The morning rush looks different now. So do our diets as we rethink our meal, food and nutrition choices. The International Food Information Council says that more than four out of five of us have changed food habits during the pandemic. Food service companies are responding to these changes with new service levels, offerings and formats.
Changes to daily routines, like the morning commute, mean we cook, eat, shop and think differently about food, especially breakfast. We’re shifting from meals to snacks and rethinking when we eat. Brunch has become a big(ger) business. Restaurants have added more — and more interesting — breakfast items to menus and serve them throughout the day. Many places, including traditional morning stops like coffee shops, offer to-go kits filled with pastries, fruit and savory dishes as well as easy-to-eat items like breakfast sandwiches and burritos. They make getting a coffee a special treat and offer creative to-go cocktail kits.
We are what we eat
Diets are bifurcating to either support immunity or provide comfort. Restaurants and retailers have a chance to offer consumers options that are healthy, healthyish or not. They can make it easy for shoppers to find natural, clean labels and ingredients. Some are partnering with local chefs, purveyors and artisans to support the local food ecosystem and feature limited-time offers at a variety of price points and calorie levels. This gives consumers a break from cooking, access to seasonal ingredients and the option to try new items any time of day.
Tech is on the menu
The how and where of getting our food has changed, and new behaviors, such as online ordering, meal kit subscriptions and outdoor dining, will continue. Operators can optimize their physical footprint — or create new formats — with smaller indoor dining areas, more outdoor space, a second drive-thru dedicated to online order pick-up, kiosks for areas where drive-thru doesn’t make sense and new walk-up concepts adjacent to full-service units that offer a subset of the menu. All these options are designed to serve guests, ensure safety, speed digital ordering and improve experience, especially during times when extra quick service is demanded.
The relationships Americans have with food have changed during the pandemic. Many restaurants and foodservice providers have fallen by the wayside. Survivors, by and large, have adapted to this new reality. What will it take to keep up with what’s coming next? That is now and has always been the question.
Discussion Questions: Do you think restaurants and other foodservice providers have adapted well to changes brought about as a result of the pandemic? What products, services, technology or other developments do you think will influence consumers’ use of these businesses in the next several years?
Comments from the RetailWire BrainTrust:
Once the majority of the population are vaccinated, people will return to restaurants in full force, so most companies aren’t interested in spending large dollars to completely reinvent the wheel. I live in Georgia where not only are restaurants at full capacity, but people are so happy to be out they are practically hugging total strangers. Where the smart money should go is on de-risking restaurants for future events, which means investing in elevating the dining experience, investing in staff, and diversifying their services to give customers a range of integrated online and offline options.
DeAnn Campbell, SVP Strategy & Insights, Harbor
In addition to greater technology adoptions and process changes, what has been revealing is the partnering benefits between the public and private sectors. Many communities have adopted variances and closed streets to traffic to encourage foot traffic and expand outdoor dining. Consumers have responded favorably to these changes, and municipalities have enabled small retail establishments to survive and even thrive while supporting the local tax base.
Mohamed Amer, Independent Board Member, Investor and Startup Advisor
Many (I don’t know if most) restaurants and food service retailers have adapted well to the conditions brought on by the pandemic. The changes that will stick, and even increase are ordering online, improved delivery, and sidewalk/outdoor dining (then we will only be 50 years behind the Europeans and Latin Americans in that category). Behind every cloud, there is a silver lining.
Bob Amster, Principal, Retail Technology Group
I am not entirely convinced about smaller indoor dining areas. In Arizona, restaurants are open at full capacity and most full-service ones are busy both inside and out! People are, and increasingly will, get back to dining out. However, other structural changes make sense: dedicated areas for order collection, curbside services, better drive-thru facilities in quick service restaurants, and so forth will all support trends that are likely to persist.
