Watching the election play out last week, many of us were reminded of and saddened by the deep divides that have become a defining feature of modern American politics. Many of us were left wondering what, if anything, can ever bring Americans closer together again. As specialists in the consumer economy, we at Consensus often look at current events through the prism of our day to day work, which led me last week to wonder: could powerful consumer brands ever be a unifying force for America? Given how polarized different groups have become today, I think that’s probably a steep order, and any move by a brand that could be seen as political is fraught with risks. Still, it is worth exploring the idea. There is a reason that I’m not the first person to have ever asked this question.
There is an intuitive nugget of truth behind the hope that brands could be unifying. If we all consume the same product and all have the same positive feeling for that product and that brand, it is something we share in common. That shared experience could, optimistically, be the basis for empathy. Again, this isn’t an original idea. Andy Warhol’s description of the universal love and accessibility of Coca-Cola in his 1975 book “The Philosophy of Andy Warhol” was the inspiration for Coca-Cola’s 2019 Super Bowl commercial entitled “A Coke is a Coke.” In the ad, characters from all races, genders, and walks of life came together over ice-cold Coke. Similarly, economist Thomas Friedman in the 1990’s proposed the Golden Arches Theory of Conflict Prevention, which held that no two countries that both have McDonald’s franchises have ever gone to war. As one final example, Michael Jordan once, when pressed to support a Democratic candidate in an election, declined, saying “Republicans buy sneakers too.”
However, how much do we really share in common when it comes to what brands and products we consume? Are there many brands sufficiently iconic and powerful to unite us? A Wall Street Journal article asked this question in the wake of the 2016 election and found that preferences in brands and products were actually quite different in counties across the country that were carried by Hillary Clinton versus those won by Donald Trump. Favored restaurants, cell phone brands, and (obviously) online news media sources were very different between the two groups – differences that went beyond geography.
Not only is it difficult to find brands with the universal appeal necessary to unite, but there also are risks to even trying. Sensitivity to all things political today is high. For instance, The Gap was lambasted online last week for positing a picture of a half-red, half-blue sweatshirt on social media in an attempt to endorse positive civics and unity. Critics argued that national tensions were too high for an apparel brand to insert itself into the discussion and trivialize political divisions with a unification-sweatshirt. Ironically, critics on both the right and the left seemed to universally hate the ad. Similarly, a 2017 Pepsi commercial starring Kendall Jenner infamously flopped and was pulled from the airwaves when the ad, which depicted Ms. Jenner bringing together protesters and nearby policemen with a can of Pepsi, was panned for trivializing the Black Lives Matters movement.
Still, it is a tempting idea that folks around the country might share common ground about certain consumer brands and experiences. Many of us favor diametrically opposed political narratives, but we can all agree that a Coke is a Coke. It is risky, but at certain times and in certain ways, brands can try to bring us together. They probably shouldn’t expect such efforts to be good for their bottom lines, but, more nobly, it might be good for the country.
Headline of the Week
Nestle acquires Freshly for $950 million
Nestle SA has acquired US meals group Freshly Inc. in a $950 million deal. Launched in 2015, Freshly’s subscription-based model offers meal plans to consumers with a rotating menu of better-for-you dishes, including gluten-free and low sugar versions of classic comfort foods. It currently ships meals to more than one million customers per week and is forecasted to reach $430 million in sales in 2020. The deal brings together Nestle’s research and development capabilities with Freshly’s specialized consumer analytics and distribution platform, said Steve Presley, chairman and chief executive officer of Nestle USA. Nestle in 2017 acquired a 16% stake in Freshly to evaluate and test the direct-to-consumer prepared meal channel. The investment helped Freshly expand its service nationwide with a new East Coast test kitchen and distribution center.
