Perhaps more so than any time since World War II, this Holiday season may remind us of The Whos down in Whoville. The meaning of the Holidays will far transcend the presents under the tree. However, the joys of gift giving will indeed go on in 2020.
With 72 days left before Christmas, it is that time of year when prognosticators reveal their Holiday sales forecast. These estimates are traditionally influenced by the back-to-school season, which is the second largest seasonal period in terms of consumer spending. However, with COVID, there is nothing traditional about this year and certainly not back-to-school. Results are not yet in, but forecasters expect such overall sales to increase, but by unusual means (e.g. lots of computer and desk sales, but fewer sneakers and backpack sales). Thus, the learnings are limited.
For perspective, overall Holiday sales account for approximately 20% of total annual retail sales. Over the last 10 years, Holiday sales have increased on average 4.1% annually. Last year, sales did exactly that – there was a 4.1% increase, which nearly doubled a lackluster 2.1% increase in 2018.
Although below recent averages, forecasters are generally predicting Holiday sales to post gains over last year and reach new records in spite of COVID. This may seem like a head scratcher similar to the Grinch looking down at Whoville stripped of gifts, but still happy. How can this be with millions of people out of work, millions more having taken pay cuts and economic uncertainty into the foreseeable future?
There are a number of supporting factors. The savings rate, currently in the mid-to-high teens, has doubled this year as people have built a greater cash stockpile to protect against unknowns. Savings came from consumers foregoing expenditures such as travel and dining experiences (and sneakers and backpacks). While jobless Americans may pull back Holiday spending, higher-income consumers may have greater confidence to shop with the stock market performing well. A further round of government assistance, either checks or enhanced unemployment benefits, could also help. These factors are beginning to play out as retail sales have increased month over month since April, and stores have slowly reopened while shoppers have cautiously returned.
Deloitte is forecasting that Holiday sales will increase between 1.0% and 1.5%, which would be a record $1.1 trillion. This is a blend of two scenarios, where bleak employment news and high health anxieties are offset by increasing consumer confidence and positive vaccine developments. Deloitte expressed, “Regardless of the scenario, the consumer’s focus on health, financial concerns and safety will result in a shift in the way they spend their Holiday budget. For retailers, this season will push the boundaries on the importance of online, convenience, the role of the store and the criticalness of safe and speedy fulfillment.”
AlixPartners forecasts a 1.0% to 2.6% increase in Holiday spending. CBRE predicts Holiday sales will rise 1.5%. The National Retail Federation is waiting a bit longer this year to issue its forecast, but they released a recent survey showing that a modest majority of retailers expect higher sales this season.
Beyond what Holiday sales will be, the how and the when will likely to see dramatic changes this year. Beginning with how, ecommerce has grown between 13% to 17% annually over the last four years. With many consumers spending the majority of their time at home and reluctant to visit crowded spaces, Deloitte expects ecommerce sales to increase by 25% to 35%, which would account for approximately 17% of total Holiday sales. An Accenture survey adds support in showing that 75% of consumers intend to shop to some extent online versus 65% last year and that a whopping 43% of consumers intend to shop only online.
With the rise in ecommerce sales, the Holiday shopping season is likely to begin earlier than ever. In fact, Black Friday may have been replaced this year by Amazon’s Prime Day, which was moved from its traditional July date to this week due to COVID and the ability to get merchandise. Both Walmart and Target are leveraging Amazon’s event by hosting their own blow-out Holiday promotions at the same time. The NRF survey found that 74% of retailers expect consumers to spread out their shopping from October to December. AlixPartners further proposed, “The traditional November to December Holiday season definition is meaningless this year – and for the future as well.” Besides competing for business, the effort to spread Holiday sales through promotions over a longer period is meant to address inventory shortages caused by COVID.
However and whenever the Holidays arrive, may there be good tidings for all.
