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Breaking down New Jersey’s ban on single-use bags.
Morning Brew April 29, 2022

Retail Brew

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TGIF, everyone. All this week, we’ve been spritzing on a little bit of this before we send a tweet. Good thing we’re working from home.

In today’s edition:

—Erin Cabrey, Katishi Maake

GROCERY

In the (reusable) bag

tree planted inside thank you bag Francis Scialabba

New Jersey shoppers are in for a major bag alert next week—not from DJ Khaled and Migos, but their local grocery stores.

Come May 4, the nation’s strictest carryout bag ban will take effect, barring all retailers in the state from distributing single-use plastic bags, and grocery stores bigger than 2,500 square feet from offering paper bags.

  • So no, the iconic Trader Joe’s paper bags aren’t an exception…but those plastic bags for produce and ones for wrapping uncooked meat are.

The ban was signed into law in November 2020, but is going into effect nearly 18 months later to give stores enough time to prepare.

Ban-aid: JoAnn Gemenden, executive director of the NJ Clean Communities Council, told Retail Brew the state has been preparing retailers and consumers for the ban through a statewide education campaign called Bag Up NJ, which was introduced in May 2021. It’s been working alongside the New Jersey Food Council, an alliance of the state’s food retailers and suppliers, to establish communications initiatives.

  • It has a downloadable kit available on its website for retailers, containing imagery for web banners, social media posts, and sandwich boards, plus audio PSAs. (We see you, procrastinators: Traffic to its site has grown nearly 500% since January.)
  • The campaign itself has also been advertising all over the state, including at the DMV and on New Jersey Transit buses.
  • Plus, Bag Up NJ gave out ~4,000 bags at an NJ DPS Earth Day event last week, part of an effort to reach “overburdened communities” who may not have access to, or be able to afford, reusable bags, Gemenden said.

Mixed bag: For many multi-state retailers, a bag ban is nothing new, as New Jersey is the ninth state to bar them.

Still, Stefanie Shuman, external communications manager at Ahold Delhaize-owned supermarket chain Stop & Shop, told us that the paper-bag aspect may be one that customers struggle with the most, especially if they’re used to paying a nickel for them in New York.

“Like any change, anything new, there’s going to be a trial-and-error period,” Shuman said. “So of course, there’s going to be a few stumbling blocks with customers, but generally they understand that plastic and paper are going away.”

  • A poll released by Monmouth University last week found that just one-third of New Jersey residents say they know “a lot” about the ban, and 28% knew it covered paper bags.

Click here to read more.—EC

        

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EARNINGS

Fork it over

Food on a podium with a price tag Francis Scialabba

The common thread among strong earnings this week? Significant price increases, which appear to be here to stay for as long as inflation persists.

Super-sized: McDonald’s $5.67 billion revenue haul exceeded Wall Street’s expectations, as the fast-food chain raised menu prices about 8% YoY in Q1.

  • CEO Chris Kempczinski told analysts that some lower-income US consumers are opting for less-expensive menu items—or downsizing their orders—as a result.
  • CFO Kevin Ozan said McDonald’s anticipates heightened inflation to continue through the rest of the year.

Unilever raised its prices an average of more than 8% in Q1, which saw company revenue increase 7.3% but sales volume dip 1%. Some analysts suspect the fall in sales volume could be an early signal that consumers are opting for less pricey brands.

  • Still, the CPG giant warned that more price hikes are on the way.

“As far as pricing and volumes, I think we are in uncharted territory,” CEO Alan Jope said on a Thursday earnings call. “While we’re acutely aware of the pressure on consumers, we believe that increasing prices in response to this extreme commodity cost pressure is the right thing to do.”

And: Although price hikes failed to offset increased input costs and transportation expenses, Mattel’s net sales bumped up 19% to $1.04 billion on the back of two of its most popular brands—Barbie and Hot Wheels—which saw overall gross billings jump 8% and 31%, respectively.

Zoom out: Companies have used inflation since 2020 to justify raising prices, which has led to billions in additional profits, according to corporate watchdog group Accountable.US.

  • In an examination of the nation’s top 10 retailers, the group found these companies collectively increased profits by $24.6 billion over the past two years.—KM
        

WHAT ELSE IS BREWING

  • Consumer spending in the US rose 1.1% in March (on a seasonally adjusted basis) from the month before, per the US Commerce Department.
  • Amazon reported its slowest revenue growth in ~20 years. It also announced that Prime Day would be in July this year.
  • Victoria’s Secret, meanwhile, will start selling its beauty products on Amazon, a first for the retailer.
  • Briogeo, the clean hair-care brand, has been acquired by the beauty group Wella Company.
  • Flipkart, the Indian e-comm giant backed by Walmart, is eyeing the metaverse via a new innovation arm.

FROM THE CREW

Morning Brew Leadership (MB/L) has officially launched! And we put the Morning Brew spin on it, giving you actionable lessons in a fun, engaging environment—unlike what some other leadership programs offer.

So, what is MB/L? In this 8-week education program, students will learn about the tactics of leadership, including hiring, delegation, strategy, and execution. This might sound like what you’d get from a run-of-the-mill leadership course, but MB/L is designed to make topics that can feel overwhelming feel approachable instead.

What’s more, MB/L helps you build authentic relationships with your fellow students that go beyond the virtual classroom. To top it all off, access to alumni benefits means your professional growth won’t stop at graduation.

Download the syllabus now to find out everything you’ll learn in Morning Brew Leadership. (Psst: You can also save $500 on tuition if you join our founding cohort!)

SWAPPING SKUS

Today’s top retail reads.

New ways: As its wholesale profits rise, Puma’s pivot to multi-brand retail has helped it gain an identity that differentiates it from competitors. (Business of Fashion)

Running out: Supermarkets in the UK are stockpiling cooking oil amid shortage concerns due to the war in Ukraine. (The Guardian)

Sweet success: Shortly after making an appearance in Beyoncé’s limo, Lemon Perfect went viral. Now, Queen Bey is a backer in the lemon-water brand’s $31 million Series A funding round. (Tech Crunch)

Listen: Check out Morning Brew cofounder Alex Lieberman’s interview with model-turned-CEO Kathy Ireland, who talks about transitioning careers and shares how she ultimately overcame doubt and criticism to create the multibillion-dollar business she runs today. Listen to Imposters here.

FRIEND OR FAUX?

Three of the stories below are real...and one is most definitely not. Can you spot the fake?

  1. Tropicana created a cereal specifically for orange juice.
  2. McDonald’s announced a $2 million investment to “fix” its ice-cream machines in response to Elon Musk’s tweet.
  3. Lego Ideas put its own spin on Wordle with “Legordle.”
  4. Heinz has released a new product made for dipping burgers in sauces dubbed “Heinz Dip & Crunch.”

Keep reading for the answer.

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morningbrew.com/retail/r/?kid=303a04a9

FRIEND OR FAUX? ANSWER

We fear those McFlurry machines will never be Mcfixed…

 

Written by Erin Cabrey and Katishi Maake

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