Apparel & Footwear
Clarks Forms Partnership with LionRock Capital
Clarks has reached an agreement for Asian private equity firm LionRock Capital to acquire a majority stake in the historic shoe brand as part of a £100m investment. The deal, which also involves the Clark family remaining invested, is subject to shareholder approval and a CVA for Clarks’ UK and Republic of Ireland businesses in relation to its store portfolio. The investment is designed to position Clarks for future long-term growth and support its ‘Made to Last’ strategy to revitalise the footwear brand as it enters its third century. The business traces its history back to 1825, when brothers James and Cyrus Clark made a slipper from sheepskin off-cuts. LionRock, which has a track record of investing in a range of consumer companies, will help grow the Clarks brand globally, particularly in China and across the rest of Asia Pacific. Shareholders will be asked to vote on the proposed transaction in December.
Chico’s shores up finances, digital operations amid store closures
Chico’s FAS last week said in a press release that its amended and extended $300 million senior secured credit facility has closed, consisting of a $285 million asset-based revolving credit agreement and a $15 million “first-in last-out” term loan, maturing in 2025. The company, which runs the Chico’s, White House Black Market and Soma brands, last week also announced a “digital transformation” to boost personalization and marketing, and introduced a buy now, pay later option through Afterpay, according to another press release. Both announcements come amid intensified scrutiny of store profitability. Executives in August said they enlisted A&G Real Estate Partners to restructure its lease portfolio. The company has permanently closed 28 stores this year and anticipates closing another 25 to 50.
Capri Holdings Reports Gain In Q2 Thanks To China
On November 5, Capri Holdings, which is the parent company of Michael Kors, Versace, and Jimmy Choo, revealed its 2021 second-quarter fiscal results. The global fashion luxury group beat quarterly revenue and profit estimates, thanks to strong demand for its luxury apparel and accessories in China, as well as surging online sales, which sent shares upward by 13 percent. Capri announced a profit for its second quarter, which was an increase over the same period last year. Total net income was $122 million. Sales in China were positive across the conglomerate’s three brands in the second quarter, echoing recovery trends that were also reported by Coach owner Tapestry Inc, Europe’s LVMH, and Hermès. Versace, in particular, has seen a strong rebound in demand, with the Italian label recording retail sales growth globally. Meanwhile, e-commerce sales for the group increased by 60 percent during the quarter, year-on-year.
Canada Goose Returns to Profitability
Canada Goose Holdings is back in the black and looking to build — through the colder months and the coronavirus. The Toronto-based parka maker turned second-quarter profit of 12.5 million Canadian dollars — down from earnings of 58 million Canadian dollars a year earlier, but also a big bounceback from losses of 50.1 million Canadian dollars in the first quarter, when stores were locked down to social distance. Revenues for the quarter ended Sept. 27 fell 33.7 percent to 194.8 million Canadian dollars.
But Dani Reiss, president and chief executive officer, told WWD he was “very happy with the quarter” and said the cold-weather company’s business was “accelerating right now when it matters most” and that global e-commerce revenues were up 10 percent. Reiss also noted that the brand’s Mainland China business has returned to pre-COVID levels with direct to consumer revenues in the country up over 30 percent.
Primark owner to take £375m sales hit from 2nd Covid lockdown
The parent company of Primark has said it expects to take a £375 million hit from the loss of sales amid the latest enforced closures amid the second wave of the Covid-19 pandemic. Associated British Foods said around 57 per cent of selling space in its Primark stores will be temporarily closed if Parliament approves plans to shut non-essential shops for a month from Thursday this week. Prime Minister Boris Johnson has confirmed that fashion retailers would be among those required to close from November 5 until December 2 as part of the second lockdown in England aimed at curbing the spread of the virus. AB Foods said all Primark stores in the Republic of Ireland, France, Belgium, Wales, Catalonia in Spain and Slovenia were already temporarily closed, representing 19 per cent of selling space. It also told investors that its trading hours have been restricted in a number of other key markets. It also told shareholders that all orders placed with suppliers will be honoured.
