Chinese language shoppers decide favourite electrical automobiles from China, US, Germany

Stephan Wollenstein, CEO of Volkswagen China, will present the new ID.6 Crozz electric car at the Shanghai International Automobile Industry Exhibition on April 19, 2021.

Hector Retamal | AFP | Getty Images

BEIJING – When it comes to their favorite electric car brand, Chinese consumers’ first choice is Warren Buffett WORLD, according to a survey by Bernstein.

Elon Musks Tesla Germany is in second and third place Volkswagensaid Bernstein. The company cited the latest results from a regular survey of Chinese consumers in the third quarter of recent years. This year’s survey, released on Thursday, had around 1,600 respondents.

Most of the respondents lived in China’s larger cities, with an average age of 32 and a monthly income of about 19,000 yuan (2,969), according to the research company.

Almost half of those surveyed said they would consider buying an electric vehicle for their next car purchase.

Intention to buy an electric car from a Chinese start-up like Nio or Xpeng doubled this year to around 9.5% of those surveyed, compared to around 5% in recent years.

Read more about electric vehicles from CNBC Pro

Chinese startups ranked first in the “Upper Mass & Premium” segment of the electric car market, which covers cars costing at least 150,000 yuan ($ 23,437). The next favorite in this segment was Tesla, followed by German premium brands like BMW and Audi, according to the survey.

But for cars of all categories, German premium brands ranked first, followed by Japanese brands Toyota, Honda and Nissan, and Chinese brands like BYD and Geely, the report said. Start-ups with electric cars took sixth place in this category.

China is the largest auto market in the world and many European auto companies make up the country Starting point for their foray into electric vehicles.

Costco, Nike and FedEx are warning there’s extra inflation set to hit shoppers as holidays method

A worker wearing a protective mask removes

David Paul Morris | Bloomberg | Getty Images

Delivery bottlenecks, which have led to rising freight costs, are a vacation headache for US retailers.

Cost co This week joined the long list of retailers on the alert about rising shipping prices and the associated supply chain problems. The warehouse clerk who a similar cautionary note in MayThe sportswear giant joined her Nike and economic pioneers FedEx and General mills when discussing similar concerns.

The cost of shipping containers overseas has increased in recent months. Getting a 40-foot container from Shanghai to New York cost about $ 2,000 a year and a half ago, just before Covid pandemic. It is now around $ 16,000, according to Bank of America.

In a conference call with analysts Thursday, Richard Galanti, Costco’s chief financial officer, called freight costs “permanent inflationary items” and said these increases are being combined with things that are “somewhat permanent” to add to the pressure. This includes not only freight, but also higher labor costs, increasing transport and product demand as well as scarcity of computer chips, oils and chemicals and higher raw material prices.

“We can’t hold onto all of this,” said Galanti. “Some of it has to be passed on, and it is passed on. We are pragmatic about it.”

To quantify the situation, he said inflation is likely to be between 3.5% and 4.5% for Costco. He noticed that Paper products saw cost increases of 4% to 8% and cited shortages in plastic and pet products that are driving prices up from 5% to 11%.

“We can hold the line on some of these things and do a slightly better job – hopefully a better job than some of our competitors and even more extreme than value,” said Galanti. “So I think all of these things have worked a little in our favor so far, at least despite the challenges.”

Prepare for the holidays

However, the timing is not good.

Persistent inflationary pressures come at a time when retailers prepare for the Christmas shopping season – Halloween, Thanksgiving, and Christmas, then the New Year. The pandemic brought it about a relentless array of factors After a generation of mostly moderate price pressure, this has made inflation an economic catchphrase.

Companies are forced to deal with the situation before a critical phase.

“We’re approaching the holidays, we’ve worked with retailers, and we see that # 1 they need to be flexible with their supply chain,” said Keith Jelinek, executive director of global retail practice at consulting firm Berkeley Research Group. “We noticed an increase in the cost of goods, especially for clothing, including the cost of inbound shipping with the cost of containers, increases in transport, truck transports to get to distribution centers.”

“All of these costs will weigh on operating profit,” he added. “Retailers are currently facing the challenge of how much I can pass on to the consumer, or how I can get other efficiencies out of my operations to meet my overall margin.”

Many companies have signaled that consumers are ready, at least for now, to accept higher prices. Trillions of government incentives during the pandemic helped increase personal wealth Household net worth increased by 4.3% in the second quarter.

In the company’s conference call on Thursday, Nike CFO Matthew Friend referred to the price increases in the second half of the year, as well as “more than expected full price realization” and “additional transportation, logistics and air freight costs to move inventory in this dynamic environment”.

Nobody knows how long consumers will be willing to pay higher prices. Jelinek said he anticipates the current situation will last at least during the holiday season and until early next year

“There is only a limited amount that you can give to consumers,” he said. “What most retailers do is think about theirs [profit and loss statements] and they want to improve performance and optimize efficiency. That means really focusing on your supply chain. “

It also means raising prices.

Corporate warnings

FedEx announced this week that it will add 5.9% to the shipping cost for domestic services and 7.9% for other offers. The company said it was hit by labor shortages and “costs related to the challenging operating environment”.

