Newsletter — October 12, 2023

POLICY

• WR advocates for addressing public safety, retail theft, and organized retail crime

ECONOMY

• U.S. Economy still shows evidence of resilience
• Credit card debt tops $1 trillion in advance of holiday shopping season

ON THE LOCAL FRONT

• Seattle City Council considering a new delivery fee

RETAIL THEFT & PUBLIC SAFETY

• Addressing Organized Retail Crime in Seattle
• Surge in vehicle thefts raises concerns across Washington state

TRENDS

• Macy’s sets out to triple its off-mall fleet in less than two years

SAFETY

• EMPATHY — Part 1 of a 3-part soft skill series for safety professionals 

WR advocates for addressing public safety, retail theft, and organized retail crime

The WR Government Affairs team, along with key WR members, has been meeting with several high-level legislators to advocate for solutions to increasing public safety, reducing retail theft, and cracking down on organized retail crime (ORC). Having actual retail business owners describe how they, their employees, and customers are impacted is extremely helpful in providing meaningful examples to help elected officials understand the magnitude of the problem and the solutions needed.

According to the recently released report from the National Retail Federation (NRF), over $112 billion was stolen from retailers nationwide in 2022—up from $93 billion in 2021. Even more troubling is that the thefts are becoming increasingly violent. Many retailers are expressing concerns about providing a safe working and shopping experience. Some have even been forced to close stores over unsafe conditions. 

WR realizes that no one strategy will solve this complex and massive problem. Instead, a suite of tactics must be adopted and deployed for long-term impact. Fortunately, Congress, the state, and local governments are reacting positively. Congress has enacted the online transparency law, which makes it less attractive for retail thieves and ORC rings to fence/sell stolen and counterfeit goods on legitimate websites. The Combatting Organized Retail Crime Act (CORCA) – S. 140 and HR 895 are gaining widespread bi-partisan support and show signs of passing Congress this year.

On a state level, the Washington ORC Task Force is hiring a team of prosecutors, investigators, and data analysts who will go after the mega ORC rings plaguing our communities. On a local level, WR was ecstatic when the Seattle Auditor issued its well-thought-out and thoroughly investigated report on combatting ORC. The Retail Industry Leaders Association recently convened the “Vibrant Communities” initiative to pilot best practices and cooperative efforts in the Seattle King County area in hopes of deploying their findings nationwide.

More work is yet to be done. Recruiting, retaining, and training law enforcement is a significant priority for all levels of government. Also, our vehicle pursuit guidelines must be made clear and safe while bestowing proper authority for police to pursue property criminal suspects without jeopardizing the public or their safety. WR will advocate for both of these strategies now and in the 2024 Legislative Session.

U.S. Economy still shows evidence of resilience

Amidst labor disputes across the country, an expanding autoworkers strike, and growing international turmoil, the U.S. economy continues to exhibit notable resilience and growth.

Despite many households feeling the pressure of high inflation and interest rates, consumer spending overall has not weakened. Year-over-year spending surged by 5.8% in August, paralleling a 7.3% increase in disposable income, even as the Personal Consumption Expenditures Price Index rose 0.4% from July to August and 3.5% year over year. 

The NRF’s October Monthly Economic Review reported a 2.1% increase in the gross domestic product (GDP) for the second quarter and a modest 1.8% growth year over year after adjusting for inflation. The data underscores continued economic growth—albeit at a weakened pace, suggesting that higher interest rates and stricter lending standards have a more profound impact than previously acknowledged.

Indicators hint at a cautiously optimistic outlook for the U.S. economy. For example, nonfarm payrolls gained 187,000 jobs in August. This increased from 157,000 in July but significantly below the average monthly gain of 271,000 over the past year. Also, the unemployment rate modestly increased by 0.3 percentage points to 3.8% in August. 

The data underscores continued economic growth—albeit at a weakened pace—suggesting that higher interest rates and stricter lending standards have a more profound impact than previously acknowledged. The Federal Reserve is likely content that elevated interest rates have influenced the economy as anticipated. 

