The Goods (U.S. Edition) – Reading the Fee Leaves
Welcome back to The Goods! This week we’re discussing the impact of immigration policy on shopping habits, how haircuts act as recession indicators, and the retailer causing total mayhem with its $2.99 tote bags.
Two holidays coincide this weekend that could make for some interesting dinner table dynamics. Easter, one of the most important holidays in Christianity, falls on 4/20 this year, the unofficial holiday for marijuana enthusiasts. This year will be the 13th time Easter has taken place on April 20 since 1630, according to the U.S. Census Bureau. Regardless of which holiday you do (or don’t) celebrate, it should be a big day for sweet treats.
What’s In: This Week’s Trends
- Sewing Pains: Since opening in 2019, Louis Vuitton’s rural Texas factory has consistently ranked among the brand’s worst-performing globally due to a lack of skilled leather workers, resulting in excessive waste and production errors. Flawed bags – which retail for $1,500 to $3,000 – are being shredded for not meeting quality standards. Up to 40% of leather hides are being wasted, which is twice the industry standard. Still, parent company LVMH continues to search for stateside artisans that can meet its stringent quality requirements as it works to expand its U.S. production and avoid fallout from threatened tariffs on European-made goods.
- Feeling the Costequences: Small retailers are facing a conundrum as a trade war with China and tariff threats on other countries are causing prices on everything from jeans to jars to spike. Unlike retail giants such as Amazon and Walmart, smaller businesses can’t negotiate supplier terms or fast-track inventory before tariffs hit, leaving them to either absorb rising costs or risk losing customers with price hikes. The owner of a scented candle company said the price of a 12-pack of glass candle jars from China jumped to $25 from $21 – but similar jars made in the U.S. still cost twice as much.
- Suddy Waters: Constellation Brands reported a 1% dip in quarterly beer sales to retailers, its first decline since acquiring Modelo, Corona, and Pacifico in 2013. The slowdown is tied in part to President Trump’s immigration agenda, which has shifted shopping habits among Latino consumers who make up 50% of Modelo’s U.S. customer base. Latino shoppers are increasingly avoiding smaller retailers and bodegas that primarily serve Hispanic consumers and shopping instead at large retail chains in an attempt to blend into a crowd. Many are also steering clear of liquor stores so they do not have to show ID and avoiding grocery stores after 6 p.m. to avoid evening immigration raids.
Cash or Card: Consumer Behavior
What’s going on with the consumer these days? This week we talk about how shifting beauty habits could be a recession indicator, consumer trends from the perspective of banks, and electronic stockpiling.
- Shear Signs: Those working in beauty, hair and personal care could be witnessing firsthand some of the earliest possible signs a U.S. recession. Stylists from cities to rural areas are reporting their usually reliable regulars are skipping appointments, stretching time between treatments, or switching to cheaper, low-maintenance looks. Google searches for “press-on nails” and “blonde to brunette” are rising as women trade salon visits for DIY beauty on a budget. In addition to skipping their monthly mani appointments, young women are also ditching therapy, cancelling streaming services and swearing off sober Uber rides.
- Reading the Fee Leaves: Major U.S. banks are hinting that a recession could be averted if consumer spending remains at the current level. Finance chiefs from both Citigroup and BofA indicated they are seeing encouraging signs from the consumer and their spending habits based on first quarter results. However, some of this spending could be attributed to consumers pre-purchasing and stockpiling goods that could be impacted by tariffs. Wells Fargo warned that less affluent customers were showing signs of stress, while Citi said spending had shifted toward essentials and away from travel and entertainment.
- Byte the Bullet: Tariff uncertainty has sparked a wave of panic buying, from electronics to early Christmas gifts. Between April 2-7, consumer spending at Apple, which makes 80% of its iPhones in China, spiked 20% – though a late Friday memo from the Trump administration exempted items like smartphones and computers from tariffs. For over a decade, American shoppers have purchased iPhones each year beginning in September, when Apple releases its newest models, but now April has become this year’s iPhone-buying season. With many products still at risk, families are now considering doing their Christmas shopping in May to avoid future cost increases.
Making Moves: Industry Transformations & Innovation
ICYMI, even industry icons need to reinvigorate their brand presence through unique and creative ways. Here are some new brand moves that you should know about:
- High Rolling: Talk about baked goods… M. Smucker is courting a new audience: stoners. With its “Munchie Mobile” snack truck, the company is doling out iconic Hostess treats like Twinkies, Donettes, and Ding Dongs outside of marijuana dispensaries across the Northeast each day at 4:20 p.m. in the lead-up to 4/20. The campaign marks a bold shift from the brand’s family-friendly roots as Smucker works to revive the 106-year-old baked snack line it acquired for $4.6 billion in 2023. Snackers can even score a free treat by shouting stoner-ready phrase like, “Bet you dollars to Donettes I have the munchies!”
- Dollin’ Like LeBron: To celebrate the 65th anniversary of the Ken doll, Mattel has unveiled a new line of “Kenbassadors” – dolls modeled after male celebrities who are “inspiring and contributing to a better world for all” – and has tapped basketball legend LeBron James as the first honoree. Priced at $75, the LeBron doll stands one-inch taller than the standard Ken doll and features personalized details that pay homage to James’ Akron, OH roots. James, who helped design the doll, called the collaboration an opportunity to highlight the power of positive role models and inspire kids to dream big.
- Tote-al Mayhem: Trader Joe’s limited-edition canvas tote bags are back, sparking mania as customers are lining up as early as 5 a.m. to snag the 11-by-13-inch pastel bags and selling out inventories within 15 minutes in some locations. The frenzy, which has even led to physical altercations, prompted some New York City stores to limit purchases to two per customer and stash the bags behind registers, while also increasing on-site security. Although they are too small for groceries, the $2.99 totes have become trendy accessories and hot resale items, fetching up to $70 on eBay.
Capital Markets Corner
ICYMI, even industry icons need to reinvigorate their brand presence through unique and creative ways. Our investor relations experts break down this week’s trends and headlines.
- Constructing Capital: Home improvement retailer Lowe’s has agreed to acquire Artisan Design Group (ADG) from PE firm Sterling Group for $1.33 billion. As ADG provides design, procurement, and installation services for interior finishes like flooring and countertops, the deal would expand Lowe’s professional contractor business, positioning it to take back market share from its rival, Home Depot. Lowe’s and Home Depot are both facing slower demand for home remodels and construction activity, as recent tariff announcements have bred uncertainty around housing costs and building inputs.
- Not to be Luxed With: Recent tariffs imposed by the Trump administration have shattered hopes of a luxury revival in 2025. Amid an increasingly tense trade dispute between the U.S. and China, sell-side analysts are slashing growth forecasts across the luxury sector, with one industry banker remarking, “any pick-up in luxury is pushed into 2026.” Following a worse-than-feared Q1 2025 print, LVMH tumbled as much as 8.4% on Tuesday and briefly lost its status as the world’s most valuable luxury company to rival Hermes. Many have interpreted LVMH’s lackluster results as a troubling sign for the entire luxury sector. RBC analyst Piral Dadhania wrote in a note, “Investor concerns around underlying demand recovery are likely to be amplified based on these results.”
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