The head of the company’s main competitor admitted the hurdles the business is facing.

“The job market is tight and in certain parts of the country we have had to make some market price adjustments to respond to market demands.” UPS CEO Carol Tome said on CNBC’s Thursday, “Closing bell. “

She added that the company was also affected by supply chain issues.

“I’m afraid this will continue for a while. These problems have been a long time coming and we must all work together to remove these blockages, ”said Tome.

Federal Reserve officials this week admitted that inflation will be higher in 2021 than they expected. However, you can still see that prices will settle in a more normal range of just over 2% in the years to come.

But Cleveland Fed President Loretta Mester said in a speech on Friday that she saw “upside risks” for the central bank’s inflation projections.

“Many companies report that cost pressures are mounting and consumers are willing to pay higher prices,” she said. “The combination of strong demand and supply chain challenges could last longer than I expected, leading people and businesses to raise their expectations of future inflation more than we have seen before.”

Fed officials said they were ready to withdraw monetary stimulus They provided during the pandemic, but prices are unlikely to increase anytime soon. However, if prices and expectations stay higher, Mester said, Fed policies would have to be “adjusted” to control inflation.

Become a smarter investor with CNBC Pro.
Get stock picks, analyst calls, exclusive interviews and access to CNBC TV.
Sign in to start one Try it for free today.

Walmart launches supply enterprise to attach different native retailers with shoppers

Walmart announced Tuesday the launch of a delivery service called GoLocal that will move goods from other local retailers to consumers.

The company said it expects delivery to begin in late 2021 and that the delivery fleet will include newer technologies like self-driving vehicles and drones.

“It’s about bringing the skills we at Walmart have focused on building and connecting for our own customers to life for local and national businesses,” said Tom Ward, senior vice president of Last Mile at Walmart CNBC.

Walmart said GoLocal will be a white label service, which means deliveries will not be made on Walmart-branded vehicles. The company said it will offer two-hour shipping at competitive prices, as well as a two-day delivery option. Deliveries are handled by a combination of staff, gig staff, and sometimes other delivery companies.

Walmart is currently partnered with FedEx for online parcel delivery. The company wouldn’t say if FedEx is being used for GoLocal.

However, Ward said the company will find innovative delivery partners including Cruise, a self-driving electric vehicle startup that the retailer invested in last year, as well as Waymo and Nuro. The delivery of drones will also be a focus Partners like DroneUP, another company Walmart invested in last year, as well as ZipLine and FlyTrex.

“We’re excited to have all these different disruptive technologies as we scale up that bring the final mile together at Walmart,” said Ward.

Walmart has spent the past five years building its ability to deliver goods to customers. In August 2016, it acquired the e-commerce start-up for $ 3.3 billion. In March 2018, Walmart launched its Grocery delivery serviceTo fulfill orders from Walmart stores. The company started Walmart Fulfillment Services in February 2020 to compete with the growth of marketplace-centric websites like Amazon and Shopify.

The company closed down in May 2020, but CEO Doug McMillon credited the acquisition Supporting Walmart in expanding its delivery network.

Amazon has a similar service called Amazon shipping, in 2018 designed to compete with UPS and FedEx, however it has stopped working in June 2020.

David Vernon, senior transportation analyst at Bernstein, said a retailer’s local delivery service was unlikely to have a significant impact on FedEx and UPS revenues.

“The local delivery market has 230,000 companies competing in every city across America,” Vernon told CNBC. “There are two national packet networks. They have some overlap; business is shifting towards part of this local business. But in the long run, it’s not exactly the same.”

GoLocal already has contracts with a number of national retail customers, according to Walmart, and will begin accepting applications for new partners starting Tuesday.

Covid customers did nice job paying bank card debt. It will probably’t final

Santiaga | iStock | Getty Images

Ask a consumer expert what would happen with credit card loan balances during a recession and the answer wouldn’t be that balances decline sharply and Americans avoid a wave of card delinquencies.

But that’s what happened during the pandemic year. Helped by government stimulus and limited to spending on necessary goods rather than discretionary items, consumers bucked economic downturn history when it comes to credit card debt.

It’s been an upside down credit environment,” said Stephen Biggar, who covers financial institutions at Argus Research. “If you told me the market was going to crash 40% and we would have 20% unemployment, you would have also said card delinquency rates would go through the roof, particularly for the lower-end consumer.”

The savings rate spiked to a level not seen since World War II, and that caused consumers to take the cash they had and pay down debt — and often the first kind of debt they paid down was cards, which have among the highest interest rates, averaging 16%. 

According to Experian, from Q3 2019 to Q3 2020, credit card balances fell 24%. Among active credit card holders right before the pandemic, 58% carried a balance month-to-month, an interest-rich pool for card issuers that is now down to a record low of 53%, according to the American Bankers Association.

“Lots of people made lots of progress paying down debt and we would not have thought that at the outset of the pandemic,” said Ted Rossman, senior industry analyst at

But even paying down significant debt, the average balance on a card is still above $5,000, and there are signs the pay-down surprise may be nearing a reversal.