Headline of the Week
More than 73% of consumers will shop on Amazon during Prime Day
More than a quarter of shoppers, at 26.7%, expect to make a purchase during Amazon.com Inc.’s Prime Day sales event. Plus, 46.4% of consumers say they expect to browse on Amazon.com and maybe purchase, according to a survey of 416 U.S. consumers fielded Oct. 6 by research firm Coresight Research. Only 13.9% of shoppers say they don’t expect to browse or purchase while 13.0% say they don’t know. Amazon’s Prime Day event features deals from marketplace sellers and deals on many of Amazon’s own products, such as smart speakers. It also is a vehicle for Amazon to sign up more shoppers for its $119 per-year Prime membership program. Prime Day deals are only available to Prime members. Retailers are capitalizing on the influx of consumers shopping online with their own sales. Salesforce.com Inc. estimates that non-Amazon retailers boosted their online sales 37% during Prime Day 2019 compared with Prime Day 2018. The expected sales lift at other online merchants is fueled by the shopping frenzy during Prime Day and pent-up demand for deals and consumers checking prices at other retailers.
Apparel & Footwear
True Religion Apparel to exit bankruptcy
True Religion Apparel Inc. has gotten the green light for a reorganization plan that keeps more than half of its stores open. The denim and apparel company has received approval for its reorganization plan from a bankruptcy court in Delaware and said it expects to exit bankruptcy in about ten days. The plan keeps more than 50 of True Religion’s approximate 87 stores open. True Religion, which was represented by Cole Schotz, filed for Chapter 11 bankruptcy protection in April. It was one of the first retailers to cite the COVID-19 pandemic in its filing. The Cole Schotz team assisted the retailer with all aspects of its reorganization, including a settlement with a group of lenders owed $65.8 million that enabled the company to finalize the terms of its reorganization plan. Bankruptcy Court Christopher S. Judge Sontchi praised management and the professionals for successfully reorganizing a retail establishment during COVID-19, calling it an “unusual” feat even before the pandemic.
Clarks to give stores the boot in LionRock rescue deal
Clarks, one of Britain’s oldest shoe retailers, is preparing for dozens of permanent store closures by deploying an insolvency mechanism that it had previously denied was under consideration. Sky News has learnt that a rescue deal for Clarks led by LionRock Capital, a Hong Kong-based private equity firm, is contingent upon the approval by creditors of a company voluntary arrangement (CVA). Sources said that a CVA could involve as many as 50 shop closures and a switch to a turnover rent model for which the fashion retailer New Look recently won narrow approval. The axing of scores of stores would entail hundreds of job cuts, although the precise figures were unclear on Tuesday. A private equity source confirmed that LionRock’s injection of funds into Clarks, which is likely to involve more than £100m of new money, would only take place if a CVA was approved. If a deal is completed, it would see the chain’s founding family shareholder relinquish majority control for the first time in its 195-year history.
J.Jill names retail vet as CEO
It’s a homecoming of sorts for the newly named chief executive of J.Jill. The women’s apparel retailer has appointed Claire Spofford as CEO, effective no later than February 15. She will also become a member of the board. Jim Scully, who was named interim CEO of J. Jill in December following the abrupt departure of Linda Heasley, will remain in the role to ensure a smooth transition of the role. Most recently, Spofford served as president of Cornerstone Brands (a division of Qurate Retail Group), overseeing four brands: Ballard Designs, Frontgate, Garnet Hill and Grandin Road. Prior to that, Spofford served as president of Garnet Hill, one of Qurate’s lifestyle brands. Previously, Spofford was senior VP and chief marketing officer at J.Jill. She held numerous leadership roles at Orchard Brands including interim president and CEO. Prior to Orchard Brands, Spofford served as VP, global marketing of Timberland. J.Jill is coming off a turbulent seven months. In September, the company completed a transaction that kept it out of bankruptcy court.
Coronavirus: Thousands of jobs at risk as Edinburgh Woollen Mill set to appoint administrators
Thousands of jobs are at risk at Edinburgh Woollen Mill Group after it filed a notice to appoint administrators and warned of “significant cuts and closures”. The high street fashion chain, which owns Peacocks and Jaeger, has 24,000 staff. It has now lodged a notice of intention to appoint administrators to look for potential buyers as it attempts to keep the business afloat. Bosses told staff on Friday morning that national and local coronavirus lockdowns had hit sales hard. The company also blamed allegations, which it denies, that it and several rivals failed to pay some Bangladeshi suppliers during lockdown in an attempt to cut the cost of clothes they were unlikely to sell. For now, EWM Group’s stores will continue trading while insolvency specialists spend 10 days preparing an urgent review ahead of further action.