Neil Saunders, Managing Director, GlobalData
Headlines of the Week
Full-line office and residential furniture resource Herman Miller has reached an agreement to acquire contract office furniture specialist Knoll in a cash and stock transaction valued at $1.8 billion. The companies said that the transaction has been unanimously approved by the boards of directors of both organizations and is expected to close by the end of the third quarter. According to the agreement, Knoll shareholders will receive $11 in cash and 0.32 shares of Herman Miller common stock for each share of Knoll common stock they own. The companies said that based on Herman Miller’s five-day volume weighted average price of $43.94 per share, this would represent a purchase price of $25.06 per share, which also represents a 45% premium to Knoll’s closing price on April 16. With the completion of the sale, Herman Miller shareholders will own about 78% of the combined company, while Knoll shareholders will own about 22%. The companies said that both Herman Miller and Knoll have 19 brands with a presence across 100 countries, a global dealer network, 64 showrooms globally and more than 50 physical retail locations. They each also have global multi-channel e-commerce capabilities. They will have pro forma annual revenues of $3.6 billion and prom forma adjusted EBITDA of about $552 million, based on each company’s performance over the past 12 months.
L Brands, the owner of Victoria’s Secret, is reportedly on the hunt for a new buyer after a deal with a private-equity firm fell through last year, and is seeking more than double what it wanted before. Sources familiar with the matter told Bloomberg the company wanted a deal that would value the brand at between $2 billion and $3 billion. Previously, Sycamore Partners had agreed to buy a 55% stake in the company for $525 million. The private-equity firm pulled out in May 2020 after filing a lawsuit claiming Victoria’s Secret’s decision to close stores during the pandemic, cut back on new inventory, and not pay rent for April violated the two companies’ agreement. L Brands later said the decision to split was mutual. L Brands CFO Stuart Burgdoerfer confirmed to Bloomberg that the company wanted a considerably higher valuation this time round, after recouping lost sales at the back end of 2020. “As a result of the substantial improvement in performance at Victoria’s Secret, various sell-side analysts have valued the business at as much as $5 billion,” Burgdoerfer told Bloomberg.
Apparel & Footwear
Gap Inc.’s fast-growing Athleta activewear brand is on a mission to double sales by 2023, and the road there for the billion-dollar brand goes through Canada. Athleta, whose most direct competitor is Lululemon Athletica, is taking their athleisure fight to Canada with its first two international stores set to open this fall: one in suburban Toronto at the Yorkdale Shopping Centre, and the other just outside Lululemon’s hometown of Vancouver at the Park Royal Shopping Centre. At Gap Inc.’s investor day in October, it was made abundantly clear that Athleta, whose sales crossed $1 billion last year, along with Old Navy, which is eight times its size, are at the center of the company’s growth plans even as the Gap and Banana Republic brands keep shrinking. Gap Inc. CEO Sonia Syngal said at the time that she wanted Old Navy and Athleta combined to make up about 70% of net sales by 2023 from 55% last year.
Lululemon is testing a resale program where shoppers can sell and buy used items Lululemon is getting into resale. The leggings and sports bra maker announced Tuesday it is piloting a trade-in program in California and Texas next month, which it plans to expand to an online resale program in June. Starting in May, Lululemon customers in California and Texas will be able to trade in gently used Lululemon items in a store or by mail in exchange for a Lululemon gift card. The following month, those gently used items will start to be sold online to people who want to pay less and don’t mind a bit of wear on their tops and bottoms. The company is calling the pilot “Like New.” Lululemon is partnering with Trove, a business that already helps brands like Levi’s and Patagonia build out resale marketplaces, to make it happen. Lululemon says that all traded-in items will be cleaned, and the items that don’t meet its quality standards will be recycled.
Paul Stoneham is leaving the Norwegian outerwear maker by the end of the year after serving as its chief executive since 2015. Stoneham, who led Helly Hansen through a 2018 sale to the Canadian Tire Company, will remain in his role while the brand appoints and completes handover to a new CEO, the company said Wednesday. Helly Hansen spearheaded the development of lightweight waterproof shells and synthetic fleeces during its 140-year history, and in recent years its “H/H” logo has helped it to capitalise on surging demand for items that combine a sporty, technical vibe with streetwear cred. Helly Hansen’s sales more than doubled to NOK 4.3 billion ($510 million) during Stoneham’s tenure.