“I think we are at the tail end of that,” Biggar said. “Once government stimulus ends, then we get a consumer mostly on their own holding their debt capabilities up.”

Government stimulus checks that came in multiple batches are slowing, though child tax credits to those at lower-income levels and unemployment tax refunds continue. Enhanced unemployment already has been ended in many states and will end in early September for the rest.

And, most importantly, consumers want to spend.

$2 trillion in ‘forced savings’ ready to be unleashed

“There is a lot of money, a lot of savings and they are out spending it,” Rick Caruso, founder and CEO of real estate company Caruso & Co. which develops malls and resorts, recently told CNBC. “They’re shopping, dining, they are going to the movies and they are doing it consistently. $2 trillion of ‘forced savings’ is just starting to get unleashed.” 

For now, consumers still have leverage and the cautious financial habits formed during the pandemic remain in evidence.

Payment rates continue to be high given the trillions in cash and savings. Loan growth in the card industry is down double-digits in most consumer assets over the past year since, according to Kevin Barker, a Piper Sandler senior research analyst covering consumer finance companies, and savings rates are still double the run rate pre-pandemic.

The course of the highly contagious delta variant remains a wildcard in this picture as well with a recent estimate that as many as one million Americans are being infected daily. But there are some signs that the priority consumers have made of paying down debt during the pandemic is beginning to give way to a focus on spending again, including travel and entertainment, as stimulus is wound down. “There is a feeling now that perhaps we are staring to see a reversal, the early stages of it,” Rossman said.

A survey found 44% of people saying they are willing to take on debt in the second half of 2021 for non-essential purchases, which are mostly out of the home activities such as dining.

The Federal Reserve’s G.19 report covering consumer credit for the month of May found that credit card balances went up 11% from April to May, the largest jump in five years, on an annualized basis. 

“Either old habits die hard or new habits take hold and consumers continue to say ‘let’s pay down even more debt,” Rossman said. “I want to say it’s the latter as a consumer advocate,” but he added that history doesn’t give him confidence.

The historical pattern that played out around the Great Recession a decade ago reinforces the theory that it takes a big crisis to bring credit card debt down, and that it won’t last. Credit card balances fell 20% from 2007-2014, but from 2014-2019, balances rose by 41%, according to NY Fed household credit data.

“The point is, the same thing will happen this time, but much more rapidly. It’s one area where consumers don’t want a V-shaped recovery,” Rossman said.

Where bank CEOs think economy, consumer debt is headed

“The pump is primed,” JP Morgan Chase CEO Jamie Dimon said during the Wall Street bank’s recent earnings call. “The consumer, their house value is up, their stocks up, their incomes are up, their savings are up, their confidence up.”

Asked by analysts where loan growth and payment rates are headed, Wells Fargo chief financial officer Mike Santomassimo said activity “has really picked up” but it hasn’t translated into bigger loan volumes given the payment rates. “Payment rates are still really high, and I think they’ll come down and normalize eventually.”

Card issuers make money on card transactions, but loans are the bigger part of the equation. And because interest rates on credit cards are so high relative to other loans, it plays a big role in the key bank metric of net interest margin.

From a consumer perspective, the message is to keep that momentum going. … resist the temptation to put a fancy vacation on a credit card. It’s no fun to pay 16%.

Ted Rossman, senior analyst

Credit card businesses have net interest margin as high as 10% versus the average bank debt at 3%, though defaults are historically significantly higher than other loans. And unlike other forms of debt, the average rate charged to customer stays at 16% even when underlying rates come down.

“Diversified banks face pressure on mortgages and other interest rate products but you are not going to find a 13% interest rate credit card,” Biggar said.

In fact, in recent years the margin on cards has been “creeping up,” according to Rossman, with a prime rate at 3%. 

At Bank of America, the number of cards outstanding hasn’t changed notably, but there is roughly $20 billion less in balances. “People didn’t get any different,” Bank of America CEO Brian Moynihan told analysts after its earnings. “They just have more cash. And so they paid off their credit cards, which is a completely responsible thing for them to do.”

“When they can get out and spend more money, which is starting to happen, I think you’ll see them use these lines, short-term purchases,” Moynihan told analysts. “Yes, the pay rate’s up, but I don’t think it’s a fundamental difference of behavior. It’s just the opportunity to use the cards for activity has been limited coming into this quarter when you finally saw things open. So we’ll see where it goes, but the good news is it’s going in different direction.”

Card business in a ‘sweet spot’

Banks need the consumer to be strong, and in fact, the silver lining of the debt pay down phenomenon during the pandemic was the stronger credit profile of banks, with the surprisingly low level of card charge-offs and excess reserves on the balance sheet.

“The pandemic played out well for card companies,” Barker said. “The losses they anticipated didn’t materialize and credit performance is a primary driver for these stocks.”

“Card businesses are in a sweet spot,” Biggar added. “Some of these estimates will be moving up dramatically when these guys beat a quarter by $7.71 versus $4.61, like Capital One did. Its almost a $3 beat.”

From a valuation perspective, and given the reserve levels, the card-focused financial stocks are trading at peak price to book value.

