Hey Friends,
All eyes were on the CPI this week……In August 2024, U.S. inflation, as measured by the Consumer Price Index (CPI), rose by 0.2%, matching market expectations. This increase brought the annual inflation rate down to 2.5%, the lowest level since February 2021. However, core CPI, which excludes volatile food and energy prices, increased by 0.3%, slightly above the expected 0.2%, keeping the core inflation rate steady at 3.2% year-over-year.
This higher-than-expected core CPI complicates the Federal Reserve's monetary policy decisions ahead of their meeting on September 18. Despite this, traders still priced in an 85% chance of a 25 basis point interest rate cut, down from earlier expectations of a more aggressive 50 basis point reduction. The shelter index, a major component of CPI, continued to rise, increasing by 0.5% in August and accounting for about 70% of the core CPI increase.
Other price changes in August included modest increases in food prices (+0.1%) and a decline in energy costs (-0.8%). Used vehicle prices fell by 1%, while medical care services decreased by 0.1%, and apparel prices rose 0.3%. Real wages grew for the month, with average hourly earnings outpacing inflation, increasing by 0.2%.
Apple dominated the tech headlines with their latest product release, “It’s Glowtime”. In case you missed it, the highlight was the introduction of the iPhone 16 series, which includes four models: iPhone 16, 16 Plus, 16 Pro, and 16 Pro Max. The iPhone 16 Pro lineup features significant upgrades, such as improved camera systems, faster MagSafe charging, and the new A18 Bionic chip. The Pro models start at $999 and will be available in stores on September 20, 2024 .
Another major announcement was the Apple Watch Series 10, which boasts a thinner design, new health-tracking features, and faster performance. Apple also unveiled AirPods 4, now with enhanced noise-cancellation and better audio quality, powered by the H2 chip .
Perhaps the most exciting new feature was the introduction of Apple Intelligence, an AI-driven assistant designed to work seamlessly with iOS 18, enabling more intuitive interactions across devices .
iPhone 16 Series:
A18 Bionic Chip: Offers significantly enhanced processing power and efficiency.
Improved Camera Systems: The iPhone 16 Pro models feature a more advanced camera, supporting better low-light performance and high-end filmmaking capabilities. The Pro Max supports 8K video recording .
MagSafe Enhancements: Faster wireless charging and more accessories optimized for the new camera layout.
All-Fiber Packaging: A shift towards eco-friendly packaging.
image credit: Apple
Apple Watch Series 10:
Thinner Design: A sleeker, more compact look.
New Health-Tracking Features: Enhanced metrics for heart health, sleep tracking, and activity monitoring.
Improved Battery Life: Faster performance with extended battery longevity.
image credit: Apple
AirPods 4:
H2 Chip: Improved noise cancellation and better audio quality.
USB-C Charging: Following the industry shift away from Lightning connectors .
Apple Intelligence: A new AI-powered assistant integrated with iOS 18, enabling advanced voice and device interactions, making devices more intuitive and personalized.
Apple has officially retired the iPhone 13 and the iPhone 15 Pro and Pro Max models following the release of the iPhone 16 lineup. This move isn't surprising, as Apple previously phased out the Pro models of older iPhones, like the iPhone 14, when newer versions were released. By discontinuing the previous year's Pro models, Apple encourages buyers interested in premium features to upgrade to the latest offerings.
However, the discontinuation of the iPhone 13 is notable because it was the last iPhone to offer a physical SIM card. With its exit, all currently available iPhones, starting from the iPhone 14, are now eSIM-only, a change that some users welcome, while others may find less convenient.
As of now, the iPhones available for purchase from Apple include the iPhone 14, iPhone 14 Plus, iPhone 15, iPhone 15 Plus, iPhone SE, and the new iPhone 16 models.
Additional info on the release can be found here.
CSC Generation, a technology platform that owns brands like One Kings Lane and Sur La Table, has acquired Backcountry, an outdoor retailer, along with its associated brands, including MotoSport, Competitive Cyclist, and Steep and Cheap. The financial details of the acquisition were not disclosed.
Big brother is always watching….PwC UK is intensifying its enforcement of a 3-day in-office policy by announcing that it will begin tracking employee locations starting January 1st. The move comes after difficulties ensuring compliance, with many consultants and accountants not adhering to the mandate. To address this, PwC will share location data between employees and managers to monitor office attendance. The firm is giving employees a few months to adjust, especially those who may have relocated far from the office during the pandemic. The US division also announced this week it would be laying off roughly 1800 employees and restructuring its technology group as the firm faces slowing demand for some of its advisory business.