In its second executive announcement this week, VF Corporation on Thursday announced the appointment of Matt Puckett to chief financial officer. Puckett succeeds Scott Roe, who was with the company for 25 years. Puckett has been with the company for 20 years and served in a series of financial roles, including as the CFO of Timberland after VF’s 2011 acquisition of the brand. VF on Wednesday announced the appointment of Kristin Harrer, who will lead Van’s global marketing and creative teams as global chief marketing officer. Harrer comes to the company from Dollar Shave Club, where she served as its chief marketing officer. VF Corporation is naming executives to key positions as it, like other apparel and footwear retailers, finds its way forward in a market that has been changed by COVID-19. Yet, VF engaged in bold moves, most notably with its $2.1 billion acquisition of streetwear brand Supreme at the end of 2020.
Athletic & Sporting Goods
Gridiron Capital, LLC, is pleased to announce that its portfolio company, Good Sportsman Marketing Outdoors, a company that is comprised of a number of outdoor and sporting consumer goods companies, has acquired Plano Synergy’s hunting accessories and archery brands from Pure Fishing Inc. Terms of the transaction were not disclosed. Founded to meet the growing needs of the enthusiast sportsman, GSM Outdoors is the leading outdoor and sporting consumer goods company, with brands dating back to 1948. The Company owns 33 industry-leading brands including Stealth Cam, Walker’s, Muddy, Hawk, and Big Game, and through its acquisition of Plano Synergy’s hunting and archery accessory brands, the Company will add Wildgame Innovations, Ameristep, Tenzing, Zink, Halo Optics, Flextone, Avian X, Evolved, Barnett and Zero Trace to its existing portfolio.
Add Under Armour to the list of companies that will be making working remotely — at least part of the time — a permanent reality. The Baltimore-based sports brand said that it is scaling back the size of its new global headquarters in Port Covington, a 50-acre site in its hometown that it purchased five years ago, as it moves toward a hybrid work-from-home/work-from-office model. The original plan was to devote three-quarters of the 3.9 million square feet it owns at Port Covington to office space; however, the new location will be 40 percent smaller, which the company said is due to the new work model that is being instituted as a result of the pandemic.
Dubin Clark, a private equity firm with offices in Boston, MA and Jacksonville Beach, Florida, has invested in a new portfolio company, iROCKER, Inc (iROCKER). iROCKER is a watersports lifestyle company focused on designing and innovating outdoor recreation products, including inflatable stand-up paddleboards and other watersport accessories. Since launching its flagship iROCKER SUP brand in 2013, the company has introduced its Nautical and Blackfin brands to capture the full needs of SUP enthusiasts. In addition, the company has expanded into accessory offerings, including wave mats, floating docks, coolers, speakers, kayak conversion kits, backpacks, leashes, paddles, SUP anchors, and pumps. iROCKER has earned a reputation as a market-leader with best-in class products and service while continuously cultivating new product innovations for an engaged customer base.
Cosmetics & Pharmacy
In an effort to address sustainability across its global operations, Love Beauty and Planet introduced its first aluminum refillable hair care bottles at Target. The Unilever personal care brand’s reusable shampoo and conditioner bottles, and refills, are now available in Target locations and online in its best-selling scents, according to an announcement emailed to Retail Dive. A 16-ounce bottle retails for $9.99. This initiative is part of Love Beauty and Planet’s larger sustainability commitments, which include achieving net-zero emissions by 2030, and having 100% recyclable, refillable or compostable products and packaging by then, the company said.
