.
Eager to boost sales, relieve workers from mundane tasks and respond to the ongoing labor shortage, retailers and supermarkets are adding robots to their store aisles. Outfitted with cameras and sensors, autonomous inventory robots that can verify price signs and look for out-of-stock items are being deployed at big box stores like BJ’s Wholesale and Walmart-owned Sam’s Club. Inventory is one of the biggest challenges retailers face. Missed sales from empty shelves and out-of-stock items cost U.S. retailers $82 billion in 2021, according to NielsenIQ. “Retailers are spending a lot of money to know what’s coming into their stores through their inventory systems and through their point of sale systems,” said Jarad Cannon, chief technology officer at inventory robot maker Brain Corp. “But in their stores on a daily basis, they don’t have a very good model of what’s actually happening on their shelves.” So what impact will inventory robots have on U.S. retailers and the livelihood of its workers?
Finance & Economy
The number of Americans filing for unemployment benefits rose more than expected last week, evidence that the labor market is continuing to soften in the face of higher borrowing costs. Figures released by the Labor Department show initial claims for the week ended April 15 rose by 5,000 to 245,000. That is above the 2019 pre-pandemic average of 218,000 claims. Continuing claims, filed by Americans who are consecutively receiving unemployment benefits, also rose to 1.86 million for the week ended April 8, an increase of 61,000 from the previous week. The labor market has remained historically tight over the past year, but there are growing signs of a slowdown.
A key measure of home-purchase applications fell sharply last week as consumer demand cooled in the face of higher mortgage rates. The Mortgage Bankers Association’s index of mortgage applications tumbled 8.8% last week for the first time in months, according to new data. Demand for refinancing also continued to plunge last week, tumbling another 6%, according to the survey. Compared with the same time last year, refinance applications are down a stunning 56%.