National

Axios Finish Line

Inflation is at a 40-year high, but a few things are actually getting cheaper.

Why it matters: We're here with actual good news. Yes, you read our opener right. Some prices have stayed the same — and others have actually gotten cheaper over the past year.

Ballgames: Ticket prices for sporting events are down 11% year over year, according to the Consumer Price Index.

Tech upgrades: Smartphones are 20% cheaper. TVs are 10% cheaper. For the student in your life: Calculators are 13% cheaper. 

Beach reads: The price of books has stayed the same despite supply chain woes and inflation. As we've reported, one of the silver linings of the pandemic has been an increase in recreational reading. Join other Americans in reviving reading for pleasure this summer.

Something shiny: Jewelry is ever so slightly cheaper now than it was last year — 1.2%.

Free lunch: Food at elementary and secondary schools is a whopping 43% cheaper, as many districts have stepped up to feed kids in need for free while we navigate COVID.

Clothing spree: If you feel like a trip to the mall, a number of items are either the same price or cheaper compared to last year. Check out women's swimwear, men's shorts and infant apparel.

🛒 Between the lines: Some of these goods are cheaper because people are sticking to necessities —  but stores had already stocked up as the supply chain recovered.

👀 A trend to watch: Soaring lumber prices are finally falling in the U.S. That could soon make it cheaper to build and buy new houses.

💡 Cheapest of all: Hanging out on your own back porch. 

Where prices are falling despite inflation

Inflation is at a 40-year high, but some things are actually getting cheaper.

Illustration of a retail shopping bag full of market trend arrows. 

Inflation

Retail

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

If you plan to shop for fireworks for the Fourth of July, brace yourself for sticker shock of 25–30%, one fireworks CEO told Axios.

Driving the news: There has been an “unprecedented demand” for backyard fireworks since 2020 when many cities and towns first canceled professional shows because of COVID, said Julie Heckman, executive director of the American Pyrotechnics Association.

By the numbers: A key gauge of inflation accelerated by 8.6% from a year earlier in May, the fastest pace in 40 years, Axios’ Courtenay Brown writes.

Since 2019, the fireworks industry has seen shipping costs increase from $8,000 to $10,000 per shipping container to approximately $45,000 per container, according to the American Pyrotechnics Association.

State of play: Despite shipping delays and increased costs, there is more inventory this year than in the past two years, Bruce Zoldan, CEO of Ohio-based Phantom Fireworks, told Axios.

Phantom, the nation's largest consumer-based retail fireworks company supplying thousands of retailers nationwide, has sold out of fireworks in the last two years because of "extreme shortages," Zoldan said.

Some professional fireworks, including two Independence Day shows near Washington D.C., have been rescheduled due to a shortage of licensed pyrotechnic staff.

What they’re saying: Zoldan said the price increase and inflation could impact sales.

"We have no idea how they'll react based on all the other necessity items that they have to deal with like gas, food and everything else that has gone up tremendously,” he said.

"Even in recession years, people buy fireworks, and we don't see as much negative buying as maybe other businesses because people want to get together," Zoldan said.

Heckman believes most families have a budget for Fourth of July celebrations and that this year "people will most likely just get a little bit less bang for their buck."

What's next: While some shoppers started buying their fireworks in May, Zoldan said the average buyer hasn't shown up yet. Father's Day weekend usually kicks off the busiest firework shopping season, he added.

Phantom will have more than 1,500 seasonal stands in the week leading up to the holiday. 

Since fireworks sold out across the nation last year, Heckman advises consumers to shop early to find the most selection.

IRS raises mileage rate amid high gas prices

Huy Fong sriracha sauce in short supply amid chili pepper shortage

Fourth of July fireworks have "less bang" for the buck

Prepare for sticker shock on Independence Day sparklers.

Illustration of fireworks in the shape of dollar signs

Expect fireworks to cost more this year. Illustration: Sarah Grillo/Axios

Fourth of July

The U.S. Consumer Product Safety Commission has issued a stern new warning for a popular Fisher-Price baby product after at least 13 babies died: Never use the rockers for sleep.

Driving the news: CPSC and Fisher-Price issued an alert Tuesday for the company’s Infant-to-Toddler Rockers and Newborn-to-Toddler Rockers after "at least 13 reported deaths" occurred between 2009 and 2021. 

The announcement is being called a “safety notice” and not a recall per Mattel, Fisher-Price’s parent company.