Athletic & Sporting Goods
Montreal’s Dorel strikes deal to be taken private by Cerberus Capital, founding family
The controlling shareholders of Dorel Industries Inc. have made a non-binding proposal to take the bicycle and baby products maker private after several rocky years in which the Canadian company’s once high-flying shares tumbled to near penny-stock status. Montreal-based Dorel said it has reached an agreement in principle to be taken private by a group led by U.S. private equity giant Cerberus Capital Management and the Schwartz family, which controls the company through a special class of multiple-voting shares. Under the terms of the proposed transaction, which values Dorel at about $470 million, the buyers would pay $14.50 for each share the family does not already hold. Dorel operates three separate business arms that are each very different. Its sports unit controls bike brands such as Cannondale and Schwinn, while its juvenile unit makes car seats, strollers, toys and other children’s products under brands including Maxi-Cosi and Quinny. The third division makes home furniture.
Supercar maker McLaren takes on Nike and Adidas by launching high-end sportswear range
Supercar maker McLaren Automotive is to go head-to-head with Nike and Adidas by launching its first range of high-end sportswear. While some fashionistas splash out as much as $2 million to own a piece of high-performance McLaren engineering, athletes will soon be able to spend a more conservative £295 ($380) to sport the marque on a quilted soft-shell jacket. Bonded seams, a sonic-welded construction and heat-transferred interior components are features you might expect on a vehicle, but these are components of its performance tops and outerwear. McLaren said it had teamed up with Castore, a premium sportswear brand to debut the first “technical male sportswear collection.”
Cosmetics & Pharmacy
Estée Lauder Third-Quarter Profit Beats Estimates
Estée Lauder Cos Inc. beat Wall Street estimates for third-quarter profit on Friday, as the M.A.C owner benefited from online sales amid widespread lockdowns imposed to curb the spread of the novel coronavirus. The La Mer cosmetics maker said it expected most of its retail stores to be closed for most of the current quarter and warned that global prestige beauty products would be “adversely impacted.” Cosmetics companies dealing with the fallout from the closure of department stores, airport duty free shops and beauty parlors due to Covid-19 led lockdowns have been ramping up their online business. Estée Lauder too has been tapping in on its massive online presence and saw a double-digit rise in global online sales as more consumers flocked to websites. Net sales fell 10.7 percent to $3.35 billion. Excluding one-time items, the company earned 85 cents per share, beating the estimate of 73 cents.
NPD Q3 Numbers Show Signs of U.S. Prestige Beauty Recovery
U.S. prestige beauty sales are showing smaller declines than earlier in 2020, new data from The NPD Group shows. The NPD Group published its findings for the third quarter in the U. S. prestige beauty market, and it shows signs of recovery. Overall sales are down 17 percent to $3.7 billion, a smaller fall than the 36 percent drop in the second quarter of this year. Hair showed the most traction at 11 percent for the quarter, with sales at $232.5 million. It is also the smallest of the four categories The NPD Group included in its findings. Hair masks, hair treatments and hair color gained the most traction among consumers. Fragrance also rebounded, showing 1 percent growth from last year, with sales at $826.2 million. Home scents played a hand in the increase, which grew 21 percent, largely bolstered by candle sales.
Discounters & Department Stores
Dollar General announces single-day holiday sales event
Dollar General will have a pre-holiday sales event on Nov. 13 with specials across its nearly 17,000 stores and online, the retailer recently announced. The retailer’s discounts span across various categories, including beauty, toys, holiday decorations, baking essentials and crafts, per the company announcement. The company is also offering deals on select items such as Lego Toys, electronics and children’s books. The pre-sales event will only last for one day, the company said.
Bankrupt Stein Mart has a $4M bid for its IP
Stein Mart has a $4 million bid for its intellectual property that would set the baseline for an auction, according to a court filing. The stalking horse bidder, a Delaware corporation formed in August called “Stein Mart Online, Inc.,” lists as its CEO Alex Mehr, one of the founders of Retail Ecommerce Ventures (REV). Mehr and Tai Lopez, also a REV founder, are both listed as contacts for the company in court papers. Included in the retailer’s IP sale are its domain names, trademarks, customer files, vendor information, marketing emails, social media handles and other assets.
