šŸµStarbucks partners with Grubhub

Partnership aims to reach more customers

June 07, 2024

Hey, Retailist community! šŸŒŸ As the weekend nears, there's a wave of excitement sweeping through the e-commerce, retail, and Direct-to-Consumer (DTC) sectors. This week has been rich with news, fresh trends, and groundbreaking innovations in our industry. Ready to dive into the most intriguing stories that have surfaced? Letā€™s explore these developments together and uncover what they mean for us!

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In the news: Top headlines this week

Big Lots may be making more turnaround progress than it seems. Big Lots is making progress on its turnaround efforts despite a challenging consumer environment, with sales down and rising debt levels. The company has increased its cost-cutting target to $185 million by the end of the year and has reduced its inventory significantly. Additionally, Big Lots is focusing on acquiring more extreme bargain merchandise and has made changes to its merchandising team to improve acquisition efforts. [Retail Dive]

Five Below Faces Sales Dip but Expands Store Footprint. Five Below is experiencing a 2.3% decline in comparable sales due to inflation impacting lower-income consumers' spending habits on essentials like food, fuel, and rent. While higher-income shoppers are trading down and seeking value at Five Below, leading to positive performance in this segment, it hasn't fully compensated for the decline among lower-income demographics. In response, Five Below is expanding its store footprint and focusing on strategic initiatives such as trend identification, enhancing social media presence, optimizing cost structures, and monitoring the effects of price reductions and shrink mitigation on sales. [Retail Wire]

No-tariff shipments popular with Shein, Temu hit US customs speedbump. A U.S. crackdown on customs brokers managing inexpensive online orders from companies like Shein and Temu is expected to cause delivery delays and bottlenecks. The U.S. Customs and Border Protection (CBP) has suspended "multiple" brokers from an expedited clearance program due to concerns about contraband entering the country through these duty-free imports. Increased inspections at U.S. airports and reviews of electronic submissions by customs brokers are part of this effort. With over 1 billion packages, averaging around $50 in value, forecasted to arrive in the U.S. this year, delays are unavoidable, according to industry experts. [Reuters]

Walmart rolls out new training programs for skilled trades as it tries to fill high-demand roles. Walmart announced new training programs and certifications to fill high-demand roles, such as HVAC technicians, opticians, and software engineers, and will offer store workers bonuses of up to $1,000 per year to improve retention. As the largest private employer in the U.S., Walmart is investing heavily in its workforce and stores to maintain its leading retailer status amid competition from Amazon and high inflation. The company is also enhancing its stores with a $9 billion modernization project and has increased its average hourly wage to nearly $18, with starting pay ranging from $14 to $19, following a minimum wage raise in January 2023. [CNBC]

Lululemon Shifts Focus to International Markets. Lululemon is experiencing significant international growth, particularly in Asia, as its U.S. expansion has slowed. In the first quarter of fiscal 2024, international sales increased by 35%, with a notable 45% rise in China, while sales in the Americas grew modestly by 3%. CEO Calvin McDonald attributed this success to the company's effective growth strategy, which integrates high-performing physical stores with a strong e-commerce presence. In North America, Lululemon is enhancing omnichannel engagement through its loyalty program, offering benefits like early product access and exclusive event invitations to increase membership and long-term value. [Retail Wire]

Starbucks partners with food delivery platform Grubhub. Starbucks has partnered with Grubhub to deliver its beverages and products in select U.S. markets, starting with Pennsylvania, Colorado, and Illinois, and expanding nationwide by August. This partnership aims to reach more customers as inflation drives more people to eat at home. Starbucks already offers delivery through DoorDash, Uber Eats, and Postmates. The company has seen double-digit growth in its U.S. delivery business in the past quarter, and the partnership with Grubhub is expected to further increase the availability of Starbucks products to Grubhub's extensive customer base. [Reuters]

Amazonā€™s first U.S. labor union moves to affiliate with Teamsters. The Amazon Labor Union (ALU), the first union formed by Amazon workers in the U.S., has taken steps to affiliate with the International Brotherhood of Teamsters. The ALU, which gained national attention by winning a union election at the JFK8 warehouse in Staten Island in 2021, initially operated as an independent organization. However, it has faced challenges negotiating a contract with Amazon, which has contested the election results, and internal conflicts have emerged, including a lawsuit by former members alleging violations of the union's constitution and demanding an election for union officers. [CNBC]

Banana Republic unveils refreshed New York City flagship. Banana Republic has unveiled its refreshed flagship store in SoHo, New York City, featuring concierge, styling, and tailoring services, along with the city's first BR Home showroom. This revamp is part of the brand's strategy to enhance its brick-and-mortar presence and product assortment, following the launch of its home goods line last year. The updated SoHo location is designed to represent a premium expression of Banana Republic, continuing the momentum from their San Francisco flagship store debut last year. [Retail Dive]

Dollar Tree is exploring a sale of its Family Dollar brand. Dollar Tree is considering selling its more grocery-focused Family Dollar brand, which it acquired in 2015 for nearly $9 billion. This decision follows recent plans to close almost 1,000 Family Dollar stores in an effort to revamp the struggling business, with more than 500 locations closed in the fiscal first quarter. The company aims to streamline Family Dollar while accelerating growth at Dollar Tree and is conducting a thorough review of strategic alternatives for Family Dollar. There is no set deadline for the review process, and Dollar Tree is working with advisors from JPMorgan and Davis Polk & Wardwell. [CNBC]

Bath & Body Works forecasts downbeat annual profit on subdued demand; shares tumble. Bath & Body Works forecasted a full-year profit below market estimates and anticipates a decline in annual sales, indicating that demand for its scented candles and body care products remains subdued amid persistent inflation. Shares of the company fell 8.8% in premarket trading as it also projected second-quarter profit below expectations. With constrained budgets, customers are hesitant to spend on expensive non-essential products like home goods, though they are beginning to purchase smaller discretionary items such as trendier clothes and accessories. [Reuters]

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