Victoria’s Secret has relaunched its VSX activewear line, originally introduced in 2011 as VSX Sexy Sport. The new collection includes sports bras, leggings, and ready-to-wear pieces like trench coats, catsuits, and T-shirts. Available online and in stores nationwide, VSX is positioned as a blend of performance, comfort, and fashion.
The relaunch aims to capitalize on the growing activewear and athleisure markets, which have become increasingly popular, especially since the pandemic. VSX's designs focus on supporting women’s bodies through body mapping and high-quality fabrics.
Victoria’s Secret has faced financial challenges, with sales slightly down, but it recently reported growth in operating income for the first time since 2021.
It’s Halloween season in retail….weird to say considering its still 6 weeks away but Halloween 2024 spending is expected (no shocker here) to break records. Some data to digest:
Halloween spending in the U.S. reached new highs in 2023, with families spending $12.2 billion, a 15% increase from pre-COVID figures. For 2024, shoppers plan to spend even more on candy, food, costumes, and decorations, according to a survey by Advantage Outlook.
Candy remains the top expense, with 81% of shoppers prioritizing chocolate, and chewy or gummy candies also popular. Over 50% of shoppers plan to spend $51 or more on candy, while 59% will spend the same on food. Despite this, 70% of candy buyers delay their purchases until the week of Halloween, presenting a challenge for retailers.
To encourage earlier sales, retailers are advised to offer bundled deals, themed assortments, and early-bird discounts. Flash sales, loyalty rewards, and well-stocked, eye-catching displays in the final week are also recommended to drive impulse buys and maximize sales as the holiday approaches.
According to Advantage Outlook's "Halloween 2024 Trends" report:
Even as the economy shows positive improvements, 49% believe either inflation, the pending recession or both will impact their Halloween spending.
Only 8% of shoppers plan to use delivery apps for candy and 9% for food or beverages.
46% of candy shoppers will purchase based on what has good value/price, while 42% of candy shoppers will purchase goods with promotions or sales.
55% will purchase candy multiple times during the season, with one-quarter buying three or more times.
Beyond Inc. is reviving the Bed Bath & Beyond brand through a licensing model, similar to Authentic Brands Group's strategy, which capitalizes on brand equity while transferring operational risks to partners. Executive Chairman Marcus Lemonis expressed the goal of reintroducing the brand with affordable, quality products available both in-store and online. The company also monetized its intellectual property by selling rights to the Wamsutta brand for $10.25 million, recovering nearly half of the $21.5 million paid for Bed Bath & Beyond. The company is open to licensing and partnerships, though it's unclear if it will extend beyond the legacy brand.
LL Flooring, which had previously announced plans to liquidate after failing to find a buyer, has now reached an agreement with its largest shareholder, private equity firm F9 Investments, for a going-concern sale. The deal is set to close by the end of the month, pending approval from the U.S. Bankruptcy Court and other conditions. F9 Investments will acquire 219 stores, their inventory, a distribution center in Virginia, and LL Flooring’s intellectual property and assets. The firm has already made a $4.1 million cash deposit to secure the agreement.
Verizon announced plans to acquire Frontier Communications in an all-cash deal valued at $20 billion. The acquisition, expected to close within 18 months, will enhance Verizon's fiber network, boosting its ability to compete with AT&T and other carriers. Verizon has offered $38.50 per Frontier share, a 37.3% premium on the company's stock price before the deal was reported.
The acquisition will combine Frontier's 2.2 million fiber subscribers in 25 states with Verizon's 7.4 million Fios connections in nine states and Washington, D.C., expanding Verizon's fiber coverage beyond its current regions. The deal is expected to generate at least $500 million in annual cost synergies and improve Verizon’s revenue and earnings growth.
Amazon announced a $2.1 billion investment in its Delivery Service Partner (DSP) program, aimed at supporting small businesses that handle last-mile deliveries. This investment will be spread over the next five years and will offer partners resources such as new benefits for drivers, including access to health insurance, 401(k) plans, and tuition assistance. Additionally, Amazon plans to provide partners with tools, technology, and business coaching to help them improve efficiency and sustainability. The initiative is part of Amazon's effort to strengthen its logistics network and reduce delivery times.
Holiday hiring headlines are among us with Burlington being the first to weigh in. The retailer has announced a nationwide hiring initiative aimed at recruiting 23,000 part-time seasonal workers across its stores. The positions include cashiers, retail associates, and stocking associates. Additionally, the company plans to hire 1,500 full-time warehouse workers for its distribution centers. The hiring process will include nationwide events on September 24-25 and October 29-30, with interviews continuing through December.
Have a great week folks…