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GoFundMe fundraisers for groceries, baby formula, and gas are on the rise
Morning Brew August 05, 2022

Retail Brew

Ordergroove

It’s Friday, and a potentially happy one, as today comes with some good news: According to the Labor Department, the US economy added 528,000 new jobs in July.

In today’s edition:

—Andrew Adam Newman, Maeve Allsup, Erin Cabrey

RETAIL

What gives?

A photo illustration that includes images of a package of baby formula, a gas pump, and paper grocery bag. Illustration: Dianna “Mick” McDougall, Photo: Getty Images

A grandmother in Arizona asks for donations for groceries for six “beautiful munchkins”—her grandchildren—because her daughter and son-in-law are struggling to pay grocery bills. Someone in New York City needs donations, too, for a baby formula bank to help parents “in desperate need due to this insane shortage.” And another good egg in North Carolina is looking for donations to buy pet food for nearby animal shelters.

They’re all GoFundMe fundraisers, and they’re part of a spike in appeals for necessities. GoFundMe compared US-based fundraisers from May 18 to July 18 to the same period in 2021:

  • Fundraisers for groceries rose about 30%. (Here and below, this means the title or description of the appeal had “groceries” or related words like “grocery shopping,” categories defined by GoFundMe.)
  • Fundraisers for baby formula rose 700%.
  • Fundraisers for gasoline rose more than 150%.
  • Fundraisers for animal shelters and humane societies rose more than 25%.

A friend in need. “It’s shortages, it’s inflation, it’s the inability of people to meet…what their desires and needs are with the resources that they have,” Margaret Richardson, GoFundMe’s chief corporate affairs officer, told us. “It is a confluence of events around probably supply chain and inflation that are leading these things to be of need.”

GoFundMe declined to provide the raw data on which the percentage increases are based, or the total amount that has been raised for items like groceries or baby formula through its fundraisers. But for the first six months of the pandemic, when the platform was swarmed with pleas, it opened its books a bit wider.

Keep reading here.AAC

        

TOGETHER WITH ORDERGROOVE

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PAYMENTS

Credit where it’s due

Visa credit card Visa

US Senate Majority Whip Dick Durbin endeared himself to retailers and aggravated major credit-card companies in July when he introduced a bill that would provide merchants with a choice regarding who processes card transactions.

Status quo: Right now, merchants process payments made with Visa or Mastercard on those companies’ respective networks. Credit-card companies make money by charging swipe fees, as well as network fees charged to retailers. The two largest card companies charged more than $77 billion in merchant credit-card fees in 2021, Durbin’s office said.

  • The Credit Card Competition Act, which is cosponsored by Roger Marshall, aims to increase competition in the credit-card marketplace by requiring additional processing options for payments made on major credit cards.
  • Banks issuing the two major types of cards—Visa and Mastercard—would be required to allow transactions on at least two unaffiliated networks.

Retailers rejoice: Industry groups, including the National Retail Federation, the National Association of Convenience Stores, and the Retail Industry Leaders Association (RILA), all voiced support for the bill.

  • The bill could help retailers save $11 billion a year, the NRF said, pointing to a report from financial advisory firm CMSPI.
  • Some groups pointed to April, when the credit-card giants upped their swipe fees. That rate hike, amid high inflation, exemplified the interest in injecting competition into a market in which Visa and Mastercard have been “fleecing American consumers,” RILA EVP Austen Jensen said in a statement.

It’s not all sunshine and savings: Credit-card groups say the bill poses a threat to consumer financial data because interchange fees are used to cover the cost of fraud detection, among other things. Jim Nussle, president and CEO of the Credit Union National Association called the bill a “massive financial windfall for big-box retailers,” while the National Association of Federally-Insured Credit Unions warned the bill would “increase the cost of credit to consumers.”

This isn’t the first time credit-card rates have gone under the congressional microscope—in 2009, the Senate passed legislation targeting interest hikes and terms. But the future of this new bill isn’t assured; it was officially introduced July 28 and must be considered in committee before heading to a full Senate vote.—MA

        

FOOD & BEV

Going flat

Hard seltzer Magic Cinema/Getty Images

When consumers look to crack open a cold one this summer, they may not be pulling a hard seltzer or premium beer from the cooler. These segments are seeing sales fizzling out this summer, according to major beer makers, as consumers increasingly favor adventurous flavors and price-conscious options.

Hard sell-tzer: On Truly Hard Seltzer-maker Boston Beer’s Q2 earnings call on July 21, chairman and founder Jim Koch said the company saw a “greater-than-expected continuing decline in demand in the hard-seltzer category.”

