retail news in context, analysis with attitude

With brief, occasional, italicized and sometimes gratuitous commentary…

•  The Los Angeles Times reports that "California’s minimum wage for all employers will rise to $15.50 an hour in January, advisors to Gov. Gavin Newsom said Thursday, the first time that rising inflation has triggered a provision of a 6-year-old state law governing automatic pay increases … The state’s minimum wage for large employers is currently $15 an hour, with employers that have fewer than 26 workers paying $14 an hour. Both pay levels went up in January, the presumed final step envisioned by a 2016 state law that gradually increased wages — in most years, by one dollar an hour. Small businesses were given more time to raise their pay."

The times writes that "the announcement came one day before Newsom unveils a revised state budget plan, a new spending proposal for state government that relies on an updated economic forecast and one that will offer rental assistance and cash rebates to struggling Californians."

I'm sure there will be a lot of pushback on this from smaller retailers who believe that this will raise their costs to the degree that it will be hard to be profitable.  But maybe it would help not to think about it as a cost.  Think about it as an investment, and figure out ways to make the extra money deliver an ROI that makes the store more competitive, not less.



•  Howard Schultz must have faith in his ability to return Starbucks to past glories in his third go-round as CEO - Seeking Alpha reports that he "scooped up $10 million worth of the coffee shop chain's stock this week.  Schultz purchased 137,500 shares on Tuesday in two transactions for prices of $72.61 and $73.10 a share, according to a regulatory filing."

Schultz is no dummy - beyond his belief that he can fix a number of Starbucks' problems, he also knows that the company's stock has been trading at a 52-week low, and this might be a good time to get back in at a lower floor.



•  WWD reports that "in a pop-up format, Nordstrom Local is headed to the Hamptons.

Nordstrom Local will occupy an 850-square-foot site at 395 Country Road in Southampton, from Memorial Day weekend to Labor Day weekend.

"The pop-up will provide pickups of online orders made on nordstrom.com and nordstromrack.com, returns, alterations, fashion advice from a stylist and gift wrap, and also take in used clothing and shoes for donations to Housing Works, and empty beauty packaging for recycling."  The story notes that "Nordstrom Locals are service hubs to make shopping more convenient and are not merchandised with products for shopping.

"There are seven permanent Nordstrom Locals — two in Manhattan and five in California, including two in Los Angeles and one each in Manhattan Beach, Newport Beach and Santa Monica."

I've always been a big fan of the Nordstrom Local format - it strikes me as a perfect example of how a big store format can take advantage of the e-commerce trend to expand its footprint in meaningful and tangible ways.  Just the definition of the format as a "service hub" gives voice to the company priority of providing high service levels beyond its traditional bricks-and-mortar presence.