Newsletter — September 12, 2024 | |
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POLICY
ECONOMY
POLITICAL NEWS
RETAIL THEFT & PUBLIC SAFETY
IN THE NEWS
TRENDS
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Washington voters to decide on key initiatives in November
Washington voters will soon have the opportunity to weigh in on four significant initiatives during the November 5 general election. Each measure addresses key areas of energy, taxation, climate policy, and social programs.
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Initiative 2066: This proposal would allow natural gas to remain an energy option in the state, preserving it as part of Washington's energy mix.
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Initiative 2109: If passed, this initiative would repeal the state's capital gains excise tax.
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Initiative 2117: Aimed at eliminating the Climate Commitment Act, this initiative would roll back the state's cap-and-invest program designed to reduce carbon emissions.
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Initiative 2124: This measure would give workers the option to opt in or out of the WA Cares program, a state-run long-term care insurance plan.
WR supports all four of these initiatives, citing the potential benefits for businesses and consumers. Voters will decide the outcome of these impactful measures on November 5.
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U.S. economy poised for soft landing, recession unlikely
The U.S. economy is on the brink of a "soft landing," avoiding recession despite a slowdown in growth and inflation, according to National Retail Federation Chief Economist Jack Kleinhenz. The Federal Reserve’s anticipated rate cuts signal positive adjustments ahead, as the economy continues to grow and inflation remains manageable.
Kleinhenz noted that despite a rise in unemployment and manufacturing slowdown in August, recent data has eased recession fears. Annual GDP growth for Q2 was revised upward to 3%, and consumer spending showed resilience with a revised 2.9% growth. Inflation, measured by the Personal Consumption Expenditures Price Index, held steady at 2.5%, close to the Fed’s target.
While job growth has slowed, with only 114,000 jobs added in July and unemployment rising to 4.3%, these figures remain within normal ranges. The Fed's expected rate cuts could bolster consumer spending and stabilize economic conditions, benefiting households and the housing market. Despite cautious consumer behavior, these factors are set to support spending and demand for goods and services throughout the year.
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WR Endorses Rep. Dave Paul (D-10) for re-election
This week, WR had the pleasure of attending a fundraising event for Representative Dave Paul (D-10) to officially present our endorsement and contribute to his re-election campaign. Rep. Paul has been a steadfast ally and champion for the retail industry, frequently serving as a bridge between parties on critical issues and demonstrating a solution-oriented approach.
The event was well-attended and featured Representative Liz Berry (D-36), who spoke in support of Dave. With a robust background in higher education, Rep. Paul currently serves as Vice Chair of the Transportation Committee and is a member of the Innovation, Community and Economic Development, and Postsecondary Education and Workforce Development Committees.
WR is excited to continue our collaboration with Rep. Dave Paul in the 2025 Legislative Session and encourages voters in the 10th District to support him on Election Day, November 5.
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WR supports Rep. April Berg’s (D-44) campaign
Crystal Leatherman, Manager of Local and State Government Affairs recently attended a campaign event for WR-endorsed candidate Representative April Berg (D-44) and presented her with a contribution from the Retail Action Council PAC. Representative Berg, who was elected in 2020, currently chairs the House Finance Committee and serves on the Joint Legislative Audit & Review Committee (JLARC).
The event provided an opportunity for attendees to engage with Rep. Berg and learn about her priorities for the upcoming legislative session, which include education, supporting small businesses, and expanding economic opportunities. WR looks forward to collaborating with Rep. Berg in the next session to advance policies that benefit Washington’s retail community and the broader economy.
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Seattle Council’s Public Safety Committee approves bills to disrupt drug and prostitution trade
The Seattle City Council’s Public Safety Committee approved two bills aimed at disrupting drug and prostitution activity in the city. Despite over an hour of public comments, largely against the proposals, the committee heard compelling testimony from two survivors of sex trafficking on Aurora Avenue North.
The first bill, CB 120836, sponsored by Councilmember Cathy Moore, would create Stay Out of Area of Prostitution (SOAP) zones, targeting individuals involved in promoting or purchasing prostitution. It also emphasizes providing additional support for victims of the sex trade.
The second bill, CB 120835, introduced by Committee Chair Bob Kettle, creates legal authority for the City to establish Stay Out of Drug Area (SODA) zones. Originally designating two zones, one in the Chinatown-International District and one downtown near 3rd and Pine, The Committee approved amendments to create additional SODA zones in Belltown, Pioneer Square, Capitol Hill, University District, and expand the Chinatown-International District zone. Another amendment from Councilmember Rob Saka, and drafted by Seattle City Attorney Ann Davison, requires judges to consider an offender’s residence, employment, and service locations when issuing SODA orders.
