RILA: Global trade war has begun
A leading retail association issued a stern warning about the impact of tariffs on American consumers and workers.
The Retail Industry Leaders Association said that American families and workers will be most impacted by the barrage of tariffs imposed on consumer products from China, and U.S. exports to the European Union, Canada, Mexico, and China. RILA issued its statement on Friday, July 6, the same day that a 25% tariff on $34 billion worth of Chinese imports to the U.S. went into effect. Chinese authorities retaliated with, as they had previously warned, equivalent tariffs on $34 billion worth of imported U.S. goods, ranging from vehicles to soybeans, beef and other agricultural products.
The U.S. tariff list includes:
• 25% tariff covering $34 billion in U.S. exports to China
• 25% tariff covering $34 billion in imports from China
• 10%-25% tariff covering $12.5 billion in U.S. exports to Canada
• 10%-25% tariff covering $3 billion in U.S. exports to Mexico
• 10%-25% tariff covering $3.4 billion in U.S. exports to the European Union
“There is no longer a ‘threat’ of a global trade war — the battle has begun,” said Hun Quach, VP of international trade for RILA. “These tariffs are officially being imposed on products sold by American businesses, and consumed by American families. Americans are caught in the crosshairs of the Administration’s three-front trade war, and they will be the ones paying the price. The recent onslaught of tariffs will jeopardize manufacturing and agriculture jobs in the U.S., while driving up prices on household items.
Quach noted that retailers support a level playing field for America on the global stage, but “punishing American families and the millions of American workers whose jobs are supported by trade is not the way to strengthen our trading relationships.”
“This tranche of tariffs on both exports and imports threatens our nation’s prosperity, and will imperil millions of jobs if allowed to persist,” she said. “We continue to encourage the Administration to focus its trade negotiations on solutions and shield American families from the barrage of tariffs coming from all directions.”
Hudson’s Bay in talks for possible joint venture
The parent company of Saks Fifth Avenue and Lord & Taylor confirmed on Friday that is as in talks regarding a potential joint venture for its European business.
In a statement, Hudson’s Bay Co. said that it is in discussions with Austria-based Signa Holding GMBH, and has signed a non-binding letter of intent with respect to the exploration of a potential joint venture. Hudson’s Bay and Signa separately operate Germany’s two major department store chains, Kaufhof and Karstadt. Kaufhof operates 96 stores in Germany, while Karstadt has 82.
The retailer noted that contrary to recent reports it has not signed a binding agreement to sell or combine its European business or properties. The announcement follows a report by The Wall Street Journal that the department store company had agreed to sell half of its European operations to Signa in a deal estimated at more than $1 billion in cash.
Hudson’s Bay said that any potential transaction is subject to further review and analysis by HBC, approval of HBC’s board and many other conditions.
“There can be no assurance that any such discussions will ultimately lead to a transaction,” the retailer said.
Study: Most consumers welcome Amazon’s move into pharmacy
There is good news for Amazon in a research report from Global DataRetail regarding the online giant’s acquisition of online pharmacy PillPack.
Fifty-four percent of Americans approve of Amazon’s decision to enter the pharmacy market — most likely because they think it will increase competition and reduce prices, the data showed. Only 24% think that the move is a bad thing, with the remaining consumers taking a neutral position. Approval is fairly even across the various demographic groups.
However, it will not all be smooth sailing. Consumers have concerns about sharing sensitive medical and health information, which Amazon will need to overcome, according to GlobalData Retail. Insurance network restrictions may also prevent some consumers from using Amazon — even if they want to.
The data also suggests that many consumers like having a physical store where they can get advice or pick up prescriptions. While this could limit Amazon’s growth if it sticks to the PillPack mail order model, it also gives the company an opportunity to develop a physical presence, perhaps using its Whole Foods Markets stores, noted Neil Saunders, managing director, GlobalData Retail.
“In any case, there are sufficient numbers [of consumers] who seem willing and able to use Amazon’s pharmacy services to allow the online giant to build a credible business and cause some disruption to established players,” Saunders said.
Here is a summary of findings from the GlobalData report:
• About 36% of consumers say they would either be very likely or likely to go to Amazon to fulfil their prescription needs. Almost 41% are not sure if they would use Amazon — most likely because it would depend on the networks permitted in their insurance or health plans.
• When it comes to where consumers would like Amazon to offer its pharmacy services, 61% are happy with mail order. But a sizeable number would like to see Amazon develop a physical presence, either at its Whole Food stores or via stand-alone pharmacies. Within ‘somewhere else’, respondents noted Amazon’s bookstores, kiosks in malls and a few mentioned Amazon’s Go convenience concept. These numbers suggest that for Amazon to really penetrate pharmacy, some sort of physical presence is needed, even if not on the scale of the traditional drugstore chains.
• Sharing data could be a barrier for Amazon with almost 58% of consumers saying they’d have at least a minor concern about sharing medical and health information with the company. On the flipside, almost 38% say they would have no problem at all (these consumers tend to be younger).
• Other barriers to using Amazon in pharmacy include a perceived lack of customer service, a desire to visit a physical pharmacy store, potential insurance restrictions, and safety concerns about mail order dispensing.
• When it comes to what Amazon could bring to the pharmacy market, the vast majority of consumers (79%) would like Amazon to lower prices. The ability to pick up prescriptions from Whole Foods stores and have same day delivery were also popular. Just under 60% of consumers would like to be able to reorder drugs via Alexa, and 48% would like a discount for Prime members.