“High payment rates are continuing to contribute to strikingly strong credit results,” Richard Fairbank, CEO of Capital One Financial, which similar to rival Discover Financial has a much more concentrated business in cards than the more diversified Wall Street banks, told analysts. “We actually are always happy when our customers are paying at high levels, and it’s indicative of a healthy consumer, and those high payment rates correlate with the really strong credit results that we continue to see.”

For Capital One, domestic card purchase volume for the second quarter was up 48% from the second quarter of 2020, but the card charge-off rate for the quarter was 2.28%, a 225-basis-point improvement year over year.

A behavioral shift and acceleration of card usage

For the banks, the current level of financial responsibility is not necessarily the most profitable. And the banks are betting that the consumer cash cushion won’t last forever, and people will take on more debt to spend.

“That is the most likely next phase of the credit cycle,” Barker said. “We are seeing spending up 20% in some categories. Right now, the default is to go with the historical pattern and the consumer goes back to way it was.”

A bigger behavioral shift in the way people treat debt or how they spend money can’t be ruled out, Barker said, but he added, “They want to spend and travel a certain way and they will do it because that’s the way they operated for a long time.”

The monthly numbers show an easing in payment rates, but Capital One’s Fairbank stopped short of saying it’s a trend.

“It would be a natural thing that payment rates would ease a little bit here and that also credit metrics would move toward normalizing a little bit. I would say we’ve seen the earliest of indications of that still running at really quite a breathtaking level,” Fairbank said. He told analysts that while the timing of the trend remains speculative, the direction is clear: “There’s really only one way for the credit to go from here.”

The cyclical pattern implies that people who have jobs take on more debt, and then might lose a job and have more trouble paying back, and credit loss rates return closer to normal.

“I don’t think it goes back to 2019 consumer loss levels, the consumer is in pretty good shape,” Biggar said. “But at the lower levels there is always churn. Every day it is harder to make ends meet and inflation is a huge topic, from car prices to home prices to food prices and gas prices. Everywhere you look it’s problematic for lower income levels. The default rates moves back up.”

One major pandemic change is likely to be permanent, and is going to serve as a tailwind for the card business. Card spending accelerated during the pandemic relative to cash and checks, and though that was a secular trend already in place, like many pandemic shifts linked to technology and digital, it accelerated. That was beneficial for many companies in the payments space, from PayPal and Square to Visa and Mastercard and the card issuers.

“Aside from the cyclical aspect of credit losses, we’re just seeing enormous opportunity in cards. Lots of teenagers never carry cash any more,” Biggar said.

Risks to aggressive card companies and to the consumer

Card marketing and competition is getting more aggressive, and CEOs like Capital One’s Fairbank are preparing for it.

“We see competition heating up all around us, especially in rewards. … you see it in the marketing and the media activity. We see it in direct mail numbers. We see it in the rewards offerings and the heating up of some of that. The competition is intense right now …. but it’s not yet irrational,” Fairbank said.

Analysts say there is a big opportunity in the card space and the big banks, while having made major gains in trading and investment banking and other businesses in the past year — while being more cautious on cards given expectations of defaults — now see the growth and the higher net interest margin from cards at a time when the charge off rates are historically low, and are unlikely to double or triple in a good economy, which translates into an opportunity.

“The big banks may not be as aggressive as card companies like Capitol One or Discover, but JP Morgan won’t fall asleep at the switch with its credit card business either. Wells Fargo is coming out with more offers. It’s a big pie and I think there is lots of room for growth,” Biggar said.

“We’re clearly seeing more competition, being aggressive going after accounts right now, because if you are a card lender you are looking at a consumer who has a high savings rates, income is higher and is a better credit counterparty more likely to pay you back,” Barker said. “And they are being more aggressive because the industry is awash in capital looking for a way to be spent and for the best way to grow. “

With the bets being placed by both card companies and consumers at a time when a lot of the data is atypical and after an unprecedented year, there are risks on both sides.

How the consumer spending normalizes in the years ahead is an unknown, as is the strength of the economy and direction in rates, which can trip up both the banking sector and consumers.

If rates rise too quickly the consumer could quickly be back in a tough spot, but banks have a vested interest in making sure consumers are doing well because they need those loans to be paid back.

“The longer this persists, the more competition will likely be to extrapolate these trends to inform their decision making,” Fairbank told analysts. “And this can embolden them to make more aggressive offers, market more intensely and a particular one I worry about, loosening underwriting standards. And in this particular environment, the benign rearview mirror could encourage lenders to reach for growth. And it could be exacerbated by credit modeling that relies on consumer credit data that, frankly, may be very unique to the downturn and not as good for predicting where credit performance is going to be over time.”

That’s a potential problem for banks, and their shareholders, but also for the consumer.

The real sweet spot, and the most profitable for the card issuers, is if consumers carry debt month-to-month as they pay the banks back. All the outstanding balances are not good for the banks if they have to write them off, or if consumers continue to pay balances in full every month, but if consumers are making minimum payments it provides banks the interest month after month that is the most profitable way for them to get paid back.

