In early April, workers at an Amazon.com warehouse on Staten Island voted to form the e-commerce giant’s first U.S. union, building on successful organizing efforts at Starbucks and leading to speculation that a new American union movement is underway. At Starbucks, more than 180 of the company’s 9,000 corporate stores have petitioned for union elections with 16 voting to unionize after a unionization campaign went public last August. An REI location in Manhattan last month voted to unionize, as well.
The elections follow years of union decline with the share of U.S. workers in unions dropping to 10.3 percent in 2021, down half a percentage point from 2020 and the lowest rate in decades. The tight labor market and pandemic-related work pressures, however, have created a rare opportunity for workers to rally around better pay and treatment. President Joe Biden ran on a promise to be the most pro-labor president, and a September Gallup poll found 68 percent of Americans approve of unions, the highest favorable since 1965.
The reason labor law reform proponents are hopeful is because the unionization efforts have been initiated by employees at the local level rather than the traditional centralized labor approach led by seasoned union officials. The local approach counters traditional anti-union tactics that contend outside unionizers fail to understand workers’ concerns and are only interested in dues.
Amazon in a statement said the company was “disappointed” with the vote’s outcome “because we believe having a direct relationship with the company is best for our employees.” It has launched an appeal. The New York Times reported that Amazon’s “ability to speed packages to consumers is built on a vast chain of manual labor that is monitored down to the second. No one knows what will happen if the newly organized workers try to change that model or disrupt operations.”
Discussion Questions: Will retailers likely be seeing unionization drives with greater frequency in the years ahead? How might tactics have to change to discourage such efforts, or should retailers be looking to work with unions?
Comments from the RetailWire BrainTrust:
As unionization crumbled in the U.S., so did the wages of the average worker and the increase in financial equality. It is no coincidence that the golden age of unions in the 1950s corresponded to the golden age of the U.S. economy and the smallest gap of inequality in the country’s history. Today, the power of the leadership far outweighs the workers’ power. Imagine a company with even 20,000 or more workers having no say in the company’s future nor their own. If retail doesn’t embrace worker representation as a way for both labor and management to move the company forward, they should be fearful of the outcome. Companies should not patronize workers in voice or action, they should see them as the fuel that determines the company’s long-term success.
It’s notable that the successful Amazon unionization campaign in New York came from a grassroots movement rather than an established national union. Perhaps these more localized efforts represent the future of unions. As for the subject of unions more widely, I am not particularly keen on them and never have been. To me they are an entirely extraneous component that neither owns a company nor works there. And I am very, very strongly opposed to anyone who does not want to be a part of a union being forced to pay union dues.
Neil Saunders, Managing Director, GlobalData
Unions have suffered from silly opposition based on theory more than reality — and from their own bureaucratization. Yet there are also tremendous benefits they can bring companies and which companies should embrace. I’ll especially point out that the Great Resignation wouldn’t be happening if we had more unions in place as they wouldn’t have accepted the decades long degradation in employee working conditions. This myth about “between the company and the employee” looks like a lobbyist talking point. It’s is also paternalistic which reflects exactly the reason unions are popping up again – because in their paternalism companies abuse the relationship with employees. That said, unions need to focus on the important matters – not on mere bureaucratic control which can be abused to stop progress. Hopefully new blood in the union movement can return it to a focus on the things of most importance.
Doug Garnett, President, Protonik
Happy workers don’t unionize. It is that simple.
Shelley E. Kohan, Associate Professor, Fashion Institute of Technology
I assume workers will now have to pay union dues and that they will beget corruption as they always do. We’ll see how this works out. Maybe I’m colored by my father’s experience. His union went out on strike for 9 months. He had no other source of income. When the strike ended, he had no job to go back to because they put the company on the brink of going out of business. He never forgot nor forgave.
Joel Rubinson, President, Rubinson Partners, Inc.
