The Goods (U.S. Edition) – Power Buynamic
Welcome back to The Goods! This week we’re discussing a 24-hour boycott on all U.S. purchases, expected Valentine’s Day spending, and denim that is dividing the internet.
Who was the “peepetrator” of this crime? Someone stole 100,000 eggs off a Pennsylvania trailer last week. With avian bird flu causing U.S. egg prices to skyrocket 15.2% between December and January, hitting a record average price of $4.95 per dozen, it comes as no surprise that someone hatched up this heist for $40,000 worth of eggs. Police are still trying to crack the case.
What’s In: This Week’s Trends
- Power Buynamic: A group known as the People’s Union is planning a nationwide economic blackout as a response to the rollback of DEI initiatives sparked by the federal government. For 24 hours starting at 12:00am on February 28, participants are pledging not to make any purchases online or in-store. The boycott specifically targets big retailers like Amazon, Walmart and Best Buy, but People’s Union is also asking people to refrain from spending money on fast food or gas. The intention is to demonstrate how even one day of consumer restraint can impact corporate bottom lines.
- Knit Wit: Finding well-made clothing is getting tougher as the apparel industry struggles with supply chain issues and overseas competition from fast fashion giants. Fabric accounts for 60% of a garment’s cost, so many brands have quietly downgraded fabric quality in order to maintain affordable prices – hoping shoppers will prioritize cost over durability. According to one expert, retailers “know if they raise the price, they lose consumers.” Apparel prices declined 1.4% in January from the month prior, according to data from the U.S. Bureau of Labor Statistics.
- Shipping the Narrative: Last week, we reported that President Trump suspended the ‘de minimis’ tariff exception, which allows shipments under $800 to enter the U.S. duty-free. However, just a day later, President Trump signed an executive order pausing that decision. The suspension came amidst concerns of overwhelming U.S. Customs and Border Protection employees, as the mountain of low-value shipments already making their way into the U.S. would suddenly require formal processing. E-commerce giants Temu and Shein are responsible for an estimated 30% of de minimis U.S. imports.
Cash or Card: Consumer Behavior
What’s going on with the consumer these days? This week we talk about the cost of Cupid’s arrow, Red No. 3 awareness among Americans, and tariff spending strategies.
- My Love Does Cost a Thing: Consumers are set to spend a record $27.5 billion on Valentine’s Day this year, up from $25.8 billion last year, according to an annual survey from the National Retail Federation and Proper Insights & Analytics. More than half of consumers are expected to celebrate the holiday this year, with 4% more men planning to jump on the love wagon compared to 2024. Roughly one-third of shoppers are also now purchasing heartwarming gifts for friends, up 4% from last year. The most popular Valentine’s Day gifts are expected to be candy, flowers, greeting cards, a night out, and jewelry.
- Red Alert 🚨: After the U.S. Food and Drug Administration banned Red No. 3 from food and ingested drugs on January 15th, Americans got the signal loud and clear. According to a survey conducted by 84.51°, a subsidiary of Kroger, 83% of respondents are aware of the FDA’s ban on Red No. 3 and 47% said they were extremely or very likely to avoid products with the synthetic dye. Notably, consumer demographics such as age and income levels did not affect awareness. However, 48% of the survey respondents said they won’t change their Valentine’s Day candy choices, and only 25% are willing to switch to candy without the dye.
- The Price is Tight: Consumers are strategically spending in the face of potential price hikes from tariffs, with 49% of Americans reporting they plan to buy less, and nearly half saying they are more likely to consider purchasing pre-owned goods. This comes as U.S. consumer sentiment hit a seven-month low in early February, also in response to short-term inflation expectations related to tariff concerns. Some younger consumers are practicing a “buy now before prices spike” strategy, but many others are holding off on those big-ticket items like cars, travel purchases, furniture, home appliances, and electronics.
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:
- Sniff My Ride: That new car smell is so last year; instead, consumers are sniffing out high-end car fragrances. Luxury car brands like Bentley, Porsche, and Jaguar have long crafted signature scents inspired by their bespoke interiors, and now fragrance houses are entering the car space. In the last five years, some of the biggest names in fine fragrance have launched car-specific products, with Diptyque, Acqua di Parma, and Jo Malone all introducing car diffusers. The luxury car scent market is expected to surpass $3.2 billion by 2032 as consumers continue to seek out personalized and luxurious scent experiences.
- Not a Flare in the World: The controversial skinny jean may be making a return, with brands like Prada, Isabel Morant, and Tod’s showcasing the slim silhouettes on runways. Last month, popular TikTok star and Gen Z influencer Alix Earle debuted a pair of skinny jeans with the denim brand Frame, driving a 50% year-over-year search increase for the style. Retail analyst Janine Stichter says the return of the skinny jean could be a “big positive for the sector,” creating a need for a whole closet refresh, from new tops to different footwear. But not everyone is opting for a slim jean: the jeans Kendrick Lamar wore during his Super Bowl Halftime show (are they bootcut or flare?) could lead to a resurgence in the fit.
- The Lidl Things: After restructuring its business and leadership, Lidl is repositioning itself as a value-focused grocery retailer in the U.S., emphasizing low prices and high-quality private label products. In one North Carolina market, Business Insider compared prices at Lidl to a Publix and found that the same grocery list was $40 less at Lidl. Lidl requires customers to use reusable bags, delivers products in shelf-ready cases, and uses electronic shelf labels to keep costs low. Since opening its first U.S. stores in 2017, the retailer now operates more than 180 stores and plans to add 800 stores over the next few years.
Capital Markets Corner
What consumer news is moving the market this week? Our investor relations experts break down this week’s trends and headlines.
- Not Keeping Tabs: Diet Coke lovers may soon be swapping their soda tabs for bottle caps. After President Trump imposed a 25% tariff on aluminum earlier this week, Coca-Cola announced plans to shift more of its packaging from aluminum to plastic to control production costs. The soda-maker’s CEO said the move aligns with company’s strategy of maintaining affordability and ensuring customer demand, noting that “if one package suffers some increase in input costs, we continue to have other packaging offerings that will allow us to compete in the affordability space.”
- Blush Crush: Beauty stocks fell sharply last week, as companies like E.l.f. Beauty and Estée Lauder posted disappointing earnings and cut guidance. Though E.l.f. reported a Q2 revenue beat, the makeup producer missed on EPS and reduced the midpoint of its sales guide by $25 million. Analysts from Morgan Stanley, D.A. Davidson, and UBS all downgraded the stock, citing the guidance cut. Estée Lauder delivered revenue and EPS beats, but these were overshadowed by the company’s plans to cut 7,000 jobs and its weak Q3 forecast, which considers persistent demand weakness, particularly in Asia. In January, the cosmetics sector declined 5% broadly due to a hangover from holiday discounting and a decline in online attention to beauty products.
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