News Briefs

Higher prices took a big toll on U.S. consumers last year.

Consumers in the United States spent an extra $1 trillion on goods and services due to increased prices in 2022, according to an analysis by Forrester.

Inflation impacted serval personal consumption expenditures (PCE) categories, the firm noted, including. Of the $1.1 trillion attributed to increased prices in 2022, consumers paid $468 billion extra due to increased prices of goods and $636 billion extra due to increased prices of services.

Here’s the impact of inflation across other PCE categories:

• Nondurable Goods: The impact of inflation was very evident in the categories of gasoline, food, and beverages. Consumers paid $121 billion more due to increased prices of gasoline and other energy goods in 2022.

• Durable Goods: Motor vehicles and parts, furnishings and durable household equipment saw the largest increase in prices, with consumers paying $72 billion and $46 billion extra, respectively for these two categories alone. 

Recreational goods and vehicles saw deflation. The prices of televisions, other video equipment and information processing equipment declined instead of increasing.

“Spending growth in these categories was volume-driven, not inflation-driven,” stated Jitender Miglani, senior forecast analyst, Forrester.

Restaurants benefitted from increased spending in February as consumers focused on experiences.

U.S. retail sales (excluding automotive) were up 6.9% year-over-year in February, according to Mastercard SpendingPulse, which measures in-store and online retail sales across all forms of payment. (Mastercard SpendingPulse reflects nominal spending and is not adjusted for inflation.)

Experiences were a top priority in February. Spending on restaurants increased 14.2% year-over-year, while airline spending was up 14.2% and lodging spending jumped 42.7%.

“This reflects suppressed growth in 2022, as well as continued demand for travel and experiences ahead of the popular spring break season,” noted Mastercard SpendingPulse.

E-commerce sales increased 13.2% year-over-year as winter weather activity in many parts of the country kept consumers inside. In-store sales were up 5.5%. By comparison, in-store sales increased 8.9% in January.

The apparel and department store sectors showed moderate growth during the month. Year-over-year department store sales were up 5.6%; sales at apparel stores rose 3.9%.

"Retail spending continued to grow at a steady rate compared to 2022,” said Michelle Meyer, North America chief economist, Mastercard Economics Institute. “The consumer remains supported by robust labor market conditions with some added cushion from savings.”

A former Twitter executive will head up diversity efforts at Nike.

James Loduca is joining the athletic apparel and footwear giant as chief diversity, equity & inclusion officer. Most recently, from November 2021 to January 2023, he served as VP, inclusion, diversity, equity and accessibility at Twitter.

Loduca announced the appointment on his LinkedIn page.

“In an increasingly polarized time, sport is one of the few things that still brings us together,” he wrote in the post.

Prior to joining Twitter in 2017, Loduca was chair, San Francisco Human Rights Commission, which played a lead role in navigating the city's response to the COVID-19 pandemic in 2020. Before that, he was director, equality at Salesforce.

Loduca is the fourth person to fill the chief diversity role at Nike since 2020. He replaces Jarvis Sam, who left in February after six months in the position to head up his own multi-services DEI firm, The Rainbow Disruption.

Nordstrom is winding down its operations in Canada — and expanding its outlet banner. 

The upscale department retailer revealed the move in its fourth-quarter earnings release. As of January 38, there were six full-line Nordstrom stores and seven Nordstrom Rack stores in Canada, as well as a dedicated website.

Nordstrom Canada will wind down its stores across the country with the help of a third-party liquidator and its Canadian e-commerce platform. The in-store wind-down is expected to be completed by late June 2023.

Nordstrom Canada represents less than 3% of total company sales. The retailer said it expects to see a $400 million decline in total net sales as a result of leaving Canada.

“We entered Canada in 2014 with a plan to build and sustain a long-term business there,” stated CEO Eric Nordstrom. “Despite our best efforts, we do not see a realistic path to profitability for the Canadian business. This decision will simplify our structure, intensify focus on our growth and profitability goals and position us to create greater value for our shareholders."

Nordstrom reported net earnings of $119 million, or $0.74 per diluted share, for the quarter ended January 28, from $200 million, or $1.23 per share, in the year-ago period. Analysts had expected earnings per share of $0.66.

