Chewy, the pet goods retailer, recently signed a new freight contract that will cost it more this year; and in the final quarter of 2021, it also faced higher labor costs. But it is hoping that those trends do not last, or that it can offset the climbing expenses through efficiencies.
“As we close the book on 2021 and move forward in 2022, we are already seeing improvements in labor availability, inbound shipping costs and pricing, while out-of-stock levels and outbound shipping costs remain elevated,” Sumit Singh, the firm’s chief executive officer, said on an earnings call this week. “Ultimately, we believe most of these challenges are not permanent in nature.”
What is inflation? Inflation is a loss of purchasing power over time, meaning your dollar will not go as far tomorrow as it did today. It is typically expressed as the annual change in prices for everyday goods and services such as food, furniture, apparel, transportation and toys.
Other companies have been expecting consumer demand to face some challenges this year, as households get past the government stimulus checks that boosted their spending ability in 2021.
“For our business in the industry we’re in, the stimulus checks are a short-term impact from last year,” Jon Barker, chief executive officer at Sportsman’s Warehouse, said on a March 29 earnings call. “And while fuel costs and inflation will certainly have an impact on disposable income for our consumer, we actually believe and are confident that our industry is more — is able to weather those changes better than most.”
Household balance sheets are still in decent shape even as some support payments lapse. Many people paid down debt during the pandemic, and others are seeing pay gains that could help them to sustain spending in the months ahead. Households across the income spectrum built up savings during the pandemic, partly thanks to the government relief payments.
For the White House and Democrats, inflation is a political liability headed into midterm elections that have the potential to cost them control of Congress. Consumer sentiment and voter approval ratings have both swooned as prices have risen.
President Biden is considering a plan to release one million barrels of oil a day from the Strategic Petroleum Reserve for as long as 180 days, according to a person familiar with the plan. That would add a large amount of oil to the global market in an effort to blunt price increases at the pump tied to Russia’s invasion of Ukraine.
Bloomberg first reported news of the anticipated release.
The president’s public schedule, released Wednesday, said that he would give remarks Thursday afternoon on the administration’s “actions to reduce the impact of Putin’s price hike on energy prices and lower gas prices at the pump for American families.”
Source: NY Times