Headlines of the Week
As it looks to a commercial rollout of cultivated chicken later this year, pending regulatory review, cell-grown meat, poultry and seafood brand UPSIDE Foods announced $400 million in new funding, bringing its total capital raised to-date to over $1 billion. The round was co-led by Singapore-based investment company Temasek and a new investor, the Abu Dhabi Growth Fund (ADG). Existing stakeholders Bill Gates, Cargill and Cercano Management, among others, reinvested in the round, joined by new backers including Baillie Gifford, SALT fund and Synthesis Capital. The company said it will use the new funds to build a commercial production facility that can produce any type of meat in both ground and whole cut formats; however, the company’s initial focus is exclusively on chicken. The capital will also go towards adding staff and building out a supply chain for its cell-feed components to “reduce costs and enable greater scale.”
Farfetch has made many investments and acquisitions on its quest to dominate luxury fashion, and now it’s doing the same in beauty. Hot on the heels of its acquisition of specialty retailer Violet Grey in January (and following the minority stake it took in Neiman Marcus Group this month), the platform will launch beauty on Wednesday with an assortment of over 100 prestige brands. Simultaneously, Off White, which is owned by Farfetch, will launch four fragrances with the retailer, while Browns Fashion, the London-based luxury retailer, is also launching a limited beauty assortment online and in its two brick-and-mortar doors. The battle for the prestige beauty shopper has reached a fever pitch in the past two years. Mass players like Kohl’s and Target have gone deeper into the category via partnerships with Sephora and Ulta Beauty, respectively, while digital players like Net-a-porter and Ssense have gone deeper into the category. Farfetch is looking to differentiate itself with a gender-neutral assortment in an approach it is calling “Beauty Beyond Boundaries.”
Apparel & Footwear
Michael Kors is getting into the kids’ market for the first time. He will launch his first children’s line on Tuesday in partnership with French luxury group Children Worldwide Fashion (CWF). The collection features clothing and accessories for girls aged 4 to 14. It will be sold globally through Michael Kors digital flagships across North America, Europe and Asia, wholesale partners such as Galeries Lafayette, Zalando, Ounass and Salam Stores and through CWF distribution points. Retail prices range from $45 to $139. Later this year the Michael Kors children’s line will be expanded to include infant and toddler sizes for girls ages, ranging from 3M to 3T. CWF, which began 65 years ago producing its own children’s wear line, switched 30 years ago to licensing high-end brands for children’s wear. Today it produces children’s wear for such brands as Givenchy, Lanvin, DKNY, Chloé, Kenzo Kids, Marc Jacobs, Paul Smith Junior, Karl Lagerfeld Kids, Zadig & Voltaire, Boss Kidswear, Aigle and Timberland.
Gap Inc. has relieved Old Navy president and chief executive officer Nancy Green of her command. Green’s departure, while sudden, is not surprising considering Old Navy, the biggest division of Gap Inc., has been struggling in recent seasons. A search for a candidate from outside the corporation is being sought, as Green will be exiting Old Navy this week. With the business hitting turbulent waters, and getting increasingly promotional, Gap Inc. has revised its first-quarter sales guidance downward to about low- to midteens year-over-year declines from its prior guidance of mid- to high-single-digit year-over-year declines. “We believe in the power and potential of the Old Navy brand and the contribution it will have as we execute our Power Plan strategy and drive value creation at Gap Inc.,” said Gap Inc. CEO Sonia Syngal in a statement. Syngal said she will work closely with the Old Navy team until a successor for Green is found.
Victoria’s Secret & Co.’s latest offerings are for tweens. The lingerie and beauty retailer — parent company to Victoria’s Secret Lingerie, Victoria’s Secret Beauty and Pink — launched its newest brand, Happy Nation, an innerwear and cosmetics label for tweens, on Tuesday at happynation.com. The “size-inclusive and gender-free” assortment, which ranges in price from $5 to roughly $40 each piece, includes loungewear, swimwear, bras, underwear and beauty products for ages eight to 13. There’s also tie-dye prints, pastels, muted hues and bright colors in sizes small through XL-plus. There are also “body care” products that are made from things like lemon oil, coconut water and vanilla and are vegan, sulfate-free, made without dyes or animal testing and come in recycled packaging. Happy Nation is part of Victoria’s Secret & Co.’s latest transformation efforts. The retailer began updating its look in 2018 to curb declining revenues, which were sparked by changing consumer preferences, the #MeToo movement, and backlash over Victoria’s Secret’s unattainable beauty standards.
