Consumer Confidence Rebounds
Consumer confidence rebounded strongly in the closely watched Consumer Sentiment Index produced by the University of Michigan, but it is still below levels before the pandemic.
The university’s index rose to 83 based on a March survey of consumers, a 6.2 point increase from February. It’s still 6 points lower than the March 2020 survey that reflected views just before the World Health Organization declared a pandemic with the fast-spreading coronavirus.
February’s reading was a six-month low. During the pandemic, however, the index never dipped as low as it did during 2008-2009 Great Recession when it fell under 60. The index hit its lowest point over the past 12 months in April 2020, the height of economic shutdowns across the country.
Richard Curtin, the chief economist for the surveys, wrote in his analysis that the “gains were widespread across all socioeconomic subgroups and all regions, although the largest monthly gains were concentrated among households in the bottom third of the income distribution as well as those aged 55 or older.”
Consumers 35 and under have been the key group that consistently led recoveries over the past five decades, Curtin noted.
The current economic conditions portion of the index registered 91.5, up from 86.2 in February. Last year, the index was at 103.7.
“Overall, the data indicate strong growth in consumer spending during the year ahead, with the largest percentage gains for services, including travel and restaurants, and the smallest increases for vehicles and homes,” Curtin wrote.
The improvement comes as daily vaccination counts rise and more aid is being injected into the economy after President Biden signed a nearly $1.9 trillion package into law last Thursday, which includes $1,400 in direct payments to some Americans.
E-Commerce Boosts Home Goods Retailer
Kirkland’s reported that a big increase in e-commerce sales helped soften the blow of closed stores and reduced foot traffic because of the pandemic.
The Brentwood, Tennessee-based retailer specializing in home decor and furniture reported $543.5 million in sales for its fiscal year that ended Jan. 30, down from $603.9 million the previous fiscal year.
Though sales were down, the retailer reported net income of $16.2 million. It lost $53.3 million in the company’s 2019 fiscal year.
Some of the improvement was the result of lower occupancy costs from closed stores and negotiated rent reductions, Nicole Strain, Kirkland's chief financial officer, told investors in an earnings call Friday.
During the year, Kirkland’s closed 59 underperforming stores to take its total store count to 373. More could close this year.
“We continue to believe that our ideal store count is in the range of 300 stores to 350 stores,” Strain said. “Where we land within that range depends on store profitability and performance, as well as consumer shopping preferences post-pandemic, but we do expect future store closures to be with the natural lease expirations as we address the majority of under-performing stores this year."
The retailer has been undergoing a transformation since Steven Woodward took over as chief executive officer in 2018. Much of the transformation has to do with improving the quality of its merchandise.
Chefs Focus on Apartment Food Lockers
Two James Beard Award-winning chefs in Boston teamed up with a startup that has food vending machines and lockers at apartment buildings.
Jamie Bissonnette and Ken Oringer, owners of Boston eateries Toro, Coppa and Little Donkey, are working with Boston-based Alchemista to provide custom-made, limited menus for select luxury apartments in the area as part of a pilot partnership.
With the lockers, a resident orders the meals from Toro, a Spanish restaurant, or Coppa, an Italian restaurant, that Alchemista picks up and puts in a food locker designed to ensure the meal is at the proper temperature.
Putting lockers in apartments marked a pivot for Alchemista after its corporate clients ended catering contracts when they sent people home to work. According to a Boston Globe report, Moderna, a company based in the area that developed one of the first coronavirus vaccines, stayed on as a client.
Alchemista couldn’t offer buffet-style meals because of the pandemic but offered Moderna a locker, which helped in making the transition.