Walmart ends aisle-scanning robot contract
Walmart’s contract has ended with Bossa Nova Robotics, the retailer confirmed to Retail Dive, effectively ending the retailer’s plans to use roaming robots to keep track of shelf inventory. After teaming up with the robotics company five years ago, Walmart planned to continue expanding Bossa Nova’s bots to 1,000 stores, up from 500 currently. Walmart is “trying other ideas” at stores with plans to keep testing new technologies and focus on its own processes and applications for inventory management, a company spokesperson wrote in an email. Walmart and Bossa Nova’s split comes at a time when retailers have increasingly turned to automated technology in stores, from tracking inventory to cleaning floors.
Emerging Consumer Companies
Beauty sampling Brand IPSY to acquire BoxyCharm
Ipsy, the San Mateo-based beauty brand, has agreed to acquire BoxyCharm, its Miami-based competitor. Together, the companies will create a combined business with more than 4.3 million subscribers and $1 billion in revenue this year. Ipsy and BoxyCharm will operate as separate brands in a merged company called BFA Industries, short for “Beauty For All.” The deal valued BoxyCharm at around $500 million, and was paid for in mostly stock. Ipsy Chief Executive Officer Marcelo Camberos, who will lead the new company, said it could go public in the next 18 months.
Quinn, natural snack food brand, raises Series D from Hershey
Quinn, a natural foods snack company known for reimagining classic snacks, announced it has closed additional Series D funding including an undisclosed minority investment, from The Hershey Company as well as existing investors. The funding will support new distribution and product innovation. Founded in 2010, Quinn strives to use high quality, real ingredients backed with a commitment to support agriculture and food transparency. Today, Quinn is only found in 7,500 stores, and will take advantage of Hershey’s distribution capabilities.
Grocery & Restaurants
TreeHouse to acquire some US pasta brands from Riviana Foods
TreeHouse Foods, Inc. will acquire a majority of the US branded pasta business of Riviana Foods, Houston, Texas, for $242.5 million. Several regional pasta brands will be a part of the transaction, but it will not include Riviana’s Ronzoni national brand. Regional pasta brands included in the transaction include Skinner, No Yolks, American Beauty, Creamette, San Giorgio, Prince and Light ‘n Fluffy, Mrs. Weiss’, Wacky Mac, P&R Procino-Rossi and New Mill. The businesses to be acquired generated approximately $200 million in sales during the 12-month period ended June 30.
Flynn Restaurant Group bids $816 million to buy NPC International out of bankruptcy
Flynn Restaurant Group LP has bid to buy NPC International Inc. out of bankruptcy for $816 million, through subsidiary companies, NPC said Thursday. The deal, in which Flynn has applied to be NPC’s stalking horse, or initial, bidder, must be approved by the U.S Bankruptcy Court for the Southern District of Texas, where NPC filed for Chapter 11 protection this summer. It would more than double the number of restaurants operated by Flynn, which is already the largest franchise group in the country in terms of sales. A court hearing to approve Flynn as the stalking horse bidder is scheduled to take place on Nov. 13. San Francisco-based Flynn Restaurant Group, which is headed up by founder and CEO Greg Flynn, currently operates more than 1,200 restaurants under four brands: Applebee’s, Taco Bell, Panera and Arby’s. It has agreed to purchase “substantially all” of NPC’s assets, which includes 1,300 Wendy’s and Pizza Hut restaurants as well as shared services. NPC had more than 1,600 locations at the time of its bankruptcy filing.
Home & Road
Wayfair posts 2nd consecutive profitable quarter
Wayfair posted a profit for its second consecutive quarter after the company reported a net income of $173.2 million for the quarter ended Sept. 30, compared with a $272.9 million loss in the prior-year third quarter. Gross profit for the third quarter came in at $1.1 billion or 29.9% of total net revenue, compared with $540 million in the third quarter of last year. Wayfair also reported diluted earnings per share of $1.67 for the third quarter compared with a net loss of $2.94 for last year’s third quarter. Total net revenue increased $1.5 billion to $3.8 billion up 66.5% year-over-year. At the end of the third quarter, cash, cash equivalents and short- and long-term investments totaled $2.6 billion. The company said the number of active customers in its direct retail business reached 28.8 million by the end of the third quarter, which is an increase of 50.9% over the previous year. And, repeat customers placed 11.3 million orders in the third quarter of 2020, an increase of 84.4% year-over-year.