Amazon has already taken over consumers’ doorsteps with delivery boxes, launched into the streaming TV wars, bought into grocery with Whole Foods and developed a high-tech and highly automated convenience store. Now it’s coming for the hair salon. Well, at least one hair salon. The tech giant launched Amazon Salon on Tuesday, giving the world a new vision of the hairstyling experience with a 1,500-square-foot, two-level outpost on Brushfield Street in London’s Spitalfields district. Amazon said it is not looking to open more salons, but will use the location to test the latest technology, from augmented reality hair consultations to point-and-learn functionality. The actual styling will be done the old-fashioned way, provided by Elena Lavagni, owner of Neville Hair & Beauty, an independent London salon. Amazon Salon is surely not that big of a bet, but it is part of the company’s growing push in the related worlds of beauty and fashion, which saw the launch of a long looked for luxury app last year.
Discounters & Department Stores
In a new AlixPartners survey, consumers were asked where they’ve been buying shoes during the Covid pandemic, and overwhelmingly the answer was department stores. 37% of people said they’ve bought shoes on a department store retailer’s website since the start of the health crisis, while 33% said they’ve made a footwear purchase recently in a brick-and-mortar department store. When the respondents were asked specifically where they’ve been shopping for nonathletic footwear, Macy’s was No. 1.
Adding to its growing roster of brand partnerships, Kohl’s on Tuesday said it will bring Tommy Hilfiger men’s sportswear to more than 600 stores, as well as an expanded assortment online in the fall. The discount department store will install “an elevated branded in-store and merchandise experience in nearly 100” of those stores, according to a company press release. The announcement is the latest in a series of new tie-ups at Kohl’s in recent months, including with Cole Haan, Eddie Bauer, Lands’ End and Sephora.
The Saadia Group officially launched the American brand Lord & Taylor as a digital collective store, which promises to offer products from exclusive collaborations and merchandise. “The future of retail is fast and agile, mirrored by our team, which has managed to put together a fantastic assortment of merchandise and a website in record time of less than 120 days,” says Jack Saadia, principal and co-founder, The Saadia Group. “We are deeply committed to continuing the rich legacy of the brand in a progressive way. Today’s unveil is just the beginning.” Exclusive collaborations, fresh assortments, new launches across categories and a private label offering will be revealed in the next few weeks.
Emerging Consumer Companies
The Expert, a Los Angeles-based interior design platform, announced that it has raised $3 million in seed funding. The round was led by Forerunner Ventures, with participation from Sweet Capital, Promus Ventures, Golden Ventures, Jeffrey Katzenberg’s WndrCo, AD 100 designer Brigette Romanek and goop founder Gwyneth Paltrow. The Expert offers 1:1 video consultations with leading interior designers. The founders consist of Jake Arnold, a celebrity interior designer (who has worked with John Legend, Rashida Jones, and Chrissy Teigen, among others) and Y-Combinator alum Leo Seigal, who previously founded and sold Represent.com to CustomInk for $100 million in 2015.
Away, the travel brand last valued at $1.45 billion, named co-founder Jen Rubio chief executive officer after she spent two months in the role on an interim basis. She succeeds Stuart Haselden, who left in January after taking over from Steph Korey, Away’s other co-founder. Away’s revenue fell by an estimated 55 percent last year, according to Bloomberg Second Measure, which analyzes anonymous consumer transactions. With travel expected to rebound, Away is preparing for increased demand and a potential IPO.
Stix, the Philadelphia-based women’s personal care brand, announced that it has raised a $3.5 million seed round. The investment was co-led by Resolute Ventures and SWAT equity partners, with participation from Entrepreneurs Roundtable Accelerator, Bullish and a variety of strategic angels, and brings the total amount raised by the company to $5 million. Stix launched in 2019 with a D2C pregnancy test that was easy to buy and use, and that eliminated some of their associated stigma. The company then expanded to ovulation tests and prenatal supplements. Most recently, Stix has moved into UTI diagnostics tests, pain relief products and preventative supplements.
