Hey Friends,
In the states it is Good Friday, and with the Easter holiday approaching, if you celebrate with chocolate in your Easter basket, it may get considerably more expensive this year. Cocoa prices have more than doubled in the first three months of the year and more than tripled in the past 12 months. The world is facing the biggest deficit of cocoa in decades. Most cocoa beans are grown in West Africa, where extreme weather and changing climate patterns have disrupted crop harvests, which are likely to fall short for the third year in a row.
Donuts made the frontline of news this week. McDonald’s and Krispy Kreme announced a partnership in which McDonald’s will begin selling Krispy Kreme Doughnuts nationwide by the end of 2026. A test concept is underway in Louisville, KY, three flavors of Krispy Kreme Doughnuts will be delivered to McDonald’s restaurants daily – the original glazed, chocolate iced with sprinkles and chocolate iced "kreme" filled – and will be available as single donuts or a box of six.
Costco food courts are known for their $1.50 hot dog-soda combos, chicken bakes and pizza, but now the warehouse club is cracking down on this policy for non-club members. The image below has been making its rounds on the internet with the message . “Effective April 8, 2024, an active Costco membership card will be required to purchase items from our food court,” the sign read, notifying customers that they can join today at the “membership counter.”
Richard Galanti, who retired from serving as Costco’s longtime CFO in mid-March, recently told Axios the move would affect locations featuring exterior food courts. "One of the challenges is that some of the food courts have gotten so busy, particularly if it’s near some office buildings or construction sites. We were getting member complaints," Galanti told the outlet about the crackdown.
Membership fees accounted for $4.6 billion, or 73% of Costco's total profit in 2023.
In some other discount retailer news…. Dollar Tree said that it would raise the price cap in its stores to $7 in its fourth quarter earnings call earlier this month. "This year, across 3,000 stores, we expect to expand our multi-price assortment by over 300 items at price points ranging from $1.50 to $7," Dollar Tree CEO Rick Dreiling said in the call on March 13. A $5 cap was set in June, according to Yahoo Finance. In 2021 the company raised the base price of items to $1.25. In other Dollar Tree news, they will close roughly 600 Family Dollar stores this year, citing shoplifting and inflation hurting their bottomline.
Amazon just made it easier than ever to enroll in Amazon One - their biometric payment service. With the use of AI and camera vision, Amazon One creates a palm signature to be used for payment at at any one of the 500+ Whole Foods Market stores in the U.S., several Amazon stores, and over 150 third-party locations in stadiums, airports, fitness centers, and convenience stores.
One of my favorite things about ThredUp is that not only are they a retailer, they’re also a subject matter expert on their own market. According to their recent resale report, The U.S. secondhand apparel market grew seven times faster than the broader retail clothing market last year, according to a widely followed annual report on the state of the resale market. The U.S. secondhand apparel market is expected to reach $73 billion by 2028 after growing 11% to $43 billion last year. That compares with a 1.6% increase in U.S. clothing sales in 2023. The image below, shared directly from the ThredUp report, shows some trends on the topic:
The New York Fashion Tech Lab, a non-profit program for women-led startups in the sectors of fashion & retail, announced its 11th cohort this week. Each year a delegation of retailers and brands join forces to support this program by selecting and meeting with the emerging tech companies during the 12-week lab. According to the NYFTL website, The New York Fashion Tech Lab is a community-driven, relationship building, collaboration, and business development platform. The nonprofit program was co-founded by Springboard Enterprises and key fashion retailers to support women-led companies that have developed innovations at the intersection of fashion, retail, and technology.
The 2024 Lab Companies include the following:
The 2024 Lab includes returning partners J.Crew Group, LVMH, Selfridges & Co, The TJX Companies, Inc, and Tapestry, joined by first-year partners lululemon, MCM Worldwide, and Neiman Marcus Group.
And, to me, one of the wilder stories I found this week - while not exactly retail related interesting nonetheless- Up until recently, the Williams Formula 1 team had been using an Excel spreadsheet to manage the 20K plus inventory list for their vehicles. Often, the Williams F1 team has been described as being 20 years behind the pack in regards to technology and investment in the program. The excel system contained around 20,000 individual components and parts but didn’t include fields for essential data like component costs, stock levels, and lead times. “The Excel list was a joke,” said Williams new team principal James Vowles. “Impossible to navigate and impossible to update.” More information can be seen in the video here.