April 17, 2017


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MnRA Board Chair Ruthena Fink, Grand Jete, addresses attendees at
the Retail Day At The Capitol kick-off breakfast in March.
Legislature 
Governor Sends 179 Pages Of Feedback On Budget Bills To Legislative Leaders      
 
Earlier today in what some might characterize as the beginning of budget negotiations or steps toward a stand off, Governor Mark Dayton sent a letter to legislative leaders "outlining their concerns with budget bills."

The letter stipulates that if agency operating budgets are reduced, the Governor requires a specific list of the programs and services that the Legislature would see reduced or impacted.

In addition, in the letter, the Governor states that agency commissioners will be active in budget bill negotiations, along with DFL leaders.

Read the full letter here. 

Trends
Imagining The Retail Store Of The Future      

From the New York Times, Elizabeth Paton, April 12, 2017

" What will the store of the future look like? Will we be served by fleets of gleaming robots, using built-in facial recognition technology to adjust each sales pitch to a person's current mood or past spending preferences?
Will there be voice-activated personal assistants, downloading the availability, color and fit of any and every garment to your smartphone? Three-D printing stations? No checkout counters when you leave? Could there even be floating, holographic product displays on the shop floor that change when a customer walks by?

Perhaps shoppers will make all their purchases from their own home, using virtual fitting rooms via virtual reality headsets. Drones will then drop deliveries in the backyard or on the front steps.

As fanciful as these innovations may sound, none are hypothetical. All exist, are being tested and could be rolled out in as little as a decade. But is this the sort of shopping experience that customers really want?

Scores of leading retailers and fashion brands increasingly say no. And in an ever-more-volatile and unpredictable shopping environment, where long-term survival is dictated by anticipating and catering to consumers' desires (often before they themselves even know what they want), the race to find out how and where people will do their spending has started to heat up."

 
Local
More Than Half Of Minneapolis' City Council Support $15 An Hour 

From the Star Tribune, Adam Belz, April 11, 2017

"A $15 minimum wage that makes no exception for tipped workers has gained enough City Council support to earn passage into law in Minneapolis.

Such a proposal would win at least the necessary seven votes on the 13-member council, members said this week, which would make Minneapolis the latest in a string of major U.S. cities to pass a dramatically increased municipal minimum wage.

There is no ordinance for the council to vote on yet and there won't be until at least May. But the minimum wage has been a central issue in the campaign leading to November's city elections, and Minneapolis council members - almost all of them on the ballot - are taking firm positions ahead of the DFL conventions that start in late April.

"We are building momentum to pass one fair $15 wage this summer," said Council Member Lisa Bender. "The public pressure on this issue is increasing. I think we will pass a strong policy."

Details such as when the higher minimum wage would take effect, whether small businesses would be exempt and whether the ordinance would allow for a lower youth wage will be up for negotiation."

Sales
Commerce Report: Core Retail Sales Fell 0.2% In March  

From the Retail Dive, April 17, 2017

"The economy continues to throw up surprises. Economists continue to believe that consumer confidence remains steady, if marked by uncertainty injected by the political climate, according to the University of Michigan Surveys of Consumers.

"Various factors were at play in the first quarter, but we are again seeing a pattern similar to previous years - consumer spending was weak but is expected to pick up as we move through the year," NRF Chief Economist Jack Kleinhenz said in a statement.

The first few batches of retail sales numbers come as many brick-and-mortar retailers are facing significant existential challenges to their businesses. Any slip in overall retail sales is only worse for brick-and-mortar retailers, as they continue to lose market share to e-commerce retailers. E-commerce has been taking a disproportionate share of retail growth at the expense of the traditional brick-and-mortar retailers.

The most vulnerable retailers are on thin ice in this environment. Already this year we've seen several retailers - including teen apparel retailer Wet Seal and women's apparel retailer The Limited - succumb to bankruptcy. The number of retailers who have filed for bankruptcy this year - 9 at last count at the end of March - has already equaled the total number of retail bankruptcies for 2016 and is on pace to for the highest year on record since the recession.

In particular, the consumer price index decline was a surprise that suggests that retailers may have trouble boosting prices. "A lack of pricing power continues to plague the retail industry," Kleinhenz said. "There is no doubt that weak pricing power led to the bumpy period for retailers in the first part of this year.""

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Minnesota Retailers Associaiton
400 Robert Street North, suite 1540
St. Paul, MN 55101
Tel. (651) 227-6631 - mnretail.org - mnra@mnretail.org