Grocery & Restaurants
Subway on Wednesday flatly said it is not for sale after media reports over the past week and an anonymous franchisee letter Monday that asked for a share of any proceeds if the company were sold. “Subway is not for sale,” a spokesperson for the Milford, Conn.-based quick-service sandwich chain said in a statement. Earlier in the week, an anonymous group of franchisees had published an open letter to Elisabeth DeLuca, widow of founder Fred DeLuca and a major owner of the brand, saying their Subway “dream has turned into a nightmare.” In the letter, “A Concerned Group of Subway Franchisees” outlined six changes they would like to see in the company. The first five were enumerated, including: Any change to franchise agreements must be mutually agreed upon; Franchisees should have the right to directly lease their stores, rather than through a Subway subsidiary; Franchisees should be able to source fresh vegetables every day and offer higher quality ingredients when available; Subway Business Development Agents must be barred from purchasing stores closed due to their inspections; and Franchisees should be exempt from paying royalties to Subway in the amount of the Paycheck Protection Loan, part of the federal government assistance program during the pandemic, and any federal aid that they have received. The sixth request brought up rumors of a possible sale of the brand, which the company flatly denied.
The parent company of Furr’s Fresh Buffet, Ryan’s, Old Country Buffet, Hometown Buffet and other concepts filed for Chapter 11 bankruptcy protection this week. San Antonio-based Fresh Acquisitions LLC listed assets of between $1 million and $10 million, and liabilities of between $10 million and $50 million, according to its bankruptcy filing, which was made in the Northern Texas Division of the U.S. Bankruptcy Court. Several of Fresh Acquisitions’ affiliates, including Buffets LLC, also filed bankruptcy at the same time. VitaNova Brands, which manages Fresh Acquisitions’ restaurants through an agreement with the company, is providing a debtor-in-possession loan of $3.5 million, and said it would focus on operating the Tahoe Joe’s and Furr’s AYCE Marketplace banners going forward.
Home & Road
Luxury home furnishings retailer RH will open four new showrooms in the U.S. this year and plans to expand into Europe in 2022. “Since we the people of Team RH generally move in the opposite direction of the herd, are allergic to hunkering down and surely don’t believe we belong in the pandemic pile. … We spent the time reimagining and reinventing ourselves at a never-before-seen pace,” Gary Friedman, CEO of RH, wrote in his quarterly letter to shareholders. “We are building the most comprehensive and compelling collection of luxury home furnishings in the world,” he also said in the letter. “The desirability and exclusivity of our product amplified in our inspiring spaces has enabled us to gain significant market share with RH core demand up 36% in the fourth quarter.” The company plans to introduce its new RH Contemporary collection later this fall and then add on RH Color, RH Couture and RH Bespoke over the next several years, according to Friedman.
WAC Lighting has announced its acquisition of all operating assets related to the Schonbek brand from Swarovski Lighting, Ltd., which includes the manufacturing plant that will remain in Plattsburgh, NY. WAC is a leading manufacturer of LED architectural, task and decorative lighting, as well as smart ceiling fans. WAC will now own and operate a key US-based factory that will expand its domestic manufacturing capabilities to include fabrication, finishing, and assembly. The Plattsburgh factory will focus on made-to-order and custom products for all of the brands in the portfolio, including Modern Forms, dweLED, WAC Lighting, LIMITED and AiSPiRE. It will also play a strategic role in designing new products and developing new luxury finishes for all brands. This synergy underscores WAC’s commitment to vertical-integration and market expansion. Schonbek is a global brand with established distribution in Europe, Australia and the Middle East where WAC does not yet have a presence. This strategic acquisition can be expected to be a precursor to an introduction of the W Group companies into those markets.
Jewelry & Luxury
Xcel Brands, owner of fine jeweler Judith Ripka as well as fashion brands C. Wonder, Isaac Mizrahi, Logo by Lori Goldstein, Halston, and Highline, has refinanced its credit facility to the tune of $100 million. The refinancing includes a $25 million term loan under BHI and First Eagle Alternative Credit, and an additional $25 million for acquisitions. A separate loan by First Eagle Alternative Credit will provide an additional $50 million. The loans are subject to lender approval. Robert W. D’Loren, Xcel Brands’ chairman and CEO, said in a statement that he welcomes the partnership with BHI and First Eagle. “The facilities provide us with an immediate $10 million of liquidity and up to $75 million for future acquisitions,” he said. “We are seeing attractive opportunities that can drive our digital and livestreaming DTC businesses. Timing is perfect for a facility of this nature.”