Athletic & Sporting Goods
Cubii Receives Strategic Growth Investment From Gridiron Capital
Cubii (Fitness Cubed, Inc.), a creator of innovative fitness equipment and approachable wellness solutions, announced a strategic growth investment from Gridiron Capital, LLC, an investment firm focused on partnering with founders, entrepreneurs, and management teams and a Health & Wellness Thematic Area of Expertise. This strategic investment will support and amplify Cubii’s initiatives in brand building, product expansion, and team building as the company continues to grow and expand its consumer base. Since its founding in 2014, Cubii has made wellness approachable for all by manufacturing and selling compact seated ellipticals and related accessories that cater to all ages, abilities and lifestyles. Cubii’s diverse customers range from seniors looking for a safe way to become more active to health enthusiasts searching for easy ways to add extra movement into their busy schedules. Consensus and Katten Muchin Rosenman LLP advised Cubii on the transaction.
ICON Health & Fitness collects $200M to expand connected fitness device brands
ICON Health & Fitness, the parent company of consumer connected fitness equipment brands like NordicTrack, Freemotion and iFit, has raised a $200 million growth investment. The company said that the funding was led by L Catterton, with participation from prior backer Pamplona Capital Management. Founded in 1977 as an import business, Utah-based ICON first stepped into the home fitness space in the 1980s with early exercise products such as trampolines and foldable treadmills. Fast forward a few decades, and the private company is now one of the largest manufacturers and marketers of fitness equipment for home and gyms. The majority of their products include a digital or connected component, such as performance tracking or live content delivery. According to the announcement, ICON has brought in more than $1 billion in revenue between Oct. 1, 2019 and Sept. 30, 2020, and its iFit platform now boasts roughly 700,000 paid subscribers.
Cosmetics & Pharmacy
Rite Aid acquiring Bartell Drugs
Rite Aid is acquiring a power player in the Seattle market. The Camp Hill, Pa.-based company will be acquiring Bartell Drugs, which operates 67 stores in Seattle and three counties in Washington State, for a purchase price of $95 million. The Bartell Drugs locations will continue to operate under the Bartell Drugs banner, alongside Rite Aid’s 69 stores in the area. “For more than a century, Bartell’s has been an integral part of the fabric of Seattle and neighboring communities serving families with pharmacy services, while promoting the health and well-being of local communities,” said Heyward Donigan, Rite Aid president and CEO. “The acquisition of Bartell’s fits perfectly into and accelerates our RxEvolution strategy, as our companies share a commitment to total health and wellness, the importance of the pharmacist as a trusted health advisor and the critical role the neighborhood pharmacy plays.” Rite Aid said that the move was motivated by the number of people in the Seattle area who share the company’s holistic health mindset.
Hims & Hers Goes Public Through a SPAC Merger
The telemedicine and personal care start-up Hims & Hers has filed to go public through a merger with blank-check company Oaktree Acquisitions Corp. in a deal that will value the business at about $1.6 billion, expected to close this year. Launched in late 2017 by Andrew Dudum, Hims is a men’s wellness direct-to-consumer brand dedicated to millennial men. One year later the company launched Hers expanding into female wellness. Hims & Hers currently offers sexual dysfunction, hair loss, dermatology, and anxiety and depression services. It plans to expand to sleep, fertility, diabetes, and cholesterol. Oaktree Acquisitions Corp. is a special purpose acquisition company (SPAC), which is an investment vehicle established for the purpose of going public as a shell company with no business operations but the intention of reverse acquiring or merging with another company. The merged company uses the proceeds from the SPAC’s initial public offering. Hims had planned to hold an IPO but decided earlier this year that the SPAC merger process would be more efficient and create less distraction. The company plans to use funds to accelerate growth and invest in condition expansion.
Reckitt Benckiser Kicks Off Sale Process for Some Personal Care Brands
It’s been reported by several sources that Reckitt Benckiser is preparing to sell some of its non-core personal care brands, including Veet, Clearasil, E45, and Scholl foot products. Reckitt is said to be working with advisers and information on the assets has been sent out. Sources say the package of brands could be worth as much as £1 billion ($1.3 billion) in a sale based on estimates of annual earnings before interest, tax, depreciation, and amortization north of £120 million. The process comes as Reckitt is generating strong sales from its hygiene business due to the pandemic. It is also a strategic step for its new chief executive, Laxman Narasimhan, who has been in the position for a year. The brands don’t fit into the two main businesses—health and hygiene—that have been Reckitt’s focus. The brands are cash generative and likely to appeal to private-equity players or strategics in the personal care space like Unilever, Beiersdorf, or Henkel. According to sources, Beiersdorf and Henkel are interested in parts of the package.