The rockers "should never be used for sleep and infants should never be unsupervised or unrestrained," the safety commission said.

Fisher-Price has sold more than 17 million rockers worldwide since the 1990s.  

A separate warning was also issued Tuesday for Bright Starts and Baby Einstein rockers by the commission and company Kids2.

Flashback: In 2019, Fisher-Price recalled more than 5 million Rock ’n Play baby sleepers after 30 babies died in a 10-year period.

Before the 2019 recall, Fisher-Price and the commission issued a warning.

What they’re saying: “Parents and caregivers should never use inclined products, such as rockers, gliders, soothers, and swings, for infant sleep and should not leave infants in these products unsupervised, unrestrained, or with bedding material, due to the risk of suffocation,” the commission said in a statement.

U.S. Sen. Richard Blumenthal (D-Conn.) called for a recall, saying in a tweet Tuesday that “Fisher-Price & Kids2 must immediately cooperate with the CPSC & recall these deadly rockers.”

“Companies should not market or depict infant products such as rockers, gliders, and inclined products as a way to get babies to sleep or as sleep products, since they are not safe for infant sleep,” Dev Gowda, assistant director of Kids In Danger, said in a statement.

Meanwhile, the commission "finalized a rule requiring that infant sleep products have a sleep surface angle of 10 degrees or less" that goes into effect on June 23.

Fisher-Price said it has videos, additional safety information and warnings for the rockers and other products on its Safe Start webpage at www.fisherprice.com/SafeStart.

The company is encouraging consumers to report incidents at 800-432-5437.

Incidents for this and other products can also be reported to the safety commission at SaferProducts.gov.

The following are recommendations for safe sleep from the commission:

The best place for an infant to sleep is on a firm, flat surface in a crib, bassinet or play yard.

Parents and caregivers should use a fitted sheet only and never add blankets, pillows, padded crib bumpers, or other items to an infant's sleeping environment.

Infants should always be placed to sleep on their back. 

Infants who fall asleep in an inclined or upright position should be moved to a safe sleep environment with a firm, flat surface such as a crib, bassinet or play yard.

Editor's note: This article has been updated with additional information.

Fisher-Price rocker warning issued after "at least" 13 babies died

The announcement is being called a “safety notice” and not a recall per Mattel.

The U.S. Consumer Product Safety Commission and Fisher-Price are warning consumers about Fisher-Price Infant-to-Toddler Rockers and Newborn-to-Toddler Rockers. Photo: Consumer Product Safety Commission website

Health care safety

Axios What's Next

Late-night munchies will be a little easier to satisfy for mobile customers at Taco Bell's new touchless drive-thru restaurant coming to Brooklyn Park, Minnesota.

Why it matters: When you're hungry, you want your food NOW.

Flashback: Axios' crack local reporters in Minneapolis-St. Paul already flagged plans for this prototype fast-food joint back in February, pointing out its odd resemblance to a bank branch.

Details: The "Taco Bell Defy" restaurant opened on Tuesday.

 There are four drive-thru lanes, three of which are dedicated to mobile or delivery orders. 

The fourth lane is a traditional drive-thru, where you place your order at a kiosk and drive ahead for pickup. 

Mobile order customers scan a QR code they received when they placed their order, then pull forward to receive their food.

Food is delivered from the elevated kitchen above via a proprietary lift system similar to the pneumatic tubes used by those bank branches.

The entire pickup process is contactless, although two-way audio and video technology lets customers interact directly with Taco Bell employees in real time. 

Touchless Taco Bell could be the future of drive-thrus

Scan a QR code, and your order is lowered down from the kitchen above

Image of a new Taco Bell restaurant design, with 4 drive-thru lanes under the kitchen. 

Rendering of a Taco Bell Defy restaurant coming in Brooklyn Park, Minnesota. Photo: Taco Bell

Restaurants

Huy Fong Foods is warning of a chili pepper shortage that could make it harder to spice up your meals.

The big picture: The California-based company, known for its sriracha sauces with a rooster on the bottle, confirmed to Axios via email that it is "experiencing a shortage which is affecting our production supply."

In an April 19 letter to customers, Huy Fong Foods said it faces a “more severe shortage of chili” because of “weather conditions affecting the quality of chili peppers.”

The company told Axios it gets its peppers from Mexico, which along with the western U.S., is experiencing a drought.

Axios found inventory for Huy Fong sriracha on Target and Walmart’s websites for in-store pickup and delivery using various zip codes across the country.

