It’s no secret that the US dollar is getting stronger, and while for some, that might mean getting a good shopping deal while traveling across the globe, for most retailers, it’s hurting their bottom line. Fashion retailers—including Primark and H&M—have all stressed that the strengthening dollar is damaging to their business.

“Headwinds from foreign exchange shifted significantly in the last 90 days as the trend of US dollar strengthening has accelerated,” Nike CFO Matthew Friend said in an earnings call last month.

Levi’s also reported last week that its Q3 2022 gross margin was down 60 basis points YoY, driven largely by the increase in value of the US dollar.

So, what can retailers do to combat the rising dollar? We asked three fashion experts to weigh in.

Here are some highlights from those conversations:

Brian Ehrig, partner, Kearney’s consumer practice: “For global brands still making their products at the same places—like Vietnam or China—but selling them all over the world, it’s a more complicated story, because now they’re going to have a significant earnings hit when they convert those international sales back to US dollars.”

Garrett Sheridan, CEO, Lotis Blue Consulting: “If I were a fashion retailer, I’d be thinking about managing my operating costs as well as I can. I’d be carefully thinking about next season’s assortments and looking to next fall to start really benefiting from the hard work on better assortments, maybe managing the supply-chain diversity, diversifying and maintaining those customer relationships.”

Sunny Zheng, research analyst, Coresight Research: “International brands are expanding aggressively in the US by opening physical stores, but my thinking will be to slow the pace of growth, focus on growing e-commerce, and to suit consumer needs for products to have the right products to engage more with consumers.”

Keep reading here.—JS

If you headed into the mountains (or the woods, or the lake, or the desert) to escape a tiny city apartment during the pandemic, you probably noticed you weren’t alone.

If it seemed like the entire country was flooding into campsites, RVs, and national parks, it’s probably because, by many accounts, they were. According to a report commissioned by the Outdoor Foundation, 2020 saw the highest participation rate on record in outdoor recreation. Visits to parks, like Acadia National Park in Maine, saw record highs in 2021, and sales of products like sport racks, tents, and sleeping-bag liners saw massive growth.

“It was a really good two years for outdoor,” Kelly Davis, director of research at Outdoor Industry Association, told Retail Brew. “One of the dark gifts of Covid is that everybody got outside.”

While the outdoor retail industry wasn’t immune to the impact of the Covid-19 pandemic, nor is it immune to the challenges of high inflation and supply-chain disruptions, experts say the industry’s outlook is a hopeful one.

“The outdoor market does tend to be pretty resilient,” Davis said. “We fared the 2008 downturn pretty well, and I think we’re going to fare this one fairly well, too.”

Lay of the land

Participation in outdoor recreation doesn’t necessarily follow the same path as outdoor sales, Davis explained.

“When the economy is bad, that’s good for some outdoor categories, because these are options for entertainment that are super low cost,” she said.

• The outdoor recreation participant base has grown nearly 7% since March 2020, according to Outdoor Industry Association data. The biggest jump occurred between 2019 and 2020, but 2021 saw the industry continue to expand.
• Some categories, like team sports, saw declining participation during the pandemic, Davis said, while others, like walking for fitness, gained participants.

Keep reading here.—MA

Today’s top retail reads.

Tech time: In 2022, it’s almost not enough just to have a storefront; retailers need to show off their tech to attract customers. Here are four in-store technology trends that have shaped 2022. (Retail Dive)

Coming in hot: Plant-based, Latin-flavored, ready-to-heat meal line Casa Verde isn’t even a year old, but the brand has already struck a deal with Albertsons to debut in at least 1,600 markets this fall. (Modern Retail)

Fresh look: While Amazon’s been a public company for more than 25 years, its operations look much different under newly minted CEO Andy Jassy, who’s made it a point to cut costs across the board. (CNBC)

The SKU: A Retail Brew Summit is coming to NYC in just two weeks!

In just one day away from your desk, you can expand your professional network, gain perspective from leaders at top retail brands such as Crocs and Kroger, and head home with strategic insights that could help reduce your brand’s carbon footprint, increase brand awareness and affinity, and much more. Tickets are only $599 for a limited time!

The numbers you need to know.

As retailers prepare for the holiday shopping season, they’ll have to align with consumer expectations, which are tempered by ongoing inflation and rising prices.

More than half (58%) of US consumers plan to cut their spending on non-food purchases this holiday season, which could result in a $30 billion elimination of consumer spending from the market, according to a ShipStation survey conducted by Auctane.

• That drop would result in a 14% YoY drop in overall spend.
• Half of merchants surveyed expect online sales to increase this holiday season.

Plus, online searches for the term “save money” have increased in the US and reached a five-year high, globally.

“Inflation and economic uncertainty are forcing consumers to rethink their spending priorities this holiday season,” Robert Gilbreath, general manager of ShipStation, said in a statement. “To combat this, merchants should proactively formulate a holiday season game plan. This includes re-examining and improving the experience they offer: from the moment an order is placed online through last-mile delivery.”

The report found that more than a quarter of consumers globally expect to cut back spending on apparel this holiday season. However, merchants still remain confident; 65% said that they expect increased order volumes this year compared to 2021.

Catch up on the Retail Brew stories you may have missed.

• Delivery execs from Kroger, Walmart, and Shein talk priorities
• Smart Balance’s buttery spread faces backlash over “skimpflation”
• Why Pacsun teamed up with the Metropolitan Museum of Art on a clothing collection