Both bills were unanimously approved (5-0) and will go to the full Council on September 17. WR expressed strong support for both pieces of legislation in a letter to the committee.
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Nordstrom family proposes $3.8 billion bid to go private
Erik and Pete Nordstrom, in collaboration with Mexican retail giant El Puerto de Liverpool, have submitted a $3.8 billion buyout proposal to take Nordstrom private. This move, valued at $23 per share, would return the Nordstrom family to a majority ownership position with a 50.1% stake in the company.
While the offer is currently under review by a special committee of Nordstrom’s board, it reflects a positive trend in retail—allowing companies to make strategic changes away from public market pressures. Nordstrom, a trusted name since 1901, was privately held for 70 years, and going private again could open doors for innovation and flexibility in a rapidly evolving retail environment.
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Kroger and Albertsons CEOs say merger will lead to lower grocery prices
During a federal court hearing in Oregon, the CEOs of Kroger and Albertsons emphasized the benefits their proposed $24.6 billion merger would bring, including lower prices for consumers. Kroger's Rodney McMullen and Albertsons' Vivek Sankaran testified that the merger would enable the companies to compete more effectively with major retailers helping them reduce costs and pass those savings on to shoppers.
McMullen assured that, if the merger happens, the day it closes will mark the beginning of price reductions for customers. He also noted that there are no plans for immediate store closures. Sankaran added that the combined resources would enhance growth, support existing stores, and strengthen union jobs, setting the stage for a more competitive grocery landscape.
The CEOs believe that merging will position their companies to better respond to industry changes, especially in the face of increased e-commerce and retail competition. Both leaders expressed confidence that the merger would create a stronger grocery chain, benefiting employees and customers alike.
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Holiday shopping trends: Debt, discounts, and digital dominance
This holiday season presents a unique set of challenges for retailers as shoppers face financial strain and shifting priorities. Consumers are increasingly relying on credit, with 37% using credit cards more and 32% turning to “buy now, pay later” options. Despite this, online order volumes have decreased, and shoppers are buying less, seeking out discounts, and favoring private labels.
Predictions for this season include a surge in the use of Chinese shopping apps, which are anticipated to capture $160 billion in global ecommerce market share. Middle-mile shipping costs are rising, adding pressure to margins, and online sales are set to peak on Black Friday, which is expected to see significant digital traffic. Retailers should prepare for a spike in online activity and use AI to enhance the shopping experience.
Additionally, loyalty programs will play a crucial role as customer acquisition costs rise. With 46% of shoppers prioritizing loyalty benefits, retailers should leverage customer data to offer personalized perks and exclusive deals. Adapting to these trends will be key for driving sales and maintaining customer engagement.
Salesforce.com
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Swipe fees hit $224 billion in 2023, highlighting urgent need for reform
New data from payments consulting firm CMSPI reveals that credit and debit card swipe fees charged by big banks and card networks reached a staggering $224 billion in 2023, a figure nearly 30% higher than previous estimates. The report, welcomed by the Merchants Payments Coalition (MPC), underscores the growing burden these fees place on small businesses and consumers. Jennifer Hatcher, Chief Public Policy Officer for FMI and MPC Executive Committee member, emphasized the need for Congress to introduce competition into the payments market to curb the rise in fees.
Visa and Mastercard swipe fees averaged 2.94% per transaction, significantly higher than previously reported. These fees, often the second-largest cost for retailers after labor, contribute to increased prices for consumers—estimated at around $1,700 annually for the average family. The Credit Card Competition Act, currently under congressional consideration, aims to reduce these fees by mandating that major banks offer alternative processing networks, which could save merchants and consumers $16 billion annually.
As swipe fees continue to escalate, this new data highlights the critical need for legislative action to introduce competition and lower costs for businesses and consumers alike.
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WR diversity statement
WR is committed to the principles of justice, equity, diversity, and inclusion. We strive to create a safe, welcoming environment in which these principles can thrive.
We value all people regardless of race, ethnicity, gender, religion, age, identity, sexual orientation, nationality, or disability, and that is the foundation of our commitment to those we serve.
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Renée Sunde, President/CEO — 360.200.6450 — Email
Mark Johnson, Sr. VP of Policy & Government Affairs — 360.943.0667 — Email
Crystal Leatherman, State & Local GA Manager — 360.200-6453 — Email
Rose Gundersen, VP of Operations & Retail Services — 360.200.6452 — Email
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