Sally Beauty Acquires Canadian Distributor La Maison Ami-Co
Sally Beauty Holdings has acquired Canadian professional beauty product distributor La Maison Ami-Co through its subsidiary Beauty Systems Group. La Maison Ami-Co Inc. is a professional beauty products distributor in the Canadian province of Quebec, with 10 La Maison Ami-Co stores and exclusive distribution rights in Quebec to premier professional hair color and haircare brands including Wella Professional, Goldwell, and Oribé. Sally Beauty Holdings, Inc. is an international specialty retailer and distributor of professional beauty supplies with revenues of approximately $3.9 billion annually. Through the Sally Beauty Supply and Beauty Systems Group businesses, the company sells and distributes through 5,062 stores, including 158 franchised units, and has operations throughout the United States, Puerto Rico, Canada, Mexico, Chile, Peru, the United Kingdom, Ireland, Belgium, France, the Netherlands, Spain, and Germany.
Discounters & Department Stores
Dollar General launches ‘Popshelf,’ a new concept store aimed at suburban women
Dollar General is launching a new concept, dubbed “Popshelf,” focused on seasonal, home decor and beauty products, as well as cleaning supplies and party goods. Most of the items are priced at $5 or less and include “a combination of continually-refreshed merchandise, seasonal specials and limited-time items,” as well as curated cross-over products from Dollar General’s private brands. The discounter plans to open two stores this fall under the concept near Nashville, Tennessee, and open around 30 Popshelf stores by the end of 2021.
Walmart enters Medicare broker market, threatening incumbents
Walmart is officially elbowing into the insurance brokerage industry with the launch of Walmart Insurance Services, which will start selling Medicare plans during this year’s annual enrollment period. The news first surfaced in early July that Walmart was recruiting sales managers and Medicare insurance agents in Texas, leading analysts to forecast the massive retailer was piloting a broker business to sell Medicare products in the Dallas region. But the effort is much broader, per Tuesday’s release, and could disrupt existing players like eHealth, SelectQuote and Goco, analysts say. Shares in all three brokers fell Tuesday following the news.
Macy’s invests in installment payments firm Klarna
Macy’s and payments company Klarna on Tuesday announced a five-year partnership that will allow Macy’s customers to pay in four interest-free installments. Macy’s is the only department store in Klarna’s portfolio, a spokesperson for the companies said. Macy’s Inc. has also become an investor in Klarna, according to a press release from the companies. A Macy’s spokesperson declined to disclose the amount of the investment. Also on Tuesday, Macy’s said it has partnered with DoorDash for same-day delivery through nearly 500 Macy’s stores nationwide, with no minimum order required, according to an emailed press release.
Bankrupt Tuesday Morning is looking for buyers
Tuesday Morning is formally seeking bids for its assets in bankruptcy, according to court papers. With court approval, the retailer set a bid deadline of Oct. 19. If multiple bids come in, Tuesday Morning plans to hold an auction starting Oct. 21, with a court hearing to consider approval of the sale set for Oct. 29. The off-price retailer filed for bankruptcy initially with the stated intent of reorganizing in Chapter 11. The court-approved sale procedures still allow for a reorganization.
Emerging Consumer Companies
Allbirds to open its 22nd retail location
Sustainable footwear and apparel brand Allbirds will open its 22nd retail store in October. The store will be located in its home city of San Francisco, with more locations planned for 2021. The renewed focus on its retail is in an effort to better control its distribution, and to be less reliant on other retailers, especially in the face of COVID uncertainty. The company recently closed a $100 million investment round. Today, it employs more than 400 people.
Good Buy Gear, marketplace for gently used children’s gear, raises $6 million
Good Buy Gear, a Denver-based digital marketplace focused on gently used children’s items, has raised $6 million in a Series A. The investment was led by Revolution Ventures, with participation from existing investors Access Venture Partners and Relay Ventures. The company has raised a total of $8 million in funding. Founded in 2016, the company ships nationwide, and offers delivery in Denver and Dallas. If you are selling merchandise, it picks up the items and uses technology to process, clean and perform a quality check before advertising the items on its website. The seller gets paid when the item sells.
