At the market
What’s going on here?
It seems every week some company is laying off more and more of its staff. Last week, Walmart announced layoffs of 200 people, Amazon said it’s cutting 9,000 jobs and Retail Dive reports more layoffs from Bed Bath & Beyond. FreightWaves’ JP Hampstead gets into the thick of it. Census Bureau numbers on seasonally unadjusted e-commerce retail sales were up 6% year over year as of Q4 2022, but remember that these numbers can benefit from inflation. Higher prices equal higher sales even if shoppers are buying less. Though, there’s a slowdown in e-commerce fulfillment center construction. Hampstead points to evidence from UPS that the company saw a drop in domestic parcel volume in Q4. Demand for cardboard boxes continues to drop and that could also signal a slow in e-commerce orders.
Doug McMillon, Walmart’s CEO, spoke on the company’s margin structure regarding a shift in shoppers’ habits.
“If you look over the last 12 months, we had a mix shift in our business from [general merchandise] to food and consumables of over 300 basis points,” McMillon said. “And we actually don’t expect that to improve this year. In fact, we expect it to get a little bit worse — not by the same magnitude, but slightly worse.”Check out Hampstead’s article for all the details, including more from Walmart and SONAR insights from your favorite supply chain software.
The trading post
(Photo: Jim Allen/FreightWaves)
Sneakerheads, roll out
Foot Locker is kicking a few hundred stores in an effort to reset the brand. CBS News reports that over 400 stores will be closing their doors as part of the shoe company’s “Lace Up” initiative. The goal is to diversify the brand, offer a broader selection of merchandise and ultimately increase total revenue to $9.5 billion by 2026.
“The sneakerhead mindset is on the rise, with sneakers becoming a favorite avenue for individual expression where newness and collectibility truly fuel demand for more,” said Foot Locker CEO Mary Dillon.
While the company will be closing mall-based stores, it plans to open more than 300 stand-alone stores. These stores will have different focuses, including community, house of play and power. Community locations will serve neighborhoods with a “passion for sneakers.” House of play locations will have more products for kids, and power stores will offer options for the whole family.
Mall stores make up 35% of the company’s revenue. The stand-alone locations are expected to bring in 50%. CBS News says sneaker sales are on the rise, with a 2.7% increase from 2021-22. This could mean that numbers will reach $216 billion by 2031.
Gigs and gadgets
(Photo: Jim Allen/FreightWaves)
Is it a threat to national security or just my favorite app?
Congressmen once again showed their lack of relevance during a hearing last week in which members questioned TikTok’s CEO, Shou Zi Chew. Because of the tech company’s ties to China, and the unknown behind its data privacy policies, the Biden administration wants the Chinese-owned company to sell or face a possible nationwide ban. Insider Today says this hearing was a chance for TikTok to squash some of those concerns. While some analysts might think Chew bit off more than he could handle, the internet sided with Team TikTok and it’s not tough to see why. Folks posted clips from the hearing in which members of Congress look, well, not smart. U.S. Rep. Buddy Carter, R-Ga., asked Chew why the app needs to know where your eyes are when it takes a photo, to which Chew replied that the only reason it needs to know where the eyes are is so when people use filters on the app, the filters can match the face. For example, if someone uses a sunglasses filter, TikTok only uses face data to match the sunglasses up. Chew said TikTok uses data just like every other social media app.
Another popular clip circling the internet is when U.S. Rep. Richard Hudson, R-N.C., questions the app’s use of Wi-Fi. A CNN article quotes Hudson asking, “So, if I have a TikTok app on my phone and my phone is on my home Wi-Fi network, does TikTok access that network?”
Um, what is the question? TikTok would use your internet. But it’s not like it’s connecting to everything else on your network and stealing your data. You don’t have to be connected to a home Wi-Fi network to use the app, you can use it anywhere. It’s not a bug in the house or a tapped phone line.
I know, I know. Technology is scary and what we don’t understand is blasphemy (sarcasm), but have these Congress members thought of asking their own grandkids how TikTok works? Maybe that would clear some things up. Let me have my TikTok in peace and let’s focus on something more important, like human rights or whatever is going on with Norfolk Southern.
This week we’re checking out the Outbound Tender Volume Index (OTVI) in Cleveland. OTVI shows tender load volumes for the U.S. and users can also look at specific regions and market granularity.
Capacity is tightening in Cleveland as outbound tender rejections are on the rise. In fact, the market has risen 389 basis points week over week for a 7.16% rejection rate.
Outbound tender volumes are rising as well. While still down 4.5% w/w, they are trending upward.
Spot rates are likely to increase coming out of Cleveland for the beginning of the week. Carriers looking for better rates might have some relief in Cleveland. It’s not quite a pot of gold, but maybe a small cushion.
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Until next time,
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