Read more from the NRF 

Credit card debt tops $1 trillion in advance of holiday shopping season

This holiday season, potential shoppers may face tighter credit limits and a more cautious approach to spending.

In July, a digital marketplace bank LendingClub study revealed that 61% of U.S. consumers were living paycheck to paycheck, marking a 2-percentage-point increase compared to the previous year. This financial strain was evident across all income brackets, indicating a broad economic challenge.

While credit cards have served as a lifeline for many Americans amidst rising prices over the past couple of years, they have also contributed to a record-high collective balance of $1.03 trillion, according to the New York Federal Reserve Bank’s Q2 report on household debt.

Last year, consumers added a staggering $116 billion in new credit card debt, with a significant portion, $88.4 billion, accumulated during the holiday quarter, as reported by WalletHub. This trend continued into this year’s Q2, which saw the second-largest increase ever for that period, totaling $43 billion. Much of this increase was driven by discretionary spending, as identified by LendingClub.

With rising interest rates in the current inflationary environment, consumers are finding it increasingly challenging to pay off their credit card balances. In fact, over half of respondents surveyed by Bankrate indicated that they expect to use a credit card for at least some of their holiday purchases, with 19% willing to take on additional debt.

However, the reluctance to rely on credit cards is likely to prevail among many consumers, especially those still grappling with balances from the previous year’s holiday season. Meghann Martindale, Head of Retail Research at Madison Marquette, predicts that caution will prevail this year. Earnest Analytics estimates that over 25 million consumers with student debt, or roughly 60%, will have $300 less per month to spend this year.

Martindale remarked, “Consumers overspent last holiday season when everything seemed back to ‘normal,’ and the prevailing attitude was to ‘just put it on a credit card.’ I don’t believe consumers will be as cavalier about it this year.”

Seattle City Council considering a new delivery fee

On September 26, the Seattle City Council’s Public Safety and Human Services Committee heard a presentation from Council staff on a potential new delivery fee. Presented as a means for the City to generate revenue to enforce several new worker protection ordinances, a fee of $.10 would be assessed on network companies “per online order for the delivery of goods or provision of other services in Seattle.”

The fee would finance the implementation and enforcement of five app-based worker ordinances:

1. Domestic Workers
2. Independent Contractor Protections
3. App-Based Worker Paid Sick and Safe Time
4. App-Based Worker Minimum Payment
5. App-Based Worker Deactivation Rights

The fee would not be assessed on grocery item (as defined in RCW 82.84) deliveries. However, a single non-exempt item in a grocery order (e.g., batteries or a sponge) would trigger the delivery fee.

The fee would be implemented on January 1, 2024, but the first filing would be due in the fourth quarter of 2024 and quarterly after that. In addition, the OLS Director would have the authority to adjust the fee.

It was revealed this week that the City is expected to include an annual license requirement for network companies operating in Seattle.

John Engber, WR’s lobbyist in Seattle, testified against the potential fee at the September 26 committee hearing.

WR will inform its readers of this potential fee and license details as they come to light.

Addressing Organized Retail Crime in Seattle

Tuesday, November 7

11:00 a.m. – 12:00 p.m.

From small to large, Seattle businesses are contending with a significant threat: organized retail crime. This systematic, illicit activity extends from online marketplaces to illegal street vendors and storefronts, impacting both direct businesses and third-party seller websites in the Seattle metro area.

A pivotal webinar, “Chamber Briefing: Organized Retail Crime,” is scheduled for November 7. It aims to equip businesses with essential knowledge and strategies to safeguard against these organized theft activities. Join the webinar here.

The webinar will delve into the mechanics of organized retail theft, offering practical protective measures for businesses, employees, and customers. It will also guide participants on the necessary steps if targeted by these criminal rings.

Additionally, the session will explore potential legislative proposals at the state level in Olympia, providing insights into possible future regulatory frameworks to mitigate organized retail theft.

The webinar promises to be a vital resource for businesses to navigate and counteract the prevalent issue of organized retail crime in Seattle, ensuring they are well-prepared and resilient against this persistent threat.

