The ports of Long Beach (in Los Angeles County) and Newark have long cemented southern California and New Jersey as the top hubs for warehouse space in the US, and that isn’t likely to change any time soon.

But amid supply-chain challenges, e-commerce growth, shipping costs, and the lingering effects of the Covid-19 pandemic, the retail landscape is changing rapidly, and the warehousing industry is changing with it.

As companies scramble to build out their distribution capabilities, they’re taking into account labor supply, proximity to consumers, and cost per square foot. And they’re looking toward places like Phoenix, Las Vegas, Savannah, and Dallas as their next big warehouse hubs.

Warehouse realities

Warehouse vacancy rates around the country are extremely low, and in valuable Southern California, they’re at less than 1%, Melinda McLaughlin, SVP and global head of research at Prologis, told Retail Brew.

“It’s an environment of extreme scarcity and it’s very expensive,” McLaughlin said. She added that Prologis, which is the largest global developer of logistics properties, is seeing an increased “open mindedness” among its client companies about where they’re storing products.

The big considerations: Chris Domby, chief supply chain officer at UPS company Ware2Go, said many of his customers are aiming to provide an Amazon-esque delivery option for consumers, meaning two days or less.

So, where are the emerging warehouse hubs?

Breeze said the next hot markets will either be where there’s a growing population, a major logistics hub—like a seaport or rail port—or a location where manufacturing is on the rise.

Reigning champs: But despite the massive growth in different parts of the country, Southern California and New Jersey will always be the most desirable, Jason Miller, associate professor of supply-chain management at Michigan State University College of Business, explained. Ultimately, companies will want to offload their goods as close to their point of arrival as possible.

Keep reading here.—MA

ICYMI, the holidays are approaching fast, as is holiday shopping that will determine seasonal consumer trends at the moment. Morning Consult’s latest holiday report highlights a number of these trends including the popularity of buy now, pay later as inflation-hit consumers will turn to the payment method for financing their shopping across various categories.

And although cash-strapped shoppers may make trade-offs when it comes to categories like alcohol and party decorations, they remain determined to uphold the holiday-gifting spirit. Only this time, they’ll be seeking gift cards and discounts in hordes.

Fashion retailers are bound to benefit from the gifting trend, as clothing placed second on the list of choices that included jewelry and money, in a survey of 2,200 US shoppers.

• Per Morning Consult’s data, 39% of consumers plan to buy or gift apparel, a category moderately impacted by inflation, up from 35% in 2021, with a plurality spending $100–$199.
• The data also revealed that younger shoppers are more likely to shop on Black Friday: “60% of shoppers ages 18–34 plan to shop the sale holiday, compared with just 30% of those ages 65 and older who said the same,” the report read.

Fashion brands that want to optimize their customers’ penchant for gifting apparel should also look to push gift cards, which ranked as the top gifting choice, surpassing others like toys, books, and alcohol in the report.

• In fact, 56% of customers this year plan to give gift cards.

Nice save: “That gift card number is up seven points year over year, and apparel is also up four points year over year, which is a significant difference statistically,” Claire Tassin, retail and e-commerce analyst at Morning Consult, told Retail Brew, adding that gift cards are popular this year since they make sticking to a budget easier.

Keep reading here.—JS

“After a few weeks of CFO financial assessments, analyst questions, and expectation-exceeding results, we rounded up some of the firms that said their bottom lines have been (or will be) impacted by FX fluctuations during Q3 earnings,” write CFO Brew’s Kristen Talman and Drew Adamek:

Costco: The bulk food distributor, which has reassured our weary society (again) that it will not raise its hot dog prices, said that foreign currencies relative to the US dollar negatively impacted sales by a little over 2%.

Nike: The athletic brand doesn’t see the headwinds easing up anytime soon.

Hasbro: The toy maker reported that “foreign exchange had a negative $53.7 million impact, or 3%, on third-quarter 2022 revenue,” with each segment of the company seeing revenue declines because of foreign-exchange impact.

Read the whole story here on CFO Brew.—KT, DA

Today’s top retail reads.

Armchair critic: You’ve heard of fast fashion, but what about fast furniture? Most inexpensive, mass-produced furniture (hello, Ikea) is designed to last about five years. And while it may allow for stylish home furnishing amid high inflation and housing prices, more than 12 million tons of furniture are discarded every year in the US, most of it ending up in landfills. (the New York Times)

Drive time: We might be heading into the busiest time of year for retail, but shipping demand isn’t showing it. Freight operators are reporting a “muted” season, in part because retailers overstocked earlier in the year to avoid the same supply-chain disruptions they experienced in 2021. (the Wall Street Journal)

Losing battle: Millennial shoppers love convenience, but that might not be enough to change the fate of grocery-delivery platforms. “What’s fascinating is that nationally scaled, near-instant grocery delivery is a bad idea, and people keep trying to invent it anyway.” (The Atlantic)

Project pandemonium: That’s what you wanna avoid at all costs, and Smartsheet’s modern work-management tools will keep your team on track with custom solutions built for any scale. See how you can power up for the unexpected with Smartsheet here.*

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The retail and e-commerce industries are suffering from inflation, recession, supply-chain issues, and more. Our analysts revisit their 2022 industry predictions to inform you on the year’s end.

What happened in the world of retail this week in…1848 and beyond? Retail Brew takes you way, way, way back.

• On November 1, 1848, WHSmith opened its first station bookstall in London, in an attempt to take advantage of Europe’s “railway mania.”
• On November 2, 1886, Carl Benz was granted a patent for his “three-wheeled vehicle with gas engine.” He would go on to found the company that became Mercedes-Benz.
• On November 4, 1916, Ruth Handler, creator of the Barbie doll and co-founder of toy company Mattel Inc. was born.
• On November 4, 1879, Ohio saloon owner James Ritty patented the first cash register, hoping to combat theft.

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

• The process of creating an independent luxury performance shoe brand
• Retail execs who made career moves in October
• Our takeaways from Retail Brew’s first annual summit