“The longer you take, the more money they make. If people are spending freely and running up debt, even if it’s not the wisest thing for consumers, it’s probably the most likely,” Rossman said. “From a consumer perspective, the message is to keep that momentum going. If you paid down debt from $6,200 to $5,300, bring it lower still; resist the temptation to put a fancy vacation on a credit card. It’s no fun to pay 16%.”

It’s a hard message to make stick. “I would like to see the newfound frugality last, but we’ve seen this in the past,” Rossman said.

Complaints in opposition to cell cost apps like Zelle, Venmo surge 300% as customers fall sufferer to more cash scams

Complaints against some digital payment services and apps like Venmo, Cash App, or Cell are soaring, according to a disturbing new report.

Non-Profit Research Group of Public Interest in the United States [PIRG] Major issues include fraud, problems using accounts, and poor customer service. The group analyzed more than 9,200 complaints filed with the Consumer Financial Protection Bureau from 2017 to April 2021.

The report found that more than 2,700 complaints were filed from January to April this year – compared with just over 600 in the same period last year.

Around four out of five Americans use mobile payment apps.

One of them is Luke Krafka, a professional cellist from Long Island, new York. Krafka often plays in concerts with rotating musicians who are usually paid for in cash – and he says mobile pay apps made this task a lot easier.

“Paypal, Venmo, Cash-App, yes. There is no paper, no checks, no waiting,” he told the CBS News Consumer Investigative Correspondence Anna Werner. “You get paid instantly, go to your bank account.”

Trending news

In October 2019 a new customer got in touch to hire him for a wedding.

“It was a normal wedding. And I reached out to my friends who are good for the gig, ”he said.

The customer told him he would send a check for about $ 1,000 for Krafka and another $ 950 to pay for the customer’s “Sound Man” – which he then asked from Krafka via a mobile payment app.

“I said, ‘Look, if you send me the money, it’s not a problem, that’s fine,'” Krafka remembers.

Mobile payment apps allow users to pay others instantly, via Bank accounts or credit cards connected to the app.

Their simplicity is usually a good thing, but not always, as Krafka found out after depositing the wedding clients’ check for $ 1,960.

“I checked the next day and the full amount was in my bank account,” he said.

Then, as requested, he sent the customer’s “soundman” $ 950 via the cell payment app.

“I think it was the next day that the check broke,” he said. “And when that happened, I slowly started putting it all together.”

The people who supposedly hired him stopped answering his calls – and he’d lost the $ 950.

“I said I think I was betrayed,” said Krafka.

PIRG’s report addressed over 9,000 complaints to federal regulators about digital wallets and payment apps, including PayPal, Venmo, CashApp, and Cell.

They found that those filed between January and April this year were more than 300% higher than the same period last year – with many losing money to fraud or fraud.

“If it’s a scammer, he won’t come back,” said Ed Mierzwinski, who oversees the PIRG’s federal consumer program.

Unlike credit or even debit cards, app transactions are instant, Mierzwinski said.

“There are no rules that protect you very well when your money goes from your account to someone else’s account,” he said.

It is especially difficult when the betrayed user initiated the transaction.

Krafka said he reached out to his bank to get the money back but was told they couldn’t help him.

“I was surprised that there was no legal recourse and that when it is finished it is finished and there is nothing more to be done,” said the professional musician.

Cell did not want to comment on Krafka’s case, but said his top priority was “protecting consumers from fraud and fraud”. The company offers a comprehensive list of recommendations on the website so that consumers can protect themselves.

Cash App has a consumer help center online and on their mobile app as well as a 7 day one Customer service phone number, and encourages people, “If you think you may have been a victim of fraud, contact Cash App Support immediately through the app or website.” They also offer articles about recognize and avoid Scam on their website.

Venmo and Paypal are challenging consumers who think they did fallen victim to fraud to “contact customer service directly”. They provide resources on what to look for and how to report it on your website.

“We also recommend that customers get in touch to share information about suspected spam. Our dedicated security team will review the information and take action if necessary, “the company website says.

All of the app companies told CBS News that they are working to stop bad actors and have processes in place to spot scams. They also warn consumers to be vigilant and only send money to people they know – not strangers.

Customers can be spending extra on mother

On this Mother’s Day, it’s more like breakfast in bed than an opulent buffet.

Although consumers are expected to spend more on their mothers this year, the celebrations will likely still take place at home, despite rising vaccination rates.

“There are more people planning a Mother’s Day brunch or a special getaway, but we’re not where we were before the pandemic,” he said Katherine Cullen, Senior Director, Industry and Consumer Insights, National Retail Federation. “I think consumers are still reluctant to plan these types of activities.”

In a recent survey by the trade group, only about half of the 7,818 consumers surveyed said they were planning a special getaway for their vacation, although consumers expect to spend more money on the occasion.

With caution, many restaurants offer brunch and dinner menus for Mother’s Day, which you can pick up or prepare at home.

“I’ve seen many restaurants that have a Mother’s Day deal that gives you all the ingredients. It can be partially assembled and you take it home and heat it and you can have a restaurant-quality meal at home.” “Said Cullen.” I think a lot of these trends and services will stay here. “

Flour, a bakery with nine locations and a commissioner’s kitchen in Boston, has special Mother’s Day menu options, including frozen, ready-to-bake buns and cinnamon rolls that can be picked up in-store. There’s also a second menu for items, including a coconut cake, which can be shipped across the country.

