New & Notable in Retail: June Update

Every month we round up the latest news from the world of retail. The goal? To zero in on trends that can help our brand partners make informed, strategic decisions.

Here’s a closer look at what major national retailers were up to last month — and what it might all mean for your business and brand.

Costco

Skyrocketing freight and labor costs in the United States led to a two percent drop in gross margins for Costco last month.

However, rising labor and freight costs don’t mean the company will increase its membership price. While Costco has historically raised this key fee every five-and-a-half years, execs say current market conditions may not be suitable for an increase at this time.?

Meanwhile, despite the fall in gross margins, Costco reported positive third-quarter earnings and revenue.

Another bright note from Costco lately? The wholesale giant reported earning the fourth place on GlobalData’s Top 25 Global Retailers list, behind Walmart, Amazon, and CVS Health.

Brand Takeaways

Costco’s struggles with higher costs are far from isolated. Due to supply chain disruptions worsened by another wave of COVID lockdowns in China and the war in Ukraine, many U.S. companies found themselves in the same position.

What does all of this mean for Costco customers? Costco did say it would increase prices in certain areas due to inflation.

At the same time, strategic measures like keeping gas prices low have fueled new memberships and sales. Members can also breathe a bit easier with news of a stay on membership price increases.

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Walmart & Sam’s Club

Like Costco, Walmart reported taking a hit due to rising fuel and labor costs. Still, sales grew by three percent, with the company gaining market share in grocery. Comp, eCommerce, and Sam’s Club comp sales all reported growth, while Walmart International's net sales were down.

Walmart continued to innovate on the technology front: the retail giant announced an expansion of its use of AI-powered supply chain technology and demonstrated its ongoing prioritization of helping customers save time and money, including its commitment to drone delivery.

While free samples are nothing new at Sam’s Club, the company also announced plans for a huge sampling event for its Member’s Mark brand. In addition to introducing members to new foods, the event is also a “reintroduction” to Member’s Mark, which is undergoing a shift to becoming a regenerative brand.

Brand Takeaways

Walmart’s recent activities showcased several ongoing trends relevant to today’s brands, including consumer demand for efficient delivery options and products and services with a positive impact.

One way to combine both of these trends? Embracing mindful sustainable packaging.

Target

Target’s financial picture was similar to that of Costco and Sam’s Club. In addition to reporting growth, the company highlighted measures designed to deliver what today’s consumers crave: a broad assortment of products, ease, convenience, and value.

Meanwhile, a conversation with the company’s new Chief Information Officer underscored the company’s belief in using technology and data to offer more personalized, relevant, and seamless experiences while positively impacting people and the planet with specific priorities like reducing waste and creating equity.

Speaking of having a positive impact, Target continued to demonstrate its commitment to corporate social responsibility through initiatives like the Target Scholars Program and campaigns like its Pride Collection, celebration of Asian American and Pacific Islander Heritage Month, and REACH in support of Black-owned businesses, Black talent, Black designers and Black creators.

Brand Takeaways

Target’s unwavering focus on corporate social responsibility reminds all brands of the value of consistently leading with your core values — and sharing your efforts with consumers.

Amazon

Despite low margins over the past few years, experts say there’s cause for a more optimistic outlook thanks to improving cash flows.

There was also promising news with the announcement of new initiatives, such as the opening of Amazon’s first physical clothing shop and its first technology-powered store. Meanwhile, at NielsenIQ’s annual Consumer 360 (C360) event, Amazon and Walmart weighed in on next-gen retail — specifically, the need for better data, collaboration, and personalization. Amazon’s Justin Honaman also shared that the pandemic created new opportunities for smaller brands to stand out.

Finally, Amazon revealed progress toward its goal of powering its global operations with 100 percent renewable energy by 2025 through new deals with AES.

Brand Takeaways

Amazon’s latest updates reinforce the importance of keeping customers front-and-center by constantly exploring new ways to deliver better and more satisfying experiences. This includes everything from the actual in-store experience to how your core values make customers feel about supporting your business and brand.

Packaging and POP displays have the potential to impact the customer experience in several ways, like communicating those all-important company values. Check out our FREE eBook and learn more about how our packaging and POP solutions can help you position your brand for success.