  • Truly saw dollar sales dip 17% in Q2, losing 1.3 share points in the category, the company reported.

“Our core light-flavored Truly business has suffered and not performed as we’d expected, as consumers eagerly adopt what’s new and interesting,” Koch noted.

  • In an effort to rejuvenate Truly sales, it’s reformulating its core product with real fruit juice this month and debuting a Truly Vodka Seltzer line in the fall.
  • On the bright side: Koch said other RTDs, like Hard Mountain Dew, have been performing well.

Vizzy maker Molson Coors reported a slightly sunnier seltzer performance on Tuesday, saying its share of the segment grew from 7% in Q1 to 9% in Q2 and highlighting its Topo Chico Hard Seltzer, released last year, as a notable success.

Beer on a budget: Consumer preferences in the beer space may be changing as well. While Molson Coors’s US sales volume was down 1.7%—which CEO Gavin Hattersley told CNBC was due to fizzling sales within beer—its cheaper beers may give it a leg up on the premium-positioned competition as a recession looms.

  • Three out of four of its lower-priced brands grew share in the quarter. This was its economy portfolio’s best quarterly performance in three years, coming a year after it began cutting down its cheaper offerings.

“What some would regard as an Achilles heel in the past, has positioned us perfectly at the moment,” Hattersley told CNBC. “Some of our competitors only operate in the premium space, which is obviously not a place I’d like to be, as we’re heading into what’s clearly going to be tough times.”

+1: Canned cocktails may be coming to steal share from both beer and hard seltzer. Anheuser-Busch reported last week that its Beyond Beer segment, which includes vodka-seltzer brand Nütrl and canned-cocktail line Cutwater Spirits, brought in $425 million for the quarter.—EC

        

TOGETHER WITH BAZAARVOICE

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Growing and glowing in retail. Wanna stand out on the shelf—IRL and online? In Bazaarvoice’s upcoming webinar, experts lay out the biggest growth opportunities that drive retail presence, the investments that can have the greatest economic impact, and how to grow your digital and in-store presence. Register here.

        

SWAPPING SKUS

Today’s top retail reads.

Leafy ambitions: At Green Place, a boutique plant shop in Fullerton, California, owner Jennifer Aragon wants everyone to feel at home. (LA Times)

Running out: Rising costs and supply delays are causing some beauty brands to reformulate ingredients and rethink packaging. “Delays have lifted up the cost of doing business and we’ve had to fly more things in—both raw materials and packaging components,” Caroline Hadfield, president and CEO of Rose Inc, said. (Vogue Business)

Cracking down: From Asos to H&M, big brands making large sustainability claims face scrutiny from regulators as consumers get savvy about greenwashing. (Business of Fashion)

Rave reviews: Your best advertising content comes from happy customers. And Bazaarvoice’s 2022 Shopper Experience Index shows you how to highlight user-generated content (UGC) and stay steady amid ever-shifting trends. Get it here.*

*This is sponsored advertising content.

INDUSTRY HAPPENINGS

Women in Retail and Total Retail Virtual Exchange

Women in Retail and Total Retail Virtual Exchange

Engaging and informative interviews with leading retail executives on a variety of mission-critical industry topics. These free interactive discussions provide valuable insights. Register today! We’re live at 12:00pm ET on August 18 with executives from Mattel, Vera Bradley, thredUP, and more.

WHAT ELSE IS BREWING

  • Carbon dioxide is in short supply across the US, causing operational challenges for craft breweries.
  • Fast Retailing, the parent company of Uniqlo, is set to open stores for its discount brand, GU, for the first time in the US.
  • Amy’s Kitchen, the organic frozen-food company, has been accused of “union-busting” after it shut down a San José facility where employees were seeking to unionize.
  • Amazon will acquire iRobot, the maker of the Roomba vacuum, in an all-cash deal worth ~$1.7 billion.

FRIEND OR FAUX?

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

  1. Are you a New Yorker up for a free pint of beer in exchange for blood? Thanks to a new partnership with local breweries, blood donors can get a voucher for a free beer, cider, wine, or soft drink.
  2. A French company is retiring the use of live animals and employing holograms of lions and elephants for new shows.
  3. A Belgian startup is working on bringing consumers a new kind of meat alternative: plant-based wooly mammoth.
  4. A Hawaii-based water-sports apparel company is offering customers a free goldfish with every purchase as part of a promotion.

Keep reading for the answer.

FRIEND OR FAUX ANSWER

Sorry, but I think you might have to pay for that goldfish.

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Written by Andrew Adam Newman, Maeve Allsup, and Erin Cabrey

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