U.S. retailers on Friday reported record holiday sales numbers despite grappling with surging COVID-19 cases, rising prices, supply chain issues and worker shortages, The Hill reported. Retail sales totaled roughly $887 billion in November and December, a record figure that represents a 14.1 percent increase over 2020, according to an analysis from the National Retail Federation (NRF). NRF credited the strong sales to consumers’ increased wages and high personal savings. Clothing stores saw the largest increase in sales, up 33.1 percent, while sales at sporting goods stores and general merchandise stores increased by 20.9 percent and 15.2 percent, respectively. The figures, which are based on U.S. Census Bureau data, exclude car dealers, gas stations and restaurants, which were among the businesses hardest hit by the omicron surge in December. While overall holiday sales exceeded expectations, the Commerce Department said Friday that retail sales fell by 1.9 percent from November to December after analysts predicted that sales would remain flat.
U.S. restaurants stayed afloat during the pandemic thanks to outdoor heaters, elaborate patio spaces, and to-go drinks. But the creative workarounds weren’t enough to stem the losses from the recent omicron-fueled surge of Covid cases, Bloomberg News reported. Sales decreased at 98% of restaurants across the country in December, according to a poll of 1,169 restaurants conducted by the Independent Restaurant Coalition. Sales dropped by at least half at 58% of those surveyed, while 80% of restaurant owners said omicron impacted their operating hours. U.S. restaurants stayed afloat during the pandemic thanks to outdoor heaters, elaborate patio spaces, and to-go drinks. But the creative workarounds weren’t enough to stem the losses from the recent omicron-fueled surge of Covid cases. Sales decreased at 98% of restaurants across the country in December, according to a poll of 1,169 restaurants conducted by the Independent Restaurant Coalition. Sales dropped by at least half at 58% of those surveyed, while 80% of restaurant owners said omicron impacted their operating hours. The sharp hit to restaurants nationwide demonstrates the pandemic’s continuing blow to the industry, despite national efforts to avoid economic pitfalls from shutdowns this winter. The impact is particularly challenging for businesses that didn’t get funding from the Restaurant Revitalization Fund, a $28.6 billion federal effort to rescue struggling businesses that was part of the American Rescue Fund. Four out of five businesses that did not receive grants said they were in danger of permanently closing in 2022. The fund provided as much as $5 million per location for restaurant owners — or as much as $10 million per business — who could demonstrate their businesses experienced significant financial distress during the pandemic.
Companies will test whether the U.S. can regain some of the manufacturing output it ceded in recent decades to China and other countries, the New York Times reported. That question has been contentious among workers whose jobs were lost to globalization. But with the supply-chain snarls resulting from the coronavirus pandemic, it has become intensely tangible from the consumer viewpoint as well. Some corporate giants are keen on testing that premise, if not for finished goods then certainly for essential parts. General Motors disclosed in December that it was considering spending upward of $4 billion to expand electric vehicle and battery production in Michigan. Just days later, Toyota announced plans for a $1.3 billion battery plant in North Carolina that will employ 1,750 people.
Holiday sales rose at the fastest pace in 17 years, even as shoppers grappled with higher prices, product shortages and a raging new COVID-19 variant in the last few weeks of the season, according to one spending measure, the Associated Press reported. Mastercard SpendingPulse, which tracks all kinds of payments including cash and debit cards, reported Sunday that holiday sales had risen 8.5% from a year earlier. Mastercard SpendingPulse had expected an 8.8% increase. The results, which covered Nov. 1 through Dec. 24, were fueled by purchases of clothing and jewelry. Holiday sales were up 10.7% compared with the pre-pandemic 2019 holiday period. By category, clothing rose 47%, jewelry 32%, electronics 16%. Online sales were up 11% from a year ago and 61% from 2019. Department stores registered a 21% increase over 2020.