On Reddit, some users reported having difficulty finding sriracha in local stores or finding purchasing limits.

What they’re saying: “Unfortunately, this is out of our control and without this essential ingredient, we are unable to produce any of our products (Chili Garlic, Sambal Oelek, and Sriracha Hot Chili Sauce),” Huy Fong Foods said in its letter.  

Meanwhile, Brady's Sushi and Hibachi in Richmond, Kentucky, took to Facebook and Instagram to tell its customers about the shortage.

The restaurant said it may “no longer provide Sriracha as a free condiment at our establishment till further notice.”

Brady’s also said the sauce “plays a key role in our house-made Spicy Mayo, we will start to limit 1 free Spicy Mayo per 2 rolls until we secure our resources.”

A day after Brady’s May 23 posts, the restaurant said in a new post that customers dropped off sriracha bottles found at a local grocery store.

Flashback: Huy Fong Foods said in its letter that it told customers in July 2020 that it was experiencing a shortage of chili pepper inventory.

What's next: The company tells Axios it hopes it "will resume production as normal" with its fall harvest.

The company's letter said orders submitted on or after April 19 would be scheduled after Labor Day in the order received.

Helium shortage hits birthday and graduation parties

Restaurants layer on new fees to counter inflation

Walmart drops coconut milk amid monkey labor allegations

It might be harder to spice up your meals.

Huy Fong Foods said there's a shortage of chili peppers used in its sriracha sauces. Photo: Abel Uribe/Chicago Tribune/Shannon Kinsella/food styling/Tribune News Service via Getty Images

Food

Axios Closer

Target's excess inventory problem will eat into its profits this quarter, the retailer warned Tuesday.

Why it matters: This year's already been tough for Target, which is trying to adjust to a new economic reality.

Record high rates of inflation cooled consumer demand and prompted people to rethink their purchases.

Catch up quick: Target says it plans to cut prices and cancel orders as it tries to "right-size" its stock for the rest of the year, the company announced.

As a result, the company says it now expects smaller margins for the current quarter (about 2%) than previously estimated (around 5%).

However, Target still maintains that its operating margins for the last six months of the year will come in at a rate that exceeds pre-pandemic levels.

Flashback: Like other retailers, Target had bulked up its inventories last year to try to satisfy record consumer demand and to protect itself from ongoing supply chain issues.

State of play: The retailer is now running sales on patio furniture, kitchen equipment, and other goods for the home — the very items that for most of the last two years have been in shortest supply, Axios' Neil Irwin notes.

What to watch: Target's warning spooked investors, who sent shares of the company's stock down more than 3% as well as those of its peers, Walmart and Amazon.

Target to slash prices as it faces inventory glut

The company's warning spooked investors, who sent shares of its stock down more than 3%.

A Target story in Miami. Photo by Joe Raedle/Getty Images

Target

Walmart is the latest retailer to stop selling Chaokoh coconut milk, following retail giants Costco, Target, Kroger and others who have pulled the product from shelves amid monkey labor allegations.

Why it matters: The nation’s largest retailer has discontinued stocking products from a Thai supplier who has been accused of using monkeys for forced labor, officials with the People for the Ethical Treatment of Animals (PETA) exclusively told Axios.

Walmart confirmed to Axios that it no longer sells Chaokoh products in stores and online.

Sam’s Club also did not list Chaokoh products for sale on its website as of late Monday.

Since 2019, when it began investigating the alleged animal exploitation, PETA has been pushing stores to stop selling coconut milk allegedly made with coconuts harvested by monkeys.

What they’re saying: “The coconut trade uses social monkeys as chained-up coconut-picking machines, depriving them of any opportunity to eat, play, or spend time with their families,” PETA Executive vice president Tracy Reiman said in a statement.

PETA said its supporters sent Walmart more than 86,000 emails asking it to stop selling Chaokoh products.

"With one PETA exposé after another confirming cruelty on coconut farms, retailers are dropping Chaokoh left and right," Reiman said. 

The other side: The Thailand-based maker of Chaokoh coconut milk, Theppadungporn Coconut Co. Ltd, did not respond to Axios’ request for comment.

The company’s website has a summary of a 2020 report by Bureau Veritas Certification (Thailand) Ltd., which was contracted to conduct a “Monkey-Free Coconut Due Diligence Assessment.”