The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) slapped sanctions today on Myanmar Pearl Enterprise (MPE), a state-owned pearl producer. MPE will now be added to OFAC’s Specially Designated Nationals List, which means that U.S. companies are forbidden to do business with it, and its U.S. assets will be frozen. The Biden administration has been steadily increasing sanctions on businesses connected to the Burmese military—including companies that produce its famed rubies and gems—ever since Feb. 1, when the country’s armed forces overthrew its democratically elected government in a widely condemned coup.
A trio of high-end luxury companies are coming together to tackle counterfeit goods through a blockchain-based seal of authenticity. Louis Vuitton parent firm LVMH, Prada and Richemont-owned Cartier unveiled the Aura Blockchain Consortium on Tuesday. The collective effort aims to give shoppers a level of assurance that the pricy products being purchased are authentic. As reported by CoinDesk in March 2019, LVMH enlisted a full-time blockchain team under the Aura codename to develop a cryptographic provenance platform for the luxury market. The team worked closely with Ethereum design studio ConsenSys on a project that finally appears to be coming to fruition.
Hong Kong billionaire brothers Victor and William Fung are exploring selling their stake in Delvaux, a 192-year-old Belgian luxury leather bagmaker, people with knowledge of the matter said. The Fungs are working with advisers and have reached out to prospective suitors on the potential divestment of the asset, the people said. A sale could value the bagmaker at around $500 million to $600 million, said the people, who asked not to be identified as the information is private. The brothers acquired the stake together with Singaporean state investment company Temasek Holdings Pte in a 2011 deal, giving the two parties majority control of the company, they said.
Office & Leisure
In a bid to improve customer shopping experience and growth, Camping World has hired Elizabeth Garry to serve as its vice president of e-commerce and Jessica Wegner as vice president of customer loyalty and membership, the company announced. Garry will oversee the company’s omnichannel strategy to create a seamless shopping experience online and in-store. Before joining Camping World, Garry previously held roles at Walmart and Wayfair. Wegner will manage customer acquisition and retention and develop its Good Sam Membership business. Wegner brings prior experience from Ulta Beauty and Discover Financial Services, per the announcement. The recent leadership hires come as Camping World seeks to grow its business and better serve customers through new and upgraded facilities and key acquisitions, the company said. While Garry brings experience with developing and growing product categories at Walmart, Wegner most recently worked to increase loyalty and wallet share for Ulta Beauty.
Dallas-based Latticework Capital Management (Latticework) is pleased to announce its sale of American Veterinary Group (AVG) to New York-based Oak Hill Capital (Oak Hill), realizing a 6.5x multiple on invested capital (MOIC) and 82% internal rate of return (IRR). AVG is a unique veterinary services platform with a regionally focused network of general practices and innovative urgent care clinics located throughout the Southeastern United States. AVG was founded to be the partner of choice for its veterinarian partners allowing them to maintain clinical autonomy focusing on their patients instead of the administrative functions of their business. AVG grew substantially since its founding via investment in an industry leading management team and infrastructure which fueled more than 40 successful acquisitions with its veterinarian partners. Additionally, the company acquired and cultivated the first urgent care platform in the industry, helping to fill a void in the care continuum.
PetIQ, Inc. announced it has entered into a new $300 million term loan and a $125 million new asset-based revolving line of credit. The credit facility replaces both the existing term loan and ABL facilities and increases borrowing capacity by approximately $109 million. The Term Loan B, priced at L+425 with a 0.50% LIBOR floor, has a maturity of April 2028 and contains no financial covenants. The new ABL, priced at L+125 to L+175, has a maturity of April 2026. The credit facilities provide significant improvements in debt covenants, increased operational flexibility and incremental debt baskets to facilitate future growth. John Newland, PetIQ’s Chief Financial Officer, commented, “We are pleased to have partnered with Key Bank National Association on these new credit facilities which offer more favorable terms, a 125-basis point decrease in our annual interest rate on our term loan and greater financial flexibility to support our future growth.”