Animal-free outerwear specialist Save the Duck, the first Italian fashion company to obtain B Corp status in July 2019, has been acquired by two private investors. The brand had been controlled by private equity fund Progressio SGR since 2018. Swiss beauty company L’Occitane Group executive director and chairman Reinold Geiger and chief executive officer André J. Hoffmann have raised their stakes in the brand through their personal investment vehicles Société D’Investissements Cime S.A. and Anatra Investments Ltd. Following the deal the two investors will own an 80 percent combined interest in the company, while the remainder controlled by Nicolas Bargi, founder and CEO of Save the Duck, who will remain in that role. Both investors were previously owners of minority stakes in the company, alongside other undisclosed entities, which are now exiting the brand, known for its Plumtech down-free padding technology and commitment to sustainability. The value of the transaction was not revealed.
Athletic & Sporting Goods
Lululemon aims to double its 2021 revenue in the next five years, putting it on track to hit $12.5 billion in sales by 2026, as the retailer rides a wave of Covid pandemic-fueled demand for workout clothes. Lululemon on Wednesday announced a handful of longer-term growth targets, including for its men’s business, ahead of a scheduled analyst day event. It cited three key drivers of momentum in the coming years: product innovation, customer experience and market expansion. The athletic apparel retailer is aiming to double its men’s revenue, double its digital sales and quadruple international revenue, all in the next five years. Lululemon teased the official debut of a new membership offering in the coming months, as well as its foray into Spain and Italy through new brick-and-mortar shops. The retailer’s sales grew more than 40% in 2021 from the prior year, totaling $6.25 billion, fueled by a strong direct-to-consumer business and overseas momentum for its yoga pants, leggings and sports bras.
The owners of David’s World Cycle have announced a transaction rumored for several months: They have sold the 21-store Florida chain to Trek Bicycle. The chain was founded in 1989. It was featured last April in the “Big BRAIN 10” listing of the 10 largest bike retailers in the U.S. At the time, David Sanborn told BRAIN that the business has added locations both by acquiring existing stores and opening new ones from scratch. The chain’s stores were all along the I-4 corridor until 2020 when it expanded to Gainesville, Tallahassee and Jacksonville.
Cosmetics & Pharmacy
Cosmetics group L’Oreal beat expectations for first-quarter sales growth on Tuesday, batting away concerns about lockdowns in China and inflation as consumers snapped up high-end beauty products in its key markets. “We are not even close to experiencing a luxury down-turn, we see many people that are affluent and even the middle classes want to indulge,” L’Oreal chief executive officer Nicolas Hieronimus told analysts in a call. “The overall demand for luxury products and premiumized products is very high – the market is premiumizing overall,” he added. The Active Cosmetics division, which includes Vichy and CeraVe labels, grew fastest, with sales up 18%. Its largest division, L’Oreal Luxe, which sells Giorgio Armani and Lancome products, clocked 17.5% growth. The two divisions are the beauty giant’s most profitable divisions. Overall group sales rose 13.5% on a like-for-like basis to 9.06 billion euros ($9.8 billion) over the first three months of 2022, with double-digit growth from Europe, North America and mainland China.