The report notes in September 2020 it randomly picked 64 out of 817 farms for the assessment and did not find the use of monkeys for coconut harvesting.

Flashback: Walgreens, Food Lion, Giant Food and Stop & Shop were among the first U.S. retailers to stop carrying Chaokoh products after PETA's investigation.

Costco and Wegmans pulled the products in fall 2020 and Target and Kroger in 2021.

Walmart adding 4 fulfillment centers, 4,000-plus jobs

Taco Bell redefines the drive-thru with "Defy" restaurant

Costco not raising membership fees or hot dog combo price

PETA said supporters sent Walmart more than 86,000 emails over Chaokoh products.

Walmart has discontinued the sale of Chaokoh brand coconut milk. Photo: Bing Guan/Bloomberg via Getty Images

Walmart

Your future Walmart online orders could soon arrive faster.

Driving the news: The nation's largest retailer announced Friday that it will open four "next generation" fulfillment centers over the next three years, which will provide 75% of the U.S. with next- and two-day shipping on millions of items.

The company said the four centers will rely heavily on automation and be the "first of their kind for Walmart" using a combination of "people, robotics, and machine learning."

The first will open this summer in Joliet, Illinois, and is 1.1 million square feet.

The other centers will be in McCordsville, Indiana; Lancaster, Texas; and Greencastle, Pennsylvania — with each planning to hire more than 1,000 new workers.

Why it matters: Consumers have been shopping online at a greater rate since the pandemic.

According to a March report from Adobe, U.S. consumers spent $1.7 trillion online between March 2020 and February 2022, $609 billion more than in the two preceding years.

What's next: Walmart said its priority is to "strategically locate" the centers to pair "most effectively with our 4,700 stores and 210 distribution centers."

Walmart has 31 existing dedicated e-commerce fulfillment centers and with the new centers said it will be able to reach 95% of the U.S. population with next- or two-day shipping.

What they're saying: "Together, this system of fulfillment assets is optimized to get orders to customers fast and efficiently," David Guggina, senior vice president of innovation and automation at Walmart U.S., wrote in a blog post.

Meanwhile, Axios' Hope King and Alex Golden report that Walmart is investing heavily to catch up as its own e-commerce business has grown, an area where Amazon has excelled.

Amazon had 253 fulfillment centers, 110 sortation centers, and 467 delivery stations in North America, not to mention hundreds of thousands of drivers and over 100 Amazon Air cargo aircraft, as of the end of 2021.

Amazon has been spending billions to open new physical stores.

The retailer is opening four "next generation" fulfillment centers by 2023.

Walmart box on conveyor belt in new fulfillment center

Walmart plans to open four new fulfillment centers by 2023. Photo: Walmart

NW Arkansas

Axios Northwest Arkansas

Walmart plans to open four new fulfillment centers that rely heavily on automation by 2024, the company announced today.

Why it matters: Where Amazon has excelled, Walmart is investing heavily to catch up as its own e-commerce business has grown.

Details: Walmart's upcoming fulfillment centers (where online orders are packed and shipped) will be the first of their kind for the company — given their combination of robotics, machine learning and people.

The retailer said it's working with Knapp, an international logistics provider, to not only largely automate what was a 12-step manual process into five steps, but also to double the number of orders a facility can fulfill in a day.

Part of the efficiency gained also means workers will no longer need to walk nine miles or more a day across a facility because products will be shuttled to them instead, the company says.

What they're saying: "[T]hese four next generation [fulfillment centers] alone could provide 75% of the U.S. population with next- or two-day shipping on millions of items," David Guggina, senior vice president of innovation and automation at Walmart U.S., wrote in a blog post.

Together with the company's 31 existing dedicated e-commerce fulfillment centers, Walmart says it will be able to reach 95% of the U.S. population with next- or two-day shipping.

And when taking into account its roughly 4,700 stores, Walmart says it could offer same-day delivery to 80% of the U.S. population.

In contrast: Amazon had 253 fulfillment centers, 110 sortation centers, and 467 delivery stations in North America, not to mention hundreds of thousands of drivers and over 100 Amazon Air cargo aircraft, as of the end of 2021.

The big picture: Both Amazon and Walmart have been spending to bulk up where the other has had the upper hand. 

While Walmart's spending billions on logistics and automation, Amazon's been spending billions to open new physical stores, particularly for groceries (where Walmart dominates).

Be smart: Online shopping experiences have become almost indistinguishable from one site to the next, so retailers have been battling one another for customer loyalty through free and fast shipping and returns.