NBA and NFL invest in Hyperice as its valuation hits US$700m
Hyperice, a manufacturer of fitness and performance recovery products, has been valued at US$700 million after raising US$47.8 million in its latest funding round. The US-based company is set to surpass US$200 million in revenues for 2020, according to the company’s chief executive Jim Huether. That is 20 times more than Hyperice’s US$10 million sales in 2017. The investment was led by several elite sports properties, including the National Basketball Association (NBA); the National Football League’s (NFL) investment arm, 32 Equity; as well as the OneTeam marketing joint venture formed by the NFL and Major League Baseball’s (MLB) respective players’ unions.
Grocery & Restaurants
Ruby Tuesday files for Chapter 11 bankruptcy, citing ‘unprecedented impact’ of COVID-19
Maryville, Tenn.-based casual-dining chain Ruby Tuesday has filed for Chapter 11 bankruptcy protection, citing the “unprecedented impact” of the COVID-19 on their business. The NRD Capital Management-owned restaurant chain will be closing 185 stores that had been temporarily shuttered during the pandemic, or almost 1/3 of the restaurant chain’s unit portfolio. But the remaining 236 company-owned restaurants will operate as usual while Ruby Tuesday uses the filing to “strengthen its business by reducing liabilities and emerge a stronger organization built for the future.” “This announcement does not mean ‘Goodbye, Ruby Tuesday,’” Shawn Lederman, Ruby Tuesday’s CEO said in a statement. “Today’s actions will allow us an opportunity to reposition the company for long-term stability as we recover from the unprecedented impact of COVID-19.”
Quality Restaurant Group buys 62 Sonic Drive-In Restaurants in Alabama and Florida
Quality Restaurant Group LLC, a multi-concept franchise operator based in Greensboro, N.C., has acquired 62 Sonic Drive-In restaurants in Florida and Alabama as part of an ongoing expansion, the company said Friday. Over the past year, QRG has purchased around 150 restaurants and now owns and operates 67 Moe’s Southwest Grill restaurants in Florida, South Carolina, Virginia, Maryland and Washington, D.C., nearly 200 Pizza Hut locations in Illinois, Indiana, Maryland and Pennsylvania and 27 units of Arby’s in Colorado, Montana, Nebraska, Wyoming and South Dakota. The group is backed financially by GenRock Capital Management, a private equity firm formed in 2017. QRG was founded in late 2018 when it purchased its Pizza Hut locations.
SpartanNash stock warrant offers company stake to Amazon
SpartanNash has issued a stock warrant to an Amazon.com Inc. affiliate that would enable the e-commerce giant to become one of the grocery distributor’s largest institutional shareholders. In an 8-K filing this week with the Securities and Exchange Commission, SpartanNash said it issued a warrant to Amazon subsidiary NV Investment Holdings LLC that would enable it to buy up to 5,437,272 shares of common stock at about $17.7257 per share, or a $96.4 million total investment, through Oct. 7, 2027. News of the warrant hoisted SpartanNash’s share price on Friday. The company’s common stock opened at $19.20 and jumped to around $23 as of noon trading. SpartanNash said in Wednesday’s SEC filing that the warrant for the Amazon affiliate comes “in connection with its entry into a commercial agreement with Amazon.” The Grand Rapids, Mich.-based food wholesaler has had Amazon as a customer for at least four years.
Home & Road
Hydro Flask Returns To Growth In Second Quarter
Helen of Troy Limited reported sales in its Housewares segment, which includes Hydro Flask and OXO, increased 20.3 percent in the second quarter ended August 31 to $167.9 million. The gains primarily reflected higher demand for OXO brand products as consumers spent more time at home cooking, cleaning, organizing and pantry loading in response to COVID-19, an increase in online sales for both OXO and Hydro Flask, higher sales in the club channel, growth in international sales, and new product introductions. These factors were partially offset by the COVID-19 related impact of certain retail brick and mortar store closures and reduced store traffic on the Hydro Flask and OXO brands. The gains reflected an organic business increase of 20.2 percent. Operating income in the Housewares segment increased 27.2 percent to $45.4 million, or 22.5 percent of segment net sales, compared to $35.7 million, or 21.3 percent of segment net sales, in the same period last year.