LVMH Beauty, a division of LVMH Moët Hennessy Louis Vuitton, has signed a multi-year strategic partnership with Origin Materials, Inc., the world’s leading carbon-negative materials company. The deal will see LVMH Beauty purchasing sustainable, carbon-negative PET (polyethylene terephthalate) materials from Origin Materials for its fragrance and cosmetics packaging. PET produced using Origin technology is functionally identical to petroleum-based PET, but with a dramatically lower carbon footprint as it is made from sustainable wood residues which capture carbon. Additionally, Origin PET is as recyclable as fossil-based PET within the existing infrastructure, which is key to creating a circular economy with a significantly reduced carbon footprint.
Discounters & Department Stores
In a bid to monetize its assets and deep roots with the 5,000 U.S. communities where it has stores, Walmart CEO Doug McMillon said the company was doubling down in its strategy and aiming to leverage its local ties. “Our strategy is clear. It’s to build strong local businesses that share common flywheel characteristics, powered by Walmart with ideas, resources, talent and technology,” McMillon wrote in his annual letter to shareholders Thurs (Apr 21), noting that each market is positioned to deliver long-term, sustainable growth. “Our teams in each market know their customers well, and they partner on common areas to drive progress even faster,” the 55-year CEO added. “We’re expanding the ecosystem that supports them as we grow capabilities in areas like advertising, payments and other financial services and healthcare.”
The list of the potential bidders for Kohl’s Corp. is getting long, with owner Simon Property Group being named as the latest major name to be possibly interested in the Menomonee Falls, Wisconsin-based department store chain. SeekingAlpha said Friday that CNBC’s “Squawk on the Street” host David Faber reported “Simon Property and Brookfield,” presumably Brookfield Property Partners, is said to have expressed interest together in a potential bid for Kohl’s.
While American consumers have a wide array of choices when it comes to where to purchase personal care products, a large portion of them choose to go to dollar stores for these items, according to a new survey by GOBankingRates. The survey finds that the second-most purchased items at dollar stores are personal care products, with 22% of American consumers purchasing these items at the discount retailers. This comes just after food purchases, with 24% of consumers purchasing food at dollar stores, the data shows.
Dollar General will provide full-time employees access to employer-paid degree programs at Strayer University and Capella University, it announced April 4. The benefit will come via Workforce Edge, an employee education management platform owned by Strategic Education. Alternatively, the program allows eligible employees to use an annual tuition assistance allocation toward a higher education institution of their choice. Employees and their families will also have access to Sophia Learning, an online learning platform that provides general education courses. The move will help Dollar General with recruiting and retention, Karl McDonnell, president and CEO of Strategic Education, said in a release.
Emerging Consumer Companies
Plant-based meat company Nowadays has raised $7 million in a seed round. The round was led by Stray Dog Capital, with additional strategic support from Standard Meat Co., a privately-owned meat processing and packaging company. Additional participants in the round include returning investors VegInvest Trust, Tenacious Ventures, Cornucopian Capital and Good Protein Fund. New investors include Selva Ventures, Vanterra Accelerator Fund, FoodHack, Gaingels, Beyond Impact and Unpopular Ventures, and a group of angel investors. This gives the company nearly $10 million in total funding to date, including a $2 million pre-seed round from 2021. The company was founded in San Francisco in 2020 as a Public Benefit Corporation.
The San Francisco-based company has created a “precision skin care” solution which uses AI to align customers with one of 3,000 skin profiles to best meet their unique skin care needs. The company’s $6 million Seed II round, announced this week, was led by Alpha Edison, with participation from WaldenCast Ventures and Ulta Beauty, among others. In the press release, chief digital officer at Ulta Beauty, Prama Bhatt, noted, “Ulta Beauty was founded to disrupt the status quo and today, we remain focused on doing just that across every touchpoint – with greater personalization than ever before…We are thrilled to support Revea as they continue to disrupt and deliver unique, personalized skincare solutions.” The new funding will advance Revea’s effort to offer precision skincare at scale, allowing the brand to reach customers outside of its San Francisco beta program.