Technology & Internet
San Francisco-based Affirm announced Wednesday (April 21), that it has struck a deal to acquire Returnly, which deals with online returns and post-purchase payments. A press release said Affirm will buy Returnly for total of $300 million in cash and equity. Affirm bills itself as a buy now, pay later (BNPL) company “with no late fees or surprises.” The release added that Affirm shows consumers “what they will pay up front, never increase that amount, and never charge any late or hidden fees.” The deal comes as consumers have turned to eCommerce as never before, spurred on by the pandemic. Along with the boom, the number of eCommerce returns has skyrocketed, challenging both vendors and customers. The companies said that “Returnly serves more than 1,800 merchants, has helped process more than $1 billion in returns, and has been used by over eight million shoppers. With Returnly, eligible consumers receive an instant merchant credit upon initiating a return, allowing them to order a new or replacement item immediately versus waiting until their return is fully processed.”
Amazon is quietly rolling out a way for some sellers on its site to engage with shoppers, in a move that represents a departure from its historically tight controls over customer data. Last week, Amazon began piloting a tool that enables U.S. companies that are part of its Brand Registry program to email marketing materials to shoppers who have opted to “follow” their brands. These companies can then notify those shoppers when they launch a new product or promotion. The follow button is featured in areas such as a businesses’ store page and videos on Amazon Live, Amazon’s livestream shopping platform. The tool, called “Manage Your Customer Engagement,” is designed to drive repeat purchases for vendors and sellers and help them build a more robust following on Amazon’s sprawling marketplace. Amazon’s decision to let third-party companies contact shoppers is somewhat surprising. Amazon has long prohibited businesses that sell on its site from soliciting customers directly, keeping data such as their email addresses private, largely to shield shoppers from spam.
Finance & Economy
President Joe Biden’s American Family Plan will likely include a large increase in the top federal tax rate on long-term capital gains and qualified dividends, from 23.8 percent today to 39.6 percent for higher earners. When including the net investment income tax, the top federal rate on capital gains would be 43.4 percent. Rates would be even higher in many U.S. states due to state and local capital gains taxes, leading to a combined average rate of 48 percent compared to about 29 percent under current law. A high combined capital gains tax rate would influence when taxpayers decide to sell assets and realize the gain. If the effect is large enough, federal revenue from capital gains income would decline because taxpayers have decided to avoid realizing gains and the higher tax rate.
Consumers around the world have amassed an extra $5.4 trillion in savings since the coronavirus pandemic began, setting the stage for a spending boom that could power a strong uplift in economic growth this year. Households had stockpiled the excess savings, equal to 6% of global GDP, by the end of March, according to Moody’s Analytics. The savings are on top of what they would have saved if the pandemic had not occurred and saving behavior had been the same as in 2019, chief economist Mark Zandi said in a research note. The United States boasts the largest share of excess saving, amounting to $2.6 trillion, or 12% of US GDP, with the United Kingdom close behind at 10% of GDP. In general, excess saving is at its highest in North America and Europe where lockdowns and government support have been most significant, according to Zandi.
The number of Americans filing new claims for unemployment benefits fell to a 13-month low last week, suggesting layoffs were subsiding and strengthening expectations for another month of blockbuster job growth in April as a re-opening economy unleashes pent-up demand. While the labor market recovery is gaining speed, red flags are emerging in the housing market, the economy’s star performer during the COVID-19 pandemic. Sales of previously-owned homes tumbled to a seven-month low in March as prices jumped to a record high amid an acute shortage of houses, other data showed. Realtors warned that expensive homes could become a permanent feature of the market, worsening inequality.