Loves Furniture & Mattresses debuts with 16 stores
Loves Furniture & Mattresses is making a big splash the first time out of the gate. The fledgling home furnishings retailer announced that it has opened its first 16 stores, with locations in Michigan, Ohio and Pennsylvania. Additional stores are slated to open in the coming weeks. Loves was established this year when it purchased the inventory and assets of 27 Art Van Furniture, Levin Furniture, and Wolf Furniture stores, “We are continuing to recruit and grow our team as we plan to open 31 stores across Michigan, Ohio, and Pennsylvania,” said Matt Damiani, CEO, Loves. Loves stores carry an array of home furnishings, including mattresses, sofas, dining furniture, and more, with both name brands and exclusive ones and across all price points. A rotating selection of seasonal accessories is featured in a designated “Loves Treasures” area.
Jewelry & Luxury
Pandora Debuts Star Wars Collection
A new collection, Pandora has. And the Force is presumably strong with it. On Thursday, the global jewelry brand debuted a capsule collection, Star Wars x Pandora, that pays homage to ultimate space saga Star Wars. The jewelry series introduces 12 new pieces: 10 charms, a bracelet, and a limited-edition collector’s charm—all made from 71% recycled metals. The charms render legendary and more recent Star Wars characters including Baby Yoda, R2-D2, Darth Vader, C-3PO as cute and compact figurines, echoing the lovably squat proportions of the Child (aka Baby Yoda) in Star Wars spin-off The Mandalorian.
Blue Nile Opening 3 Showrooms Over the Next Month
Blue Nile is opening three webrooms in the next month, the first time the Seattle-based e-tailer has opened new brick-and-mortar locations since 2017. The new showrooms include one that opened Monday at Park Meadows in Lone Tree, Colo. (near Denver); one that will open on Nov. 2 at Fashion Island in Newport Beach, Calif.; and a third slated to open on Nov. 9 at Oakbrook Center in Oakbrook, Ill. (near Chicago). In a statement, Blue Nile said that it planned to open 50 showrooms in the next three years. The plan seems slightly more scaled down than the one announced by CEO Sean Kell last year. Kell had said then the company was looking to open 50–100 showrooms in the next two years.
Jewelers of America Moves Gem Awards to July
Due to the ongoing impact of COVID-19, Jewelers of America has moved its glitzy Gem Awards ceremony from January to July. The event is now due to take place on July 16, 2021, at Cipriani 42nd Street in New York City. It will kick off a week of industry events in the city, including Jewelers of America’s annual convention, which will be held July 18–19. The Gem Awards honor the achievements of individuals and companies whose work raises the visibility of fine jewelry and watches.
Amazon Wants to Make Jeff Bezos the New King of Bling
The leader in e-commerce is looking to lure high-end brands and shoppers with its new Luxury Stores platform. It may be perfect timing. Oscar de la Renta, a brand that is a regular on red carpets and a mainstay of posh department stores, has just turned up somewhere decidedly less opulent: Amazon. Amazon.com Inc. recently launched Luxury Stores, its latest effort to become a go-to destination for designer goods. Select Prime members can access a new section of Amazon’s app that showcases $2,790 handbags and $8,990 gowns. Oscar de la Renta is among the early brands to participate, along with Altuzarra and Roland Mouret, maker of the close-fitting Galaxy dress beloved of celebrities.
Office & Leisure
Leslie’s is looking to enter the public arena. The pool and spa supplies retailer has filed a preliminary prospectus for a $100 million initial public offering. Leslie’s intends to list its common stock on the Nasdaq Global Market under the ticker symbol “LESL”. Founded in 1963, Leslie’s is the largest direct-to-consumer brand in the U.S. pool and spa care industry. It has more than 900 physical locations and multiple digital platforms. The number of shares to be offered and the price range for the proposed offering have not yet been determined. The company employs more than 5,000 associates, pool and spa care experts, and certified technicians who are passionate about empowering consumers with the knowledge, products, and solutions necessary to confidently maintain and enjoy their pools and spas.