This week, Eurazeo announced that it has completed a minority investment in Gisou, a rapidly growing premium hair care brand that offers bee-centric natural hair and beauty products. While financial terms were not disclosed, Eurazeo’s investment came in alongside the brand’s co-founders, Negan Mirsalehi and Maurits Stibbe, who will remain majority owners, and existing minority investor Vaultier7. Founded in 2015, Gisou built a cult following around its honey-infused hair oil, which was the company’s only product for the brand’s first two years. The brand has since diversified its product offering and Eurazeo intends to support Gisou’s expansion to new categories. Additionally, Eurazeo plans to leverage its brand-building and operational expertise to expand to new channels and geographies.
Food & Beverage
Banking advisers to privately-owned dairy giant Lactalis are reportedly evaluating a possible takeover of Danone. On April 20, French business publication La Lettre A reported that Perella Weinberg Partners is evaluating whether Lactalis should pursue a full acquisition of its French peer or bid for a group of the yogurt maker’s assets. The report said Lactalis, the world’s largest dairy company by annual sales, had been mulling the move for months. Danone this week published its financial results for the first quarter of 2022. Asked about Lactalis’s reported interest in a call with analysts, Danone CFO Juergen Esser said: “We are working very actively to fix our under-performing assets. We will update you when there is something new.”
Simply Better Brands Corp. (SBBC), which operates in the emerging plant-based and holistic wellness consumer product categories, has reached an agreement to merge with Seattle-based Jones Soda Co., a maker of premium craft beverages. As part of the transaction, SBBC will acquire all of the issued and outstanding common shares of Jones at a deemed value of 75¢ per share, payable in fully paid and non-assessable common shares of SBBC based on a price per share equal to $3.65. In addition, SBBC has agreed to assume all of Jones Soda’s outstanding debt. The aggregate value of the transaction is approximately $98.9 million, the companies said. If the merger goes through, the combined company is expected to increase shareholder value through operational synergies and accelerated sales growth in three areas: food and beverage (Jones Soda and Trubar); plant-based wellness — CBD and THC (PureKana, Seventh Sense, Herve, Mirage and Mary Jones); and health and beauty (No BS Skincare).
Grocery & Restaurants
Chipotle Mexican Grill on Tuesday announced the launch of a $50 million venture fund designed to help seed “strategically aligned” companies that will join the fast-casual chain’s mission to Cultivate a Better World. Dubbed Cultivate Next, the venture fund will initially be financed solely by Chipotle and make early-stage investments in seed-to-Series B-stage companies that can accelerate Chipotle’s ability to run great restaurants, amplify technology and innovation, advance the Food With Integrity mission, and expand access and convenience for customers, the company said. “We are exploring investments in emerging innovation that will enhance our employee and guest experience, and quite possibly revolutionize the restaurant industry,” said Curt Garner, Chipotle’s chief technology officer, in a statement. “Investing in forward-thinking ventures that are looking to drive meaningful change at scale will help accelerate Chipotle’s aggressive growth plans.”
Chicago-area specialty grocer Tony’s Fresh Market has been acquired by affiliates of investment firm Apollo Global Management. Financial terms of the transaction weren’t disclosed. New York-based Apollo said Wednesday that, going forward, Tony’s Fresh Market’s founding family will remain partners in the business, serving in management roles and as shareholders. Tony’s was founded in 1979 by Italian immigrants Tony Ingraffia and Domenico Gambino, who opened their first store at Fullerton and Central Park avenues in Chicago. Currently, Itasca, Ill.-based Tony’s operates 19 supermarkets across the Chicago market and neighboring communities in Illinois. Apollo reported that several more stores are now in development. In announcing the acquisition, Apollo described Tony’s as a “unique specialty grocer” and noted that the chain holds a “differentiated position in the market” with its wide assortment of fresh produce, prepared foods and multicultural offerings. In addition, Tony’s plays a key role in the local economy and communities it serves, sourcing products from more than 400 vendors, Apollo added.