IKEA owner readies for second wave after stay-at-home shoppers boost profits
Profits at the IKEA furniture brand’s owner grew in the 12 months through August as shoppers kept at home by the pandemic spent money saved by not going on holiday on furnishing, and September and October sales rose. Inter IKEA Group, a franchisor to store owners, said on Tuesday its pretax profit grew 13% to 2.0 billion euros ($2.4 billion), helped also by lower raw material prices. In the previous fiscal year, profit growth was 5%. The company, which generates the bulk of revenues from sales of goods to its franchisees, said in September retailers’ sales shrank 4% to 39.6 billion euros because of COVID-19 and temporary store closures, but it saw sales growing this year. Inter IKEA Chief Financial Officer Martin van Dam told Reuters that sales in September and October had risen year-on-year, after “a fantastic pick-up” in the June-August period. Demand grew early on in the pandemic for office furniture, food jars and cooking products, and has stayed strong for storage.
Franchise Group to acquire FFO Home
Franchise Group Inc., owners of American Freight and Buddy’s Home Furnishings, has signed an agreement to acquire FFO Home, a furniture retailer with 31 stores in Arkansas, Indiana, Kentucky, Missouri and Oklahoma, subject to a Chapter 11 bankruptcy process. As part of the agreement, FFO has filed voluntary petitions for Chapter 11 relief in the U.S. District Court for the District of Delaware. FFO will continue normal business operations throughout the sale process until the transaction closes. In addition, Franchise Group is providing FFO with a debtor-in-possession loan as part of its bankruptcy proceedings. The transaction is expected to close by the end of 2020, at which time Franchise Group plans to merge and rebrand the FFO stores with its American Freight business. “FFO provides us a great opportunity to expand our store footprint and growth at American Freight,” said Brian Kahn, CEO of Franchise Group.
L&P sees Q3 increases in EBIT, EBITDA and EPS
Leggett & Platt reported 3% dip in third quarter sales, despite year-over-year sales growth in several sectors including home furniture and fabric converting. Still, the company reported a quarterly record third-quarter earnings per share of 77 cents, up 3 cents per share over the third quarter in 2019. For the quarter ended Sept.30, its bedding products trade sales were down 2%, partly due to exiting the Fashion Bed business, and its furniture, flooring and textile products trade sales were up 1%. The company noted that strong demand in fabric converting, geo components and home furniture “was more than offset by weak demand in work furniture and flooring products’ hospitality business.” Third quarter sales were $1.208 billion, down 3% vs. the year-ago period.
Jewelry & Luxury
E-Commerce Site Dora Maar Lets You Shop Influencers’ Closets
It’s fun to shop resale jewelry, apparel, and accessories on the RealReal, Poshmark, and other secondhand designer sites. But you never know who’s actually consigning the items—which, depending on your worldview, may not matter. But consumers who enthusiastically follow influencer culture can now shop the closets of the style stars they emulate. Dora Maar, a new e-commerce site launched by Lauren Wilson, who’s done stints in the marketing departments of Christie’s and Moda Operandi, is a luxury consignment platform based in New York City that collaborates with influencers to consign pieces plucked from their own wardrobes.
The Argyle Diamond Mine Is Shutting Down
The Argyle diamond mine had its last day of mining on Tuesday, after making a significant contribution to the industry’s history during its 37 years of operation. The mine, in Perth, Australia, fueled the rise of the Indian cutting sector, “democratized” diamonds by producing gems that could be sold at lower price points, helped bring about the end of the De Beers cartel, and gave the world an amazing amount of eye-popping pinks.