“We’re making a Mother’s Day gift box that we don’t normally sell and that is very popular for e-commerce,” said Holly Najdzin, senior operations support manager at Flour. The box contains homemade muesli, a crunchy butter toffee, sable biscuits, English breakfast tea, a tea towel and a mug for Mother’s Day.

Flour also offers virtual baking classes that can be offered as gifts, with the option to send the ingredients to the recipient for an additional charge.

Numerous other online courses are also available. For example, offers workshops that teach you how to arrange flowers or make a sausage board. Both were popular Mother’s Day gifts this year.

“Live streaming experiences are also increasing compared to years before the pandemic as consumers try to connect with their mom virtually or simply from the comfort of their homes,” said Chris McCann, CEO of

Americans plan to spend an average of $ 220.48 on celebration plans and gifts for Mother’s Day from April 1-9 this year, according to the NRF poll. This brings the total expected spend for Mother’s Day to $ 28.09 billion.

It’s also an average of $ 15.74 more than consumers for 2020 and $ 24.01 more than planned for 2019.

“This is the highest anticipated Mother’s Day output we’ve seen since we started this survey over a decade ago,” said Cullen. “It’s really about giving things instead of gaining experience.”

After the greeting cards, consumers are most likely to buy flowers. 68% of respondents say this is part of their plan.

“Mother’s Day is the biggest flower holiday of the year and our brand expects approximately 23 million stems to be shipped for the holiday,” said McCann.

Due to the shortage and higher transportation costs, buyers may spend more on flowers this year. Some florists say consumers should be ready to accept replacements as well Pay up to 25% more According to media reports than last year.

“The farms that don’t know how to plan for this year have cut their workload and there is some fighting going on,” McCann said.Squawk box“on Thursday.” That, along with some weather conditions, has created the challenge we see in the flower industry today. “

1-800-Flowers said it was able to secure enough flowers to meet its demand.

McCann said he also sees greater demand for gifts for groceries, and NRF’s Cullen said consumers intend to spend more on jewelry.

“Despite all the difficulties that Covid has caused, despite all the uncertainties, consumers are really enjoying moments when they can celebrate,” said Cullen. “And we’ve seen that in pretty much every vacation and special event during the pandemic.”

ThredUp will attraction to middle-income shoppers who can be spending cash on clothes post-COVID

ThredUp Inc. features analysts who say the company is poised to grow in the red-hot resale market.

TDUP, + 8.78%
is a Online second hand dealer that began to act 26th of March.

KeyBanc Capital Markets has initiated ThredUp shares overweighted with a price target of USD 22.

“[W]We believe ThredUp is well positioned as middle class consumers turn to apparel spending, ”wrote analysts, led by Edward Yruma.

Analysts and investors have turned their attention to spending behavior as the vaccine rollout continues. Clothing sales It is expected that this will be one of the areas that will get a boost after the end of the pandemic.

With prices roughly 40% below retail, the ThredUp marketplace offers middle-income buyers the opportunity to buy more at better prices.

ThredUp will also benefit from repeat business, according to the data compiled by KeyBanc.

Read: ThredUp CEO on IPO Day: Don’t Control Resale and Amazon’s Speed ​​is a Fading Trend for Young Buyers

And: America is slated to reopen on July 4th, and restaurants are poised to capitalize on the desire to “come out and gather,” says JPMorgan

“Our Key First Look (KFL) data suggests strong cohort retention and we believe that improving macro / apparel conditions will accelerate sales again.”

ThredUp is also supported by consumer trends that accelerated during COVID-19, including the move to e-commerce and consumers’ desire to shop sustainably.

On Tuesday, Lululemon Athletica Inc.
LULU, -2.24%
was the newest brand to offer Second-hand goods. Nike Inc. has opened a refurbished sneaker store last week. And Walmart Inc.
WMT, + 0.62%
and Gap Inc.
GPS, -2.16%
are just a few of the companies that have partnered with ThredUp over the past year as part of their own resale initiatives.

Second-hand competitor Poshmark Inc.
POSH, -2.12%
and The RealReal Inc.
REAL, -3.76%
went public in recent years.

Likewise: Poshmark will benefit from the move to used consumers cleaning their cabinets

“Cowen believes that department stores and mall retailers are likely to be stock donors in the next few years due to a combination of store closures and a greater shift in consumer preference to online and value-based concepts,” Cowen analysts wrote in a report dated Jan. March.

Cowen expects the online resale market to grow 25% at a compound annual growth rate (CAGR) and reach $ 70 billion by 2028.

Resale adoption is most robust among women between the ages of 18 and 34, according to Cowen Consumer Tracker.

According to Cowen, ThredUp, along with Poshmark and The RealReal, are among the leaders in the resale space, with smaller companies like Mercari and Rebag making the category more competitive.

“We see significant room for growth as resale becomes popular in all age groups and sustainability becomes a major issue. In addition, the flywheel effect of buyers becoming sellers and vice versa should support resale growth and promote customer loyalty, ”write analysts, led by Oliver Chen.

