| Here’s your daily business briefing. - 🛍️ Research: Bettergoods line appeals across incomes
- 🔍 Deep Dive: Wayfair's store signals retail revival
- 💰 PitchBook: Crypto VC hits $2.4B
Thanks for reading! Shriram
p/Shriram | |
| 1 | | Research by Numerator suggests Walmart's bettergoods appeals to a broad spectrum of consumers, including both low- and high-income households, compared to Walmart's Great Value label shoppers. Walmart's ($WMT) private brand, bettergoods, offers groceries priced between $2 and under $15, with seventy percent of items below $5 to blend affordability with standout features. More: - In a bettergoods ice cream shoppers survey, 40% reported annual incomes below $40,000, approximately 33% fell within the $40,000 to $125,000 income range, and 27% earned over $125,000.
- Walmart's private label products represent 26.4% of total grocery sales, with their market share rising in the first quarter of fiscal year 2025.
- Walmart's CFO revealed that private-brand items were in over half of all customer grocery baskets over the past year.
- Bettergoods is Walmart's biggest food private brand launch in 20 years, part of efforts to boost its food private label lineup amid rising grocery sales and falling inflation rates.
- Bettergoods offers 300 products spanning frozen, dairy, snacks, beverages, pasta, soups, coffee, and chocolate categories.
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What the numbers say: Retail store openings surpassed closures for the first time in five years in 2022, continuing into 2023 and 2024. Wayfair ($W) is set to open its inaugural large-format physical store near Chicago, covering 150,000 square feet, on May 23, aligning with a trend observed among digitally native companies like Warby Parker, Figs, Glossier, and Everlane, which have ventured into brick-and-mortar retail expansion. Relevance: Wayfair's expansion into physical retail highlights the significance of in-store experiences for visually or tactilely oriented product categories. Despite the prevalence of online shopping, around 85% of retail sales still take place offline, emphasizing the enduring importance of brick-and-mortar stores, a trend that direct-to-consumer brands increasingly acknowledge for driving sales, attracting customers, and boosting brand visibility. More data: The resurgence of brick-and-mortar retail is evident in the recent trend of net new store openings, driven by discount retailers and direct-to-consumer brands. Yet, entering physical retail poses challenges and costs, as evidenced by Allbirds and Purple, prompting cautious entry for Wayfair despite its online success. | | | |
| 3 | | According to PitchBook, crypto startup funding surged to $2.4B in Q1 2024, marking a second consecutive quarterly increase, distributed across 518 deals, representing a 40.3% rise from the previous quarter. Conversely, global venture capital investments hit a near five-year low during the same period, with startups specializing in crypto and blockchain infrastructure securing the highest funding. More: - Despite declining investor confidence in digital asset startups since Q1 2022, BlackRock and Fidelity's approval of spot bitcoin ETFs in the U.S. has bolstered market legitimacy.
- The rise in publicly traded tokens and institutional adoption played a significant role in the increased venture capital funding.
- Together, AI clinched the largest deal, securing $106M in an early-stage round led by Salesforce Ventures, resulting in the company's valuation of $1.1B.
- Despite increased funding, exits remained minimal, with anticipated upticks in mergers later in the year, especially among crypto exchanges, custodians, and infrastructure providers.
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| 4 | | Swiss luxury group Richemont reported record full-year sales, boosting shares by 6.3% on Friday, with a 3% rise to $22.38B despite a weakening luxury market outlook. However, fourth-quarter sales fell 1% to $5.21B due to a slowdown in the Asia-Pacific region. More: - Chairman Johann Rupert attributed the decline in Asia-Pacific sales to challenging comparatives and expected a gradual rebound in Chinese demand.
- Nicolas Bos, CEO of Van Cleef & Arpels, will become Richemont's new group CEO on June 1.
- The luxury sector has faced pressure since late 2023 due to challenging macroeconomic and geopolitical conditions affecting consumer spending, particularly in China.
- On Friday morning, luxury sector competitors LVMH, Kering, and Christian Dior saw their stock prices decline.
- Kering warned of a significant first-half profit downturn due to decreasing demand for its Gucci brand in Asia-Pacific.
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| 5 | | Red Lobster has filed for Chapter 11 bankruptcy protection, intending to reduce its size and seek a buyer amid financial challenges attributed to a tough macroeconomic climate and unsuccessful strategic efforts. While the seafood chain has received a stalking horse bid from current lenders, it remains open to superior offers. More: - Red Lobster, currently with 551 U.S. and 27 Canadian locations, intends to shutter 108 underperforming leases.
- The bankruptcy filing discloses assets and liabilities estimated to be between $1B and $10B.
- Red Lobster's primary creditor, distributor Performance Food Group, asserts the company owes $24.4M.
- The company incurred a net loss of $76M in fiscal 2023, partially due to an unsuccessful "endless shrimp" promotion.
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| 6 | | AstraZeneca is investing $1.5B to build its first dedicated manufacturing site for antibody drug conjugates (ADCs) in Singapore, with construction starting in 2024 and operations beginning in 2029. ADCs, like AstraZeneca's Enhertu, which generated over $2.5B in sales last year, deliver targeted chemotherapy to cancer cells, minimizing damage to healthy tissue. More: - Singapore's mature manufacturing facilities and favorable business climate have drawn significant high-tech investments, such as those from Siemens and ongoing talks with TSMC.
- The new site will be strategically located near AstraZeneca's rapidly growing Southeast Asian markets, where sales rose by 24% in 2023, excluding China.
- AstraZeneca's CEO, Pascal Soriot, highlighted Singapore's appeal for intricate manufacturing and the potential of ADCs to supplant conventional chemotherapy.
- The company is additionally enhancing its manufacturing capacities in the U.S. and Europe through substantial investments in Rockville, Maryland, and Dunkirk, France.
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 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Shriram Jeevakumar | |
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