More Retailers Selling Lab-Grown Diamonds, Survey Finds
About 38% of independent jewelers are now carrying lab-grown diamonds, according to a new survey by MVI Marketing for the International Grown Diamond Association and InStore magazine. Consumer awareness of man-made gems is also rising: The company’s MVEye survey of more than 1,000 jewelry consumers found that 80% were aware of lab-grown diamonds. By contrast, in 2018, 58% had heard of the category. A decade ago, less than 10% had. Some 8% said they owned jewelry with lab-grown diamonds, up from 6% in 2018.
How luxury brands are tapping into consignment — and winning
Luxury designer brands are becoming thriftier. As consignment shopping thrives during the coronavirus-driven e-commerce boom and consumer demand shifts toward sustainability, high-end labels are tapping into secondhand markets. Most recently, Gucci announced a multi-prong partnership with The RealReal, featuring an exclusive Gucci e-shop of consigned products in addition to merchandise fetched directly from the Italian fashion house. Burberry and Stella McCartney have also collaborated with the luxury resale platform.
Office & Leisure
Sports leagues are turning to technology to bring fans closer to the game, even if they’re physically distant. Facebook is exploring how better to mimic the National Basketball Association’s courtside seat in virtual reality. Major League Baseball is enhancing its stats to prepare more augmented reality offerings. The National Hockey League and Major League Soccer are both working on upgrading their VR and AR offerings, too. But it’s not clear whether consumers are ready to convert to a market that, before the pandemic, researchers estimated could help grow the global economy by $1.5 trillion. To keep fans engaged during the pandemic, sports leagues used more digital offerings, like virtual courtside seats and partnered with social media companies like Snapchat and Facebook to create AR experiences. The experiences helped keep fans engaged, but sports clubs eventually want to make money from those experiences, especially VR, which totally immerses viewers in a 360-degree computer-generated scene.
Sony’s new PS5 game console won’t be sold in stores on Nov. 12 release day
Sony said on Thursday that its new PS5 game console, which will compete directly with Microsoft’s new Xbox Series X and Xbox Series S, will not be sold in retail stores on launch day due to the spread of coronavirus. Game console launches typically lead to long lines of consumers waiting to buy the latest model. Instead, customers can buy the console on Nov. 12 online or from Sony’s retail partners. Most units have been sold out ahead of launch day, however, and it’s unclear how many will be in stock or when they’ll be available to ship. It’s also unclear when the console might eventually arrive in retail stores. Sony said customers who have already ordered the console for in-store pickup can do so at the retailer, so long as they schedule an appointment ahead of time and follow the retailer’s safety protocols.
Pet Valu to wind down U.S. operations, joining list of retailers shuttered by pandemic
Pet Valu has joined the list of retailers permanently shuttered during the coronavirus pandemic. The specialty retailer of pet food and supplies said Wednesday that it will wind down operations at its Pennsylvania headquarters and close all of its 358 stores and warehouses across the U.S. It said closing sales will begin in the next few days. Jamie Gould, Pet Valu’s recently appointed chief restructuring officer, said in a news release that the company’s stores “have been significantly impacted by the protracted COVID-19-related restrictions.” “After a thorough review of all available alternatives, we made the difficult but necessary decision to commence this orderly wind down,” she said. The company is owned by private equity firm Roark Capital Group. Markham, Ontario-based Pet Valu Canada is a separate, profitable company and will continue to operate its stores and website.
Mattel CEO: Barbie, Hot Wheels, ‘are resonating’ with consumers during pandemic
Mattel CEO Ynon Kreiz has brought stability — and importantly for investors, profitability — to a toymaker that was struggling for direction before his arrival in April 2018. Kreiz — who has an extensive content creation background being the former CEO of Maker Studios (sold to Disney in 2014) — says investors should get used to both of those things when thinking about the maker of Barbie dolls and Hot Wheels cars. “In many ways, it has been a journey,” Kreiz tells Yahoo Finance. “This is not a one-off. And with the momentum we are seeing, growing market share, growing our catalog, growing the portfolio as a whole, achieving growth in every region in constant currency and broadly across our portfolio in the third quarter, it’s very telling.” Indeed it is telling. The turnaround at Mattel continued to play out in the third quarter as it sold large volumes of Barbies, board games, action figures and plush Baby Yoda dolls to a quarantined world of kids.
