Walmart’s bottom-line blind spot (Chris Hondros/Getty Images)
Walmart’s bottom-line blind spot (Chris Hondros/Getty Images)
Hey Snackers,
Yetis are converging on Alaska, but instead of running for the hills, residents are heading to the coast. A shipping container spilled 1K+ Yeti coolers into the sea, and they're washing up as freebies on Alaskan beaches (beer not included).
Stocks tumbled again yesterday as strong econ data stoked concerns that the Fed could hike rates well into next year. Oil prices continued falling and were down for the year so far. China’s loosening of Covid restrictions was a market bright spot.
Calling a store associate… to unlock the fancy razors in the glass case. Yesterday, Walmart CEO Doug McMillon said rising theft could lead to price hikes and store closures. America’s largest retailer is dealing with a surge in shoplifting that’s “higher than what it has historically been,” McMillon added. He said a lax approach from local prosecutors could lead to closures and higher prices if the problem persists.
Walmart isn’t the only one… Organized retail theft (think: criminal rings who steal large volumes of products only to resell them) is on the rise. Last year nearly 70% of retailers reported a spike, which contributed to losses of up to $69B. It can be hard to imagine that shoplifting could significantly affect multibillion-dollar corporate giants, but the scale has become so great it’s hitting their bottom line — and losing them hundreds of millions.
Corporate L’s can come in unexpected forms… When we talk about losses, we usually look at rising costs, slowing demand, and shrinking sales. But as America’s economic situation deteriorates, inflation isn’t retailers’ only problem: crime’s starting to become evident in earnings too. Now, retailers are bulking up safety measures like locking up items and adding armed guards. The downside: a less pleasant shopping experience.
Falling flat… Pepsi’s plans to lay off hundreds of corporate staff to streamline its biz. The soda and snack giant has nearly 309K employees worldwide, and over a third are US-based. The latest cuts are aimed at its beverage biz, but will affect snacks too. FYI: Pepsi owns the four big O’s of snacking (Cheetos, Doritos, Tostitos, and Fritos). It isn’t the only one crunching down:
Party in the pantry... Despite inflated prices, Americans have continued splurging on brand-name groceries from companies like Pepsi, Kraft, and Kellogg. Pepsi’s offset higher costs by hiking prices or shrinking product sizes (cough, shrinkflation). Last quarter Pepsi doubled its annual sales forecast as snacking demand stayed strong. But recession fears are sparking concerns that consumers' label loyalty could be tested:
Pepsi wants to future-proof its biz… Tech layoffs started when things were already getting rough for the sector, but Pepsi is preparing for a snack-pocalypse that hasn’t happened yet. Other companies beyond tech are starting to cut headcount or freeze hiring, from Ford to Walmart to Beyond Meat. Economists say there could be spillover effects on more industries.
This year, Fed officials have raised rates at the fastest pace since the early 1980s
Authors of this Snacks own: shares of Apple, Microsoft, Tesla, and Walmart
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