Retail

A report by PYMNTS published earlier this month states that customer policy abuse costs retailers nearly $90 billion annually.

According to data from the National Retail Federation, retail sales rose by 0.7% from August to September.

US retailers struggle to scrape up workers to fill more than 1.1 million vacancies in preparations for the upcoming holiday season.

In a world where companies are rapidly building their presence on eCommerce platforms, the market of brick-and-mortar dollar stores is still booming.

Walgreens Boots Alliance Inc. announced on September 1 that, starting from October, it will raise the minimum wages for all its employees to $15 an hour.   The pharmacy store chain’s move aimed at retaining and luring more people to work after the COVID-19 outbreak is just one more in a series of similar announcements from other US drugstores. Rival CVS Health announced it would increase the minimum wage to the same amount earlier, but the implementation will not start before July next year. With the nationwide labor shortage brought on by the pandemic, many other companies announced raising wages, including Walmart and Chipotle. “Investing in and rewarding our team members is not only the right thing to do; it’s highly important to retaining and attracting a talented workforce,” said Chief Executive Officer Roz Brewer. Currently, about half of Walgreens’s 190,000 employees are already earning $15 an hour, but the starting wage stands at $10. Walgreens will invest nearly $450 million in the wage increase in the course of the next three years. One-third of the amount will be invested in fiscal 2022.  Walgreens, CVS, Kroger, and Walmart will likely also play a key role in administering booster shots of COVID-19 vaccines. These booster shots are currently available solely to the immunocompromised. Still, if US health regulators give it the green light, the booster dose will likely be available to anyone starting September 20.  President of Kroger Health Colleen Lindholz said in an interview that dedicated workers providing vaccinations would be working in about a hundred of Kroger’s US locations.  Meanwhile, wearing masks, maintaining social distance, and using debit and credit cards for payments instead of cash are still recommended in pharmacies and other stores, even for fully vaccinated Americans. 

Simon Property Group and NorthPark Center are stepping in to help stores fill open job positions as COVID-19 restrictions loosen up, and shoppers start heading back to malls in Dallas, Texas. With the economy slowly opening up, shopping centers are chipping in to assist their tenants in finding workers by holding job fairs and posting consolidated lists of available positions on dedicated landing pages, mobile apps, and social media accounts. Simon Property Group, the largest mall operator in the United States, has been organizing virtual job fairs since the global health crisis hit as a courtesy to its tenants. The shopping mall owner has a consolidated list of hundreds of employment opportunities available nationwide. The list can be found on Simon’s website and is searchable by the retailer, state, and shopping center. Dallas’ NorthPark Center is also promoting job opportunities at the mall on its website and via other digital channels. With positions available at about 80 stores, there’s plenty of choice for job seekers. Despite these recent efforts, the US still has about 400,000 fewer jobs in retail compared to the prepandemic data. However, based on the most recent State Employment and Unemployment Summary report, the unemployment rate in Texas was 6.7% in April this year, which is nearly a half down from the state’s record-high joblessness rate of 12.9% in April 2020. While the Texas retail employment rates have almost recovered to pre-COVID levels - approximately 1,322,500 Texans were employed in retail in April in comparison with 1,324,500 in February 2020 - more than 50% of business owners in this sector say that they’re still recruiting. That’s especially good news for high school and college students who may seek out many of the retail job opportunities. There’s been a significant increase in mall traffic as more people are getting vaccinated against COVID-19. According to March data provided by Placer.ai, foot traffic in US malls went up by 86% compared with the same month last year. Although this is still below March 2019 numbers, there’s an upwards trend and people are not only browsing but also spending more.