Inside Chewy’s first automated fulfillment center
Chewy’s fulfillment operation is in the early stages of a 180-degree turn. After years of research and searching, vetting and testing, the pet supplies e-tailer opened its first automated fulfillment center in Archbald, Pennsylvania, last month. The plan has been in the works for years, Mike Gilbert, Chewy’s vice president of operations, said in October, the day after launching the inbound operations of the automated facility. “Growth curves that were supposed to play out over years have been compressed into quarters and even months,” said CEO Sumit Singh on an earnings call in September, touting the company’s investment in technology and talent to handle the growth. Chewy’s sales have grown 47% YoY for the last two quarters. Gilbert expects a 45% improvement in operational efficiency in terms of cycle time between a customer order submission and a box landing on a truck.
Technology & Internet
Alibaba’s sales slow yet still rise 30%
Alibaba Group Holding Ltd.’s revenue grew at its slowest pace on record for a September quarter, underscoring how the ecommerce giant’s post-pandemic rebound is starting to plateau. Asia’s largest corporation reported a 30% rise in sales in the September quarter, in line with expectations but down a tad from the previous three months. That did little to reassure investors worried about the tightening regulatory scrutiny that forced Jack Ma’s Ant Group Co. to call off its $35 billion IPO. CEO Daniel Zhang would only say it’s evaluating the impact on its business from more stringent rules governing its 32%-owned sister company. The company enjoys a close relationship with Ant, whose Alipay mobile wallet anchors the majority of Alibaba’s ecommerce transactions and whose microlending services drive consumption.
Amazon’s share of US online retail revenue dips slightly in Q3
It’s a sign of how much online shopping has surged during the COVID-19 pandemic that Amazon.com Inc. could turn in blockbuster results in the third quarter of 2020 and still capture a slightly smaller percentage of U.S. online retail sales to put into its bank account. Amazon’s revenue from U.S. consumers’ web purchases amounted to 23.1% of U.S. online retail sales in the third quarter of 2020, down a tad from 23.6% in the second quarter, according to an exclusive Digital Commerce 360 analysis of Amazon’s Q3 report and estimate of U.S. ecommerce sales for Q3. Amazon’s share of U.S. online retail spiked at 26.0% in the first quarter of 2020, likely because many consumers turned to Amazon to stock up on essentials as brick-and-mortar stores closed in March due to COVID-19. Amazon’s percentage of e-retail revenue has slipped each quarter since, a sign of gains made by other big competitors.
Finance & Economy
U.S. productivity increases solidly in third quarter
U.S. worker productivity increased strongly in the third quarter, depressing unit labor costs, suggesting wage inflation could remain tame as the economy recovers from the pandemic. The Labor Department said that nonfarm productivity, which measures hourly output per worker, increased at a 4.9% annualized rate last quarter. Data for the second quarter was revised up to show productivity increasing at a 10.6% rate instead of a 10.1% pace as previously reported. That was the fastest since the first quarter of 1971. Robust productivity growth was flagged by data last week showing the economy expanded at a historic 33.1% annualized rate in the July-September quarter, thanks to more than $3 trillion in government pandemic relief for businesses and workers.
US trade deficit falls to $63.9 billion in September
The U.S. trade deficit fell in September after hitting a 14-year high the previous month as exports outpaced imports. The gap between what the U.S. sells and what it buys abroad fell to $63.9 billion in September, a decline of 4.7%, from a $67 billion deficit in August, the Commerce Department reported. September exports rose 2.6% to $176.4 billion, pushed higher by the food and beverage category, where shipments worth $12.9 billion were the highest since July of 2012. Soybean exports rose 63% in September. Year to date, the goods and services deficit has jumped $38.5 billion, or 8.6%, to $485.6 billion. The total deficit for goods and services for the same period in 2019 was $447.1 billion.