Net sales fell to $4.200 billion from $4.382 billion. Net sales decreased 2.4% at Nordstrom and 8.1% at Nordstrom Rack. Digital sales decreased 13.1%.

“We took decisive actions to right-size our inventory as we entered the new year, positioning us for greater agility amidst continuing macroeconomic uncertainty,” said Eric Nordstrom. “As we enter fiscal 2023, we are focused on enhancing the customer experience, improving Nordstrom Rack performance, increasing inventory productivity and continuing to advance our supply chain optimization initiatives.”

The retailer attributed Rack’s recent declines to its decision to end its policy of fulfilling online orders from stores. On the company's earnings call, Eric Nordstrom said the company is committed to improving  Rack's performance via efforts that include prioritizing 100 nationally recognized brands to help drive sales and grow market share and opening 20 new stores.

"Rack stores continued to be our largest source of new-customer acquisition, accounting for more than 40% of newly acquired customers in 2022,” he told analysts. 

As previously announced on February 28, the board of directors declared a quarterly cash dividend of $0.19 per share to be paid to shareholders of record at the close of business on March 14, 2023, payable on March 29, 2023.

During fiscal 2022, Nordstrom repurchased 2.8 million shares of its common stock for $62 million under its existing $500 million share repurchase program. A total capacity of $438 million remains available under this share repurchase authorization.

Alimentation Couche-Tard Inc. is expanding its U.S. footprint.

The company said it has entered into an agreement to acquire Big Red Stores, which operates 45 fuel and convenience stores across the state of Arkansas.  The sites are all company-owned and company-operated, with real estate owned for all but one of the locations.

Big Red was founded in 1997 by Doug and David Hendrix. Couche-Tard noted that the Big Red network is comprised of large format stores that have ample space for enhanced food service and product offerings.

“We are very pleased to add Big Red Stores' high-quality locations to our footprint in the state of Arkansas,” said Alex Miller, COO, Couche-Tard. “Doug and David built an exceptional network of stores and people, and we believe our values are congruent with the culture they've spent a quarter-century building. As we expand our presence in the area, we look forward to bringing the Circle K experience to new customers and making their lives a little easier every day."

The transaction is expected to close in the first half of calendar year 2023, subject to standard regulatory approvals and closing conditions.

Couche-Tard is a global leader in convenience and fuel retail, operating in 24 countries and territories, with more than 14,300 stores, of which approximately 10,900 offer fuel. With its Couche-Tard and Circle K banners, it is one of the largest independent convenience store operators in the United States.

Little Caesars is looking to take a bite out of the Big Apple.

The family-owned and third-largest pizza chain in the United States announced an aggressive new strategy to open hundreds of restaurants during the next several years throughout New York City and the Tri-State area. To kick things off, the company has signed an agreement with experienced multi-brand franchisees Suhel Ahmed and Saurabh Desai that will bring 10 Little Caesars restaurants to the Bronx and upper Manhattan by 2026. The first opening is scheduled for late 2023.

“New York City is an iconic pizza market, and we’re eager to bring more of our high-quality, great-value products and fast, convenient ordering options to the city,” said Jeremy Vitaro, Little Caesars chief development officer. “We’re excited to work with Suhel and Saurabh, who have extensive experience developing restaurants in New York City, to help grow our presence in the market.”

Ahmed and Desai have more than 40 years of combined restaurant experience. They also own and operate dozens of franchise locations by other global quick-service restaurant chains throughout New York City.

“We know how to own and operate a multi-unit franchise business, and we know what brands work in New York City,” said Ahmed. “We chose to franchise with Little Caesars because it has decades of experience as a global pizza chain and because of its recognized value, quality and convenience that revolutionized the pizza industry.”

Little Caesars is seeking accomplished multi-unit franchisees with extensive QSR experience to help grow the brand across the Tri-State Area. There are several multi-unit opportunities available with a three-store minimum agreement throughout Long Island, the Hudson Valley, New Jersey, Connecticut and the five boroughs.

Headquartered in Detroit, Little Caesars has locations in each of the 50 U.S. states and 27 countries and territories. The brand is home of the exclusive Pizza Portal pickup, a heated, self-service mobile order pickup station.