What to watch: The new fulfillment centers will be located in Joliet, Illinois; McCordsville, Indiana; Lancaster, Texas; and Greencastle, Pennsylvania — with each planning to hire more than 1,000 new workers.

Walmart bulks up automation to compete against Amazon

Both companies are investing where the other has the upper hand.

an animated GIF of a robot making a box with the Walmart logo on it

A machine in a Walmart fulfillment center making a box. (Video: Walmart)

The unofficial start to summer has arrived and it's marked with patriotic parades, sales and cookouts.

Why it matters: Commemorating military personnel who died in service, many Americans get a day off to observe Memorial Day on Monday.

Nearly 60% of consumers said they don't expect any lingering COVID-19 effects on their weekend, according to a Numerator survey.

However, outdoor grill sales were slumping ahead of the holiday weekend, Axios’ Nathan Bomey reports, with grill masters Weber and Traeger posting first-quarter sales declines of 7% and 5%, respectively.

AAA predicts 39.2 million Americans will travel 50 miles or more from home this holiday weekend, nearly 90% of them by car, Axios' Joann Muller reports.

What’s happening: Walmart, Target, Home Depot and Lowe’s along with most major retailers are open — though some have limited hours.

Costco, which last week announced that it won't raise membership fees, is closed for Memorial Day while competing wholesale clubs, Sam’s Club and BJ’s Wholesale, are open.

The stock market and United States Postal Service also are closed Monday, as is Natural Grocers, a Colorado-based health food chain.

Restaurants open on Memorial Day include McDonald’s, Starbucks, Arby's, Popeyes, Taco Bell, Burger King and more.

The big question: Will record-high inflation impact Memorial Day shopping?

According to Numerator's survey, 84% of people are expecting an inflation impact on their Memorial Day shopping with 20% expecting it to be significant.

The beloved wholesale club rotisserie chicken is one of the rare items that hasn't had a price hike, but remember Costco is closed Monday.

Keep in mind: Before finalizing weekend shopping and dining plans, note that restaurants and stores do not always update websites with holiday hours, so calling ahead is advised.

Costco not raising membership rates or hot dog combo price

Walmart, Target, McDonald’s open Memorial Day; Costco closed

Don't expect mail or to shop at Costco this Memorial Day.

Walmart stores are open on Memorial Day. Photo: Getty Images

holidays

Private equity firm Ames Watson is levering portfolio company Lids with a new $250 million term loan to finance the private equity firm's acquisitions, it said Wednesday morning.

Why it matters: The new funding will help Ames Watson, which has a mix of long-term holdings as well as VC and PE investments, consolidate the retail and apparel industries.

Quick take: Goldman Sachs' global co-head of consumer retail Ben Frost predicted to Axios that both sponsor-driven transactions and apparel deals would both be prevailing themes in 2022.

Between the lines: Ames Watson tells Axios that the proceeds, more specifically, could be used for acquisitions of either add-ons complimentary to Lids or purchases of standalone platforms.

It gives the firm the ability to buy businesses with more than a billion dollars in revenue or a number of smaller companies.

Ames Watson focuses mainly on DTC, but is open to B2B opportunities, it added.

It plans to deploy over $250 million on acquisitions in 2022 with at least $20-$30 million on passive investments. 

Of note: Information also not included in the announcement is JPMorgan arranged the syndicated loan, while Wachtell, Lipton, Rosen & Katz served as  the legal adviser.

Details: Ames Watson tells Axios that Lids has $1 billion in revenue, which is double what it was three years ago.

It plans to grow that business by hundred of stores over the next two-to-three years.

The firm, owned by Lawrence Berger and Tom Ripley and founded four years ago, now generates $1.6 billion in total revenue.

Portfolio companies include Lids, Fanatics Lids College and South Moon Under.

Past passive investments include Fanatics, Watchbox, Hungry and The House of LR&C.

The bottom line: "We are very much a Berkshire Hathaway model, so the goal is to grow, generate cash and use that cash to purchase interesting businesses that we can transform and grow," Ames Watson said in an emailed statement, adding that it's a long-term investor that doesn't expect to exit businesses.

Ames Watson lines up $250M for deals via Lids

Ames Watson raised $250 million to finance the acquisitions.

Sections

Axios Local

Axios gets you smarter, faster with news & information that matters.

About

Subscribe

All Retail stories