Wells Fargo initiated an overweight ThredUp stock with a price target of $ 22. Analysts, led by Ike Boruchow, see resale as a “potentially disruptive” sector of the retail market, and ThredUp’s business model can scale and “support high margins over the long term”.

Do not miss: Expect “eye-catching” sales from consumer companies when the calendar expires on COVID closings

Wells Fargo and KeyBanc analysts also highlight the efficiency of ThredUp’s operations.

“ThredUp’s network with highly automated distribution centers enables a solid order economy with an AOV of 69 USD [average order value]”Wrote KeyBanc.

“Low processing / distribution costs are very important given the low prices, and we believe this offers a significant structural advantage.”

ThredUp shares rose 11.1% on Tuesday, despite having slumped 27.6% so far this month. The S&P 500 Index
SPX, -0.66%
has risen by almost 4% so far in April.

Auto insurers profited unfairly from pandemic and may return cash to shoppers, AG says

The agency is committed to “fair and actuarially reasonable” tariffs, including taking into account “changes in consumer driving behavior”.

There is ample evidence that the crisis triggered by the coronavirus caused consumers to drive far fewer kilometers than they did before the pandemic.

Healey’s office claims data shows a reduction in driving behavior of about 50 percent in 2020 and, as a result, there have been fewer accidents, fewer claims, and fewer insurer payouts.

A key economic indicator in the insurance industry is what is known as the loss ratio – the amount an insurer pays for claims (losses) compared to the amount it receives for premiums.

The total pre-pandemic loss rate was around 62, according to the Attorney General’s office, which meant insurers withholding 38 cents of every dollar they received as profit, after administrative and other expenses. Last year, however, the claims ratio dropped to 49, which earned insurers 51 cents of every dollar they received – an increase of 34.2 percent.

“This decline in the claims ratio resulted in approximately $ 700 million in additional profits for insurance companies,” said the letter signed by Glenn Kaplan, chief of the attorney general’s department dealing with insurance matters.

The auto insurance industry in Massachusetts was deregulated in 2008. The insurance officer previously checked by how much insurers could increase their premiums.

Now insurers can set their own rates, but the agent has the power to review them to make sure they are not excessively high. In this case, approval can be refused.

During the pandemic, the insurance department touted its role in encouraging insurers to provide voluntary reimbursement. It also encouraged insurers to defer premiums if drivers got into economic trouble due to the pandemic.

According to a recent report by the Massachusetts Public Interest Research Group (MassPIRG), discounts last year ranged from 15 percent for two months to 15 percent for six months.

The average annual premium in Massachusetts is approximately $ 1,200. As such, the average discounts ranged from $ 30 to $ 90, far less than 10 percent, even on the most generous of refunds. (MAPFRE, the dominant insurer in Massachusetts, with about a quarter of all policies in the state, returned about $ 30 million to its customers last year as part of a premium giveback, it said.)

In their letter, the attorney general warned that insurers would set high premiums in the future.

“We believe that you need to act to prevent insurers from trying to raise tariffs any further,” based on the assumption that “things are going back to normal,” the letter said.

Healey’s position is backed by a dozen lawmakers, spearheaded by Senator Barry Finegold, who wrote to the commission in December that high premiums disproportionately high in “communities hardest hit by COVID-19” as “low” in light of reduced driving behavior harm -income urban communities and communities of color. ”

Finegold’s district includes Lawrence, one of the communities hardest hit by the pandemic.

“The numbers speak for themselves,” said Finegold in an interview. “It’s only fair to give a discount.”

MassPIRG also requested consumer relief in a letter to the insurance officer.

“People drive less so their costs should be significantly lower,” Deirdre Cummings, Legislative Director of MassPIRG, said in an interview. “That’s common sense.”

Some refund advocates pointed to California, where the Insurance Commission found that auto insurers have overloaded drivers and ordered them to report by April 30 “how to return additional premiums to drivers,” according to a recent press release this agency.

Christopher Stark, executive director of the Massachusetts Insurance Federation, a lobby group, said auto insurers had done their part in issuing refunds, suspending policy cancellations, and offering payment plans for policyholders who cannot pay premiums immediately.

Doubting the attorney general’s calculations, he said the insurance industry’s losses for 2020 are still being worked on and may be higher than the numbers cited by others.

Stark also pointed out that insurers do not ask for premium increases retrospectively after losses have exceeded expected levels.

Have a problem? Submit your consumer problem to Follow him on Twitter @spmurphyboston.

Firms compete for reduction cash headed to shoppers

In the past few days, some people have started receiving their $ 1,400 aid payments Wednesday morningBanks and credit unions are getting the government funds they need to distribute payments to even more people – tens of millions, they say American Bankers Association.

The Committee for a Responsible Federal Budget Estimates that this final round of direct payments amounts to more than $ 400 billion. And retailers compete to get a share of it when people spend money.

Consumers will likely spend this final round of bailouts quickly, said Matt Kleinschmit, CEO of research firm Reach3 Insights. People’s shopping lists say “things like groceries, household items, clothes, shoes, outerwear, etc. So it’s really a competition,” said Kleinschmit.