Google announced it would be partnering with Shopify and included new details of its plans to take over a larger piece of the booming eCommerce market in the process. The deal comes together in an effort to stave off Amazon’s rising dominance as the starting point for online shopping searches. Google’s President of Commerce and Payments, Bill Ready, announced the Shopify partnership during the company’s developer conference on May 18. After the announcement, Shopify shares rose by 3%, while Google’s dropped about 1%. “When it comes to shopping, what we’re really trying to build out and support is a free and open commerce ecosystem. This is really important for consumers to have choice, and especially for small and mid-sized businesses to be able to participate in the rise of digital commerce as well,” said Bill Ready. Reintroducing the free listings incorporated into Google Shopping is at the center of the “online shopping democratization” strategy presented by Ready. These listings were initially launched in April 2020 but have since been exchanged for a pay-to-participate model. However, now that the partnership with Shopify has brought its network of around 1.7 million retailers to Google’s fold, the free listings are back. According to Ready, at least one billion shopping searches occur daily via Google, but they remain a largely untapped resource. The improvements that Google is developing could prove to be of great value for businesses that have yet to develop an online presence. The SmallBizGenius team recommends exploring ways to build an eCommerce presence for your business to take advantage of Google’s growing commercial platform. “We want to help people discover, learn about and shop for the products they love — whether those products come from a big-box retailer, new direct-to-consumer brands, or the mom-and-pop shop down the street. We're supporting an open network of retailers and shoppers to help businesses get discovered and give people more options when they're looking to buy,” said Ready about the Google Shopping platform. The platform’s design will be advantageous for Google Ads, which in 2020 earned $147 billion for Alphabet, and accounts for more than 50% of all US ad spending. Still, while Google is still at the top of the game, Amazon’s share of the ad market grew from 13.3% in 2019 to 19% in 2020 and is likely to increase further in 2021.

After rising dramatically in March, US retail sales stalled in April, despite expectations of a stimulus-check-related increase. However, as the economy reopens in the following months, an upward trend should reemerge. The US Department of Commerce said on May 14 that the unchanged retail numbers in April were still below predictions made by Reuters and Dow Jones. The new agency and stock market index forecast a jump of 1.0% and 0.8% in the sector, respectively. One of the reasons for this optimism was the $1,400 checks US households received in March as part of the $1.9 trillion COVID-19 pandemic rescue package. What’s more, pandemic household savings amount to an estimated $2.3 trillion, which should have helped lay the groundwork for spending in 2021. In March, the surge of consumer spending influenced the first quarter’s base for expected high growth in the second quarter. However, retail sales - excluding gasoline, cars, construction material, and food services - have dropped by 1.5% in April, after a 7.6% rise in March. Also known as “core retail sales,” these transactions represent the biggest component of consumer spending. This growth stop and slight drop indicate that households directed the government funds they received primarily to day-to-day needs and outstanding expenses, instead of regular shopping. The current shortage of workers slowed hiring in April, while low sales further hampered the economic recovery. Even though more than 37% of US citizens are fully vaccinated against COVID-19, the fear of the pandemic, combined with underwhelming wage offers from employers, is keeping workers at home. Here at SmallBizGenius.net, we remain optimistic that economic recovery is on the horizon. However, without proper support during recovery, such as business-friendly banking services, the question remains how the retail sector will manage this latest hitch in the recovery effort.

Florida and New York both announced plans to lift their remaining COVID-19 restrictions following the country- and state-wide drop in new cases and deaths. After that, New Jersey and Connecticut will start lifting the measures they currently have in place as well. As CNBC reported, major retail stocks spiked on Monday following these announcements. Non-essential businesses that spent most of last year closed to curb the spread of the pandemic are now likely to get back to growing. The leisure, hospitality, and clothing industries are all amidst a re-hiring effort, and this reopening push will have a significant impact on the stock market. Retail sales surged by 9.8% in March, as customers took advantage of their $1,400 stimulus checks. The clothing industry has seen some of the most significant gains, with consumers feverishly shopping for new attire to keep up with the numerous new trends popping up over the last year. Witnessing this renewed economic power in the consumer base, more and more investors are considering buying into the retail economy. As a result, apparel retailer shares have all witnessed significant upticks: Dillard’s, the department store chain, stocks gained 9.7% in value, Macy’s share price rose by 8%, Nordstrom and Urban Outfitters hit 6%, while American Eagle and Kohl’s closed up with a 5% jump. Gap share prices settled at $35.47 after a continuous rise. According to the data gathered by NPD Group, 47.5% of US consumers are planning to purchase clothing in the next 60 to 90 days. Eventually, the number of small businesses may rise as well, once the economy recuperates enough for such opportunities, which will likely be followed by an increase in bank offers to create new checking accounts. Hopefully, we will soon see a much tighter labor market and steady growth of hourly wages. On the downside, this might result in higher inflation rates. Whether this retail windfall will go one way or the other is something we’ll see before long.