Home & Road
A constrained supply of computer chips, the Omicron variant of COVID and the war in Ukraine attributed to a 7% decline in first quarter net sales for sleep brand Sleep Number Corp., according to the company. Net sales for the period ended April 2 were $527 million, compared with $568 million in the same period of 2021. The company said it also saw a 3% dip in consumer demand. “External factors continue to disrupt global supply and weaken consumer confidence, resulting in increased business complexity and volatility,” said Shelly Ibach, president and CEO. This marks the second quarter in a row that supply chain issues negatively impacted Sleep Number’s sales. The company said its backlog has increased to more than $200 million. Net income for the quarter dropped 96% to $2 million from $66.6 million in the same quarter last year.
New Ashley HomeStores opened in the U.S. in Pennsylvania as well as in Indonesia and Kenya in March. On March 28, Ashley celebrated the soft opening of its newest store in Bensalem, Pa. The 38,000-square-foot showroom located on 1843 Street Road and is owned and operated by Abdul Ayyad, who owns 11 additional Ashley stores in the surrounding region. “This is an exciting time for us. We are excited to bring another Ashley store to Pa.,” said Ayyad. “Our brand sets the standard for providing consumers the latest on-trend furniture styles and coordinated accessories. Elsewhere around the globe, Ashley celebrated the grand opening of a 21,000-square-foot HomeStore in Nairobi, Kenya, on March 25. The new store is owned and operated by Fairdeal Furniture Ltd., which owns four additional Ashley Furniture HomeStores in the surrounding region. The store will employ approximately 12 people. With the addition the three HomeStores, Ashley’s worldwide store count exceeds 1,075 locations.
Jewelry & Luxury
Jewelry will dominate Mother’s Day spending in 2022 with consumers predicted to spend an estimated $31.7 billion on gifts, flowers, and special outings in honor of the woman of the day in each family, according to the National Retail Federation (NRF). A recent survey conducted for the NRF and Prosper Insights & Analytics said it expects Mother’s Day spending to be up $3.6 billion over last year. It also expects that about 84% of U.S. adults will celebrate the day devoted to moms in some way.“ Jewelry remains a timeless gift selection for Mother’s Day and continues to capture an increasing market share,” Prosper vice president of strategy Phil Rist said in a statement. “Forty-one percent of consumers are planning to gift jewelry this year, up from 34% in 2021, and total spending on jewelry is expected to reach $7 billion.”
Hermes is considering using the metaverse for communications although the maker of Birkin bags and other luxury goods remains focused on craftsmanship, Executive Chairman Axel Dumas told shareholders on Wednesday. “We are curious and interested” about the metaverse, he said, adding it could be a good communications tool.
Office & Leisure
Hasbro said $100 million in revenue is at risk as it suspends shipments to Russia. The note was part of the toy giant’s guidance for the year ahead, which outlined low-single digit revenue growth despite the hit from its business in Russia as well as operating profit growth in the mid-single digits. For the first quarter, Hasbro’s revenue grew 4% year over year to just under $1.2 billion while operating profit fell nearly 20%. In its consumer products segment, the company suffered from supply chain delays, and higher freight and inventory costs. For brands and retailers, there’s little relief in sight from global and macroeconomic headwinds. Backups and bottlenecks have become part of daily operating reality at this point. In China, widespread lockdowns in Shanghai are already sparking warnings of more supply chain pain ahead. Hasbro is managing all of these difficulties at a critical time for the company, with new CEO Chris Cocks settling in and an activist investor pressing the company to spin off its successful game division, Wizards of the Coast, and prepping for a fight over the company’s board.
One More Game — a game studio built by veteran developers behind Warcraft, StarCraft, Diablo, and Guild Wars — has raised $22 million. The Seattle company is also unveiling a few details about Spellcraft, an online competitive strategy fantasy game that the company hopes will start a new genre in games. The game is targeted at the PC but it will add more platforms later. Lightspeed Venture Partners led the round. Also joining the round are Griffin Gaming Partners and Andreessen Horowitz. Other participants include Animal Capital, Cleo Capital, and several individual investors. Since its formation in 2019, the studio has been in development on its debut title, applying its novel Alpha-driven development approach to rapidly iterate on gameplay with feedback from real players. The unannounced game has been operating as a live service with regular playtests for a small group of players since late 2020, with details and expanded playtest opportunities forthcoming. Players interested in joining the upcoming private Alpha Preview Event for Spellcraft can sign up to participate.
