Price hikes have helped companies drive strong Q1 earnings, according to analysts. So how elastic are retail prices? Q2 earnings could give us the answer.
FINANCE
Primark (UK) has said it will have to raise prices on its autumn and winter ranges as it is no longer able to offset cost increases with savings.
- Primark sales increased 59% to £3.54 billion
- Pay at Primark went up 12% in April
- Despite rising cost pressures, operating profit margins returned to pre-Covid levels as shoppers flooded back to stores.
“Inflationary pressures are such that we are unable to offset them all with cost savings, and so Primark will implement selective price increases across some of the autumn and winter stock.” – George Weston, CEO, Associated British Foods (Primark’s parent)
Simon Property (USA) and Brookfield Asset Management (USA) have made an offer to acquire Kohl’s (USA) which would value the department store chain at some $8.6 billion. Simon and Brookfield, both mall owners, purchased JCPenney (USA) in 2020. Upon acquiring the retailer, they plan to cut costs at Kohl’s by $1 billion during the next three years, according to a New York Post report.
Amazon (USA) Q1 first party (1P) sales fell 3% year-on-year due to an unprecedented 44% year-on-year surge the same quarter in 2021. Combined growth over the two years averages at 18% per year.
Walmart (USA) has launched private label activewear brand Love & Sports. The first collection will include 121 women’s activewear and swim items priced from $12-$42.
ThirdLove (USA) has acquired Kit Undergarments, a brand that targets younger consumers. Kit’s prices range from $18-$55.
RETAIL
Where There’s Music, There’s Opportunities for Merch Sales
The resurgence of ‘real life’ as pandemic restrictions are lifted is creating opportunities to sell a wide range of fashion products, in traditional retail stores – but also lots of other places, too.
Music festivals are already benefiting from pent up demand, it’s not just about the music. Concert attendees are spending on merchandise as part of the total experience. Read more
PODCAST
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MARKETS
The US economy shrank by 1.4% in the first quarter, its first contraction in two years, per the Commerce Department.
- However the job market remains robust, with the unemployment rate near a 50-year low of 3.6%, and wages rising steadily.
- Rising wages supported robust spending by households.
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