Visitors are coming back to indoor malls, hopefully signalling that the worst days of the pandemic are behind us. A sample of 50 major malls across the US registered 86% more visits in March 2021 compared to the same month last year. Even though these numbers are still 24% lower than those from March 2019, mall owners are optimistic after this recent improvement.After the past year, people obviously could not wait to go out again. This return to the mall is another step in that direction, illustrating the customers’ desire to enjoy social activities, dine, and go back home with their bags full. The government stimulus checks have helped mall shops stay afloat, so now they are ready to welcome vaccinated shoppers back to their favorite form of recreation.This is yet another sign that the vaccine rollout has made an enormous impact on the overall economy in the US. Even in February, Valentines' Day resulted in a big jump in sales. At this point, most restaurant owners and retailers expect this upward trend to continue over the summer.However, the improvements are not equally distributed across retail sectors. Shoppers are currently more focused on casual clothing and accessories, less so on formal and business attire. Even though some workers have returned to the office, most people are still working from home, reducing the need for business-appropriate clothing.Due to this uptick in shopping traffic, rent collection on mall space is also recuperating. Ami Ziff, director for national retail at real-estate firm Time Equities, is the owner of eight enclosed shopping malls and several outdoor ones. He said, “Our collection rates are above 90%, that's really good news.”The first quarter of the year is usually crucial for the shopping-space owners, and while some retailers end up filing for bankruptcy protection, there are small businesses that have insured their assets for cases like this, allowing them to make rent.

Retail sales surged 9.8% in March as a fresh batch of stimulus checks fuels consumer spending. Other factors contributing to the economic recovery include the re-opening of businesses, better jobless claims, vaccination efforts, and warmer weather. According to the Commerce Department’s report, the latest gains are being led by sporting goods, clothing, bars, and restaurants. The 9.8% spike even exceeded estimates by Dow Jones of a 6.1% gain. The $1,400 stimulus checks started making their way to American households in mid-March. As part of the Covid-19 recovery program, the federal government passed the $1.9 trillion American Rescue Plan Act, with $1,400 stimulus checks driving the rise in spending following extensive closures and lockdowns. People are once again thinking about getting order checks. The software firm Cortera reported that spending was up 14.5% in March compared to last year.Mark Zandi, a chief economist from Moody Analytics, had previously said that spending increased across most retail segments, with May expected to be another record-high month. Bank of America also showed a credit card spending spike in March with a 67% increase over a seven-day period that ended on April 3. Economic tides have improved with the consumer confidence index increasing to 109.7 in March, the most substantial monthly gain since April 2003. Consumers managed to increase spending and savings, with rates expected to be at least 20% in March. Some might already be thinking about opening a small business as retail sales soar by partnering with the best banks. Meanwhile, the Labor Department reported the lowest level of new jobless claims since the start of the Covid-19 pandemic, with 576,000 people filing for unemployment insurance. This appears to have reassured consumers, who in turn boosted sales. The brighter outlook may boost other sectors and drive up the number of people getting a business checking account. 

Deliveroo stocks rose on Wednesday, the first day after the initial public offering (IPO), retail investors had the opportunity to invest in the company’s shares. On the same day, Deliveroo drivers were protesting, asking for fair living wages for their work.Deliveroo had an unsuccessful first day on the stock market. The IPO price dropped by 25% from the initial evaluation of $10.46 billion and $5.39 per share. However, the next day shares went up 2.1% to $3.95 as retail traders entering the market.Spreadex analyst Connor Campbell said: “Though Deliveroo has risen... on the first day of trading available to retail investors, it’s too soon to tell whether this is a vote of confidence in the stock. The real test for the company is going to be the coming months.”The unsuccessful stock market debut was followed up by protests, with thousands of Deliveroo riders gathering in London. According to the Independent Workers' Union of Great Britain (IWGB), the food delivery service is “the world’s most protested app-based platform.”Almost a dozen major investment funds have decided not to invest in Deliveroo because of concerns over the company’s treatment of workers.A spokesperson for the company said: “This small self-appointed union does not represent the vast majority of riders who tell us they value the total flexibility they enjoy while working with Deliveroo alongside the ability to earn over £13 an hour.” Deliveroo claims, according to an internal survey, that 88% of riders are happy with the company.The poor stock performance is also attributed to big-time investors like Aviva and Aberdeen Standard Life deciding to pass on the opportunity to invest in Deliveroo. The investors cited concerns about the gig economy working conditions and disproportional board voting rights that would favor the company’s founder, Will Shu.“One solution could be, for example, to offer part of the shares with more voting rights to those institutional investors interested in the business model of the British platform,” said the CEO of Cirdan Capital, Antonio De Negri.Investors are still wary of how companies in the gig economy structure themselves, as workers are considered independent contractors without the benefits and legal protections employees will have.