Seventy percent of consumers are planning to participate in or attend in-person graduation ceremonies. That’s according to Party City, which recently surveyed shoppers nationwide about their upcoming graduation celebration plans. The retailer found that 32% of consumers plan to celebrate their graduates with a big party in an outdoor space, followed by 31% of consumers planning smaller, more intimate celebrations at home. Additionally, 49% of consumers consider 2022 to be the first “normal” graduation year since 2019, while 30% still consider this year “not normal.” To expand the celebrations, Party City will be providing graduates across the country with custom graduation-themed Snapchat AR lens from Friday, April 15 through Saturday, June 6. Party City will also be ‘popping up’ at select graduation ceremonies across the country – from elementary to university level – providing students and teachers with the essentials they need to celebrate graduation this year. Party City, part of Party City Holdco Inc., operates more than 800 company-owned and franchise stores throughout North America.
Technology & Internet
Amazon is launching a $1 billion fund that will back companies “of all stages” building supply chain, fulfillment and logistics technologies, the company announced Thursday. The Amazon Industrial Innovation Fund will focus on new technologies that will “increase delivery speed and further improve the experience” of warehouse and logistics employees, Alex Ceballos Encarnacion, Amazon’s vice president of worldwide corporate development, wrote in a blog post. The fund is one subset of Amazon’s growing investment activity. The e-commerce giant in 2020 launched a $2 billion fund to invest in climate technologies, and it operates the Alexa Fund, which has made investments in speech-recognition technology, among other areas.
Amazon announced Thursday that it will let third-party merchants offer Prime membership benefits such as free and fast shipping directly to Prime customers through their own online stores rather than solely through the e-commerce giant’s platform. The option, called Buy with Prime, will initially be available by invitation only for merchants already using Fulfillment by Amazon, the service that lets businesses send products to Amazon (AMZN) fulfillment centers and have the tech company handle the packing, shipping, returns and customer service. Prime subscription members will see the Prime logo on eligible products in other merchants’ online stores, and they can choose to check out with the payment and shipping information stored on their Amazon account. The move, which potentially loosens Amazon’s grip on other online merchants, comes as Amazon has faced renewed antitrust scrutiny in part for allegedly giving itself an unfair advantage over third-party sellers. Amazon has come under fire for allegedly using data from individual third-party sellers to inform the development of its own private brand products. Amazon has denied it does so.
Finance & Economy
Sharply rising mortgage rates are taking their toll on the nation’s homebuilders, as already pricey new construction becomes even less affordable. Builder confidence in the market for new single-family homes fell 2 points to 77 in April, according to the National Association of Home Builders/Wells Fargo Housing Market Index. Any reading above 50 is considered positive sentiment, but the reading marks the fourth straight month of declines for the index, which stood at 83 in April 2021. The average rate on the 30-year fixed mortgage stood at around 3.90% at the beginning of March, and is now up to 5.15%, according to Mortgage News Daily. That is the highest rate in more than a decade.
To the list of recent retail industry headaches — COVID, the great resignation, supply chain disruptions, inflation, declining consumer sentiment — we can now add the looming threat of stagflation. Stagflation is roughly defined as what happens when rising prices converge with declining demand. In spite of low unemployment and higher wages, consumers have been losing buying power for staples like gasoline, food, and shelter. In March, the national average cost to rent a one-bedroom apartment was 12% higher than a year ago, according to Zumper.com, an apartment listings platform. Driven in part by the war in Ukraine, the price of a pound of bread is 27% higher today than it was before the pandemic, according to the St. Louis Fed. Gasoline is up more than 100% from two years ago.