Petco Offers Pet Owners New Subscription Option
The pandemic has triggered various shifts in the digital-first economy, and Petco has just notched another one. The company last week announced a cross between a subscription plan and health insurance for pets. Called Vital Care, the paid annual plan provides pet owners with options to meet their animals’ routine wellness needs. The program is available through Petco.com and the Petco app. Membership costs $19 per month and requires an annual commitment. The plan includes routine services and veterinary exams at 22 locations, unlimited nail trims for dogs at Petco grooming salons, and inclusion in the Petco loyalty program. Petco has worked hard to hang its brand and business model on pet care. In conjunction with the Vital Care announcement, the company also introduced the opening of its 100th in-store veterinary hospital, located in Encinitas, California. The move comes as the owners of Petco are exploring a buyout of the pet retail store that could net as much as $6 billion, according to Bloomberg.
Staples stores will take online returns – even from other retailers
Staples is joining the contactless Express Returns network. The office supplies giant will turn more than 1,000 of its stores across the U.S. into packageless dropoff points for the Express Returns offering from end-to-end return solution provider Optoro. Early in 2021, participating Staples stores will be part of a nationwide network of physical locations that accept in-store returns for online consumers. As part of the program, Staples will be able to seamlessly process in-store returns of its own products, as well as items sold by other retailers, using QR code technology from Returnly. Shoppers will receive a QR code and return dropoff instructions via an online returns portal. They then can bring the code and return item to one of the participating Staples stores, without needing to print a label or package the return. This will enable customers to skip the line while providing a safer experience for associates.
Technology & Internet
Google tries to turn YouTube into a major shopping destination
Every toy, gadget and good you see on YouTube could soon be for sale online — not on Amazon, but right on YouTube itself. The world’s largest video site recently started asking creators to use YouTube software to tag and track products featured in their clips. The data will then be linked to analytics and shopping tools from parent Google. The goal is to convert YouTube’s bounty of videos into a vast catalog of items that viewers can peruse, click on and buy directly, according to people familiar with the situation. The company is also testing a new integration with Shopify Inc. for selling items through YouTube. The moves have the potential to transform YouTube from an advertising giant into a new contender for e-commerce leaders such as Amazon.com Inc. and Alibaba Group Holding Ltd.
Apple, Google, Facebook and Amazon abused monopoly power, House report says
Lawmakers from the US House of Representatives accused Facebook, Amazon, Google and Apple of “abuses of monopoly power” in a 449-page report released Tuesday. The House Judiciary antitrust subcommittee drew its conclusions after a 16-month investigation that culminated in an hours-long hearing with Facebook’s Mark Zuckerberg, Amazon’s Jeff Bezos, Apple’s Tim Cook and Google’s Sundar Pichai in July that featured tense exchanges portending a more critical view of Big Tech. The report calls for restructuring and several other changes to rein in the companies. One recommendation tries to make it tougher for tech giants to buy up smaller companies that consolidates the industry. A “nondiscrimination requirements” suggestion aims to stop platforms from prioritizing their own products over those of rivals. The subcommittee also calls for the strengthening of antitrust laws and enforcement. The amount of power these tech companies hold has resulted in “less innovation, fewer choices for consumers, and a weakened democracy,” the report says.
Finance & Economy
As stimulus talks falter, the U.S. economy faces growth coming to a halt
A recovery that has lived by stimulus could die by stimulus, or the lack thereof, as the impasse among Washington leaders hits a new phase. With the increasing chance that no broad-based help will happen before the November election, the reality now exists that a record-breaking rebound in the third quarter will be followed by little or no growth to end 2020 and begin 2021. The ramifications are tangible and brutal, according to economists and business professionals: Billions of dollars a month siphoned out of the economy due to lowered jobless benefits, a holiday retail season shaping up to be the worst in 12 years, and an untold amount of failures from businesses that are just barely hanging on and won’t make it through what could be a coronavirus-filled and socially distanced fall and winter.
US consumer spending fell by $7.2 billion in August
U.S. consumers cut back on their borrowing in August, with credit card use dropping for a sixth straight month, reflecting caution in the midst of the pandemic-triggered recession. The Federal Reserve said that total borrowing fell by $7.2 billion after a gain of $14.7 billion in July. It was the biggest decline since a $12 billion fall in May when pandemic-driven shutdowns ground the economy to a near standstill. The weakness in August came from a $9.4 billion fall in the category that covers credit cards, the sixth decline in that area starting with a $25.4 billion drop in March. The category that covers auto loans and student loans rose by $2.2 billion in August, its fourth gain after a $5.6 billion drop in April. Consumer borrowing is closely followed for signals it can send about households’ willingness to take on more debt to support their spending, which accounts for 70% of economic activity.