Four years after filing for chapter 11 bankruptcy protection and three years since closing its 735 stores, the brand that Charles Lazarus started in 1957 has been raised from the dead in time for last-minute holiday shopping, the New York Times reported. Its first new store and the mall, in East Rutherford, N.J., are betting on the strength of nostalgia’s grip, hoping that a familiar retail name will attract shoppers who are increasingly accustomed to doing their buying online. Toys “R” Us is planning to follow the opening of the American Dream store with hundreds of mini locations inside Macy’s stores over the next year. Yehuda Shmidman is the chief executive officer of WHP Global, the brand acquisition and management firm that acquired a controlling stake in the parent company of Toys “R” Us in March. WHP, whose investors include Oaktree Capital Management, is one of several companies that buy struggling marquee brands and then look to capitalize on the familiarity of the brands’ names by licensing them. Its other brands include Anne Klein and Joseph Abboud. The collapse of Toys “R” Us in 2018 was painful not only to its loyal customers but also to its more than 30,000 employees, who lost their jobs. The retailer became a case study in a private equity deal gone wrong, as the company’s investors loaded it up with billions in debt and drove it into bankruptcy. While lawyers and advisers collected millions in fees during the bankruptcy process, its former workers struggled to get severance. Reminders of the brand’s tumble into bankruptcy still exist nearby. Less than a mile from American Dream, a Toys “R” Us sign remains on the display board visible to drivers on Route 3 at the Harmon Meadow shopping complex. Lauryn Dankin’s family called the closure of the local Toys “R” Us in Watchung, N.J., “one of the darkest days in our family.” Paramus also had one of the most recent locations; a smaller, “reimagined” store opened there in November 2019 only to close in January 2021. Whether good memories of shopping experiences past is enough to keep this version of Toys “R” Us going remains to be seen. “We didn’t create the brand, and we’re not changing it,” Mr. Shmidman said. “All we’re doing is bringing it back to Americans who have been yearning for it.”
As rising inflation threatens his presidency, President Biden is turning to the federal government’s antitrust authorities to try to tame red-hot price increases that his administration believes are partly driven by a lack of corporate competition, the New York Times reported. Biden has prodded the Agriculture Department to investigate large meatpackers that control a significant share of poultry and pork markets, accusing them of raising prices, underpaying farmers — and tripling their profit margins during the pandemic. As gas prices surged, he publicly encouraged the Federal Trade Commission to investigate accusations that large oil companies had artificially inflated prices, behavior that the administration says continued even after global oil prices began to fall in recent weeks. The push has extended to little-known agencies, like the Federal Maritime Commission, which the president has urged to search for price gouging by large shipping companies at the heart of the supply chain. The turn to antitrust levers stems from Mr. Biden’s belief that rising levels of corporate concentration in the U.S. economy have empowered a few large players in each industry to raise prices higher than a more competitive market would allow. Corporate culpability for rising prices remains unclear. Inflation is at a 40-year high because of pandemic-related factors such as broken supply chains and high demand for goods from consumers still flush with government-provided cash. But as the price increases have spread across sectors, including food and gasoline, the administration has come under increasing pressure to find ways to respond.
Rite Aid is closing 63 of its stores, a process that began in November and is expected to add $25 million in annual EBITDA, the company said in its latest earnings release, Retail Dive reported. The closures are part of a process aimed at cutting costs, adding profits and ensuring Rite Aid has "a healthy foundation to grow from, with the right stores in the right locations, for the communities it serves and for our business," Rite Aid CEO and President Heyward Donigan said in a statement. Rite Aid added that it will continue evaluating its footprint over the next several months months and expects the closure count to increase as it finalizes its plans. Rite Aid has struggled for years now to get its financial affairs in order as it competes against its larger drugstore rivals. It hasn't posted positive net income from continuing operations since the fiscal year covering 2016. During the pandemic, when drugstores became a convenient shopping venue and critical health service providers, those losses shrunk, but still remained above $100 million.
Sean “Diddy” Combs agreed to pay $7.5 million to buy back the bankrupt fashion brand he founded in 1998 after winning a court supervised auction, Bloomberg News reported. “Seeing how streetwear has evolved to rewrite the rules of fashion and impact culture across categories, I’m ready to reclaim ownership of the brand, build a team of visionary designers and global partners to write the next chapter of Sean John’s legacy,” Combs said in an emailed statement. The label is currently owned by the bankrupt brand manager GBG USA Inc. GBG made 85% of its money by selling clothing and footwear through retailers like Costco, TJ Maxx and Nordstrom, according to court documents. GBG had sold most of its other assets before the Sean John auction. Combs, bidding through an entity called SLC Fashion, agreed to pay $51,000 more than the next highest offer, Before the sale can close, GBG must get approval from the judge overseeing its bankruptcy in Manhattan.