And it’s a competition that takes place online where consumers have shopped during the pandemic, said Sucharita Kodali, of Forrester Research.

“There they await any offers or offers that are available,” said Kodali.

During the pandemic, many brands have focused on selling products directly to consumers, said marketing professor Barbara Kahn of the University of Pennsylvania’s Wharton School. That gives these companies a lot of purchasing data for consumers.

“They know what their purchase history is, they know what their preferences are, and it’s a lot easier to get bespoke and personalized messages,” said Kahn.

She said much of this news is likely to come from the clothing, entertainment and other industries that struggled during the pandemic.

When will we see more COVID direct payments?

These stimulus checks, as they are commonly called, cost $ 1,400, but having one last time doesn’t mean you’ll get one this time. Now there’s a tough limit for singles who make more than $ 80,000 or married couples who make more than $ 160,000. From the time the COVID Relief Act is passed and signed into law by President Joe Biden, you will likely see this Payments are shown on bank accounts within a couple of weeks. This is for direct deposit. Paper exams take a little longer.

I hear a lot about interest rates. Is it getting more expensive to borrow?

Expectations of higher inflation As the economy recovers, investors are demanding higher returns to compensate for this. In return, the youngest Rise in bond yields increases the interest rates consumers pay on mortgages and other loans. Moody’s Analytics economist Scott Hoyt said rising interest rates could dampen Demand for housing refinance a little and a little more. Other types of consumer spending are less likely to be affected. Interest rates on auto loans and credit cards are available tied to shorter term interest ratesthat have not increased that much.

How will the federal government’s latest round of pandemic aid help women?

More than As of 2020, 2 million women have left the workforce. Many of them did this initially to look after children. The American rescue plan, due to be passed this week, offers an expanded child tax credit that can bring in up to $ 300 per month per child under the age of 6. It also includes nearly $ 15 billion in support of childcare facilities. Even so, experts say childcare is still the primary stumbling block for many women who want and need to back to work.

Range catalog lets shoppers ‘put their cash the place their values are’

The catalog is intended to help the participating municipalities to identify different companies when placing orders. It will also serve as a marketing tool for the publicly traded companies and a resource for consumers looking to promote social justice through their purchases, according to Kate Newhall-Smith, Salem’s chief planner.

Jonil Casado, owner of Flavors of your Palate, an in-home catering company in Salem, said he “jumped up and down” when he learned his company had been approved for catalog listing.

“A small business like mine that doesn’t have a brick and mortar store is difficult to promote and market,” said Casado, who is Latino. “I saw this as an opportunity for residents to learn more about my business. There is so much competition, especially on the north coast with so many restaurants. Now that people are in the catalog they have a place to find me. “

Newhall-Smith said the initiative was inspired by a similar diversity catalog compiled by Someville in 2019, and follows Salem Mayor Kimberley Driscoll’s belief that “it is important to strategize our local minority and women’s businesses To support the elimination of systemic inequalities ”.

She said Driscoll came up with the idea of ​​inviting neighboring communities to join the project in order to attract a wider range of businesses and expand the impact of the catalog. The leaders of the five other wards – Beverly, Lynn, Marblehead, Peabody, and Swampscott – contacted last month agreed to attend.

“I am excited to join this partnership … to create a diversity catalog,” said Lynn Mayor Thomas M. McGee in a statement. “This will be a useful resource for our local minority and women’s businesses to promote their services [and] to our constituents who want to support these companies and also promote the city’s efforts to promote racial justice. “

The catalog, which is updated annually, is open to all brick-and-mortar or exclusively online businesses in the Greater North Shore region. At least 51 percent of the company’s holdings must come from the identified demographic groups.

Jonil Casado is the chef and owner of Flavors of your Palate, a catering company. He is among those listed in a new North Shore Diversity Catalog. Rossy Fernandez

Companies can apply for inclusion in the catalog until March 31st. Newhall-Smith and Salem’s planning assistant, Kate Kennedy, are working with local organizations to recruit applicants and monitor registrations. When the catalog is ready later in the spring, it will be displayed on the websites of the six communities.

One of the groups involved in the project is the one based in Salem North Shore Community Development Coalition, which runs a program that provides free advice and technical support to small businesses, especially those who are immigrants, women, and minorities.

“Many of the companies we work with are excited about the opportunity to be on the North Shore Diversity Catalog, and we know it will open a door for them to opportunity, access and notoriety,” said Felicia Pierce, chief Coalition Program Officer, via email.

Flora Tonthat, founder and owner of Northey Street House B&B in Salem, is excited to have her company listed and notes that it will be especially helpful during the pandemic.

“As an Asian woman, COVID has made things a little more difficult lately,” said Hong Kong-born Tonthat, “because Asians are portrayed in a targeted and negative way.”

“I also value equity, diversity and inclusion,” said Tonthat, noting that she is promoting her own B&B as a “welcoming place for everyone”.

“As a consumer,” she said, “I would like to have a catalog yesterday in which I knew what my purchase options were, in which consumers can put their money where their values ​​are.”

John Laidler can be reached at