Surge in vehicle thefts raises concerns across Washington state

A concerning surge in vehicle thefts has been reported at a Tacoma shopping area parking lot, where six cars were stolen on the same day. Since 2018, nearly 400 reported motor vehicle thefts have been reported in this area, and this year's thefts are on track to break the yearly record.

This issue is not confined to Tacoma alone, as Washington is grappling with the problem statewide. A 2022 National Insurance Crime Bureau (NICB) study revealed that Washington has the second-highest vehicle theft rate in the United States. As lawmakers attempt to tackle the staggering number of vehicles stolen, their understanding of the underlying causes will be crucial to addressing the broader implications of the issue.

Criminals steal vehicles and use them to engage in many illegal activities, with retail theft one of the most significant consequences. Criminals use stolen cars as a convenient means of transporting stolen goods and executing additional crimes across the state—including storefront "smash and grabs," which are occurring at a staggering rate. This link between vehicle and retail thefts has far-reaching consequences that directly affect public safety.

Dealing with vehicle theft is not just about safeguarding personal property; it's about ensuring the public's safety, our communities' welfare, and our state's economic health. Recognizing the link between vehicle theft and organized retail theft allows us to allocate resources effectively and implement strategies to address these interconnected problems.

As we navigate the complexities of addressing this surge in vehicle thefts, we must adopt a comprehensive approach that involves law enforcement, community engagement, and public awareness. Together, we can work towards creating a safer environment for everyone in Washington.

Macy’s to triple its off-mall smaller stores

As Macy’s CEO Jeff Gennette prepares to exit his role, he’s executing a strategy that gained momentum earlier this year – an aggressive push into the off-mall retail landscape driven by promising results. The retailer’s Chief Stores Officer, Marc Mastronardi, has previously characterized these smaller format stores as “exciting brand extensions.” In a recent video release, he emphasized their role as a “growth vector for Macy’s Inc.”

According to Mastronardi, these smaller stores have proved instrumental in optimizing Macy’s physical store presence. They bring the company closer to its existing and desired customers while encouraging frequent visits. The small-format stores play multiple roles in Macy’s omnichannel market strategy, such as expanding market presence, replacing underperforming locations, or entering markets where Macy’s has no existing foothold.

Customer feedback has been overwhelmingly positive, with praise for the store environment, streamlined checkout processes, and friendly and helpful staff. Notably, in the second quarter of this year, Macy’s small-format stores experienced positive comparable growth. They earned “exceptionally high” customer experience scores without significantly cannibalizing sales in existing markets.

GlobalData Managing Director Neil Saunders sees Macy’s off-mall strategy as a logical response to changing consumer behaviors. He pointed out that Macy’s absence from many large strip malls and outdoor malls has left untapped opportunities. As shopping patterns evolve, Macy’s decision to adjust its strategy and commit to opening more small-format stores appears well-founded.

The impact on sales, particularly in relation to legacy Macy’s or Bloomingdale’s stores, will largely depend on location, according to Saunders. Macy's hopes to draw sales away from other off-mall retailers like Kohl’s, TJX, or Target, rather than eroding its existing store sales. While some cannibalization may occur, the potential gains for Macy’s could outweigh any losses.

Read the rest of the article

EMPATHY — Part 1 of a 3-part soft skill series for safety professionals 

Workplace safety is a paramount concern shared by employers and employees alike. Amidst the well-established framework of safety protocols, equipment, and training, soft skills are pivotal to promoting and sustaining workplace safety.

Empathy, a trait often underappreciated in the realm of safety, is a valuable soft skill that can significantly impact both individuals and their working environments.

Empathetic individuals excel at actively listening and comprehending the perspectives and concerns of their colleagues. This skill translates into the ability to articulate safety guidelines and potential risks with clarity and persuasion. When employees feel genuinely heard and understood, they are far more likely to recognize the critical significance of safety measures and diligently adhere to them.

Furthermore, empathy contributes significantly to developing a positive safety culture within the organization. When empathy is ingrained in the company’s values, employees naturally prioritize safety and embrace personal responsibility for their actions and their colleagues’ safety.

Empathy emerges as a powerful yet often underestimated component in the promotion of workplace safety. Empathy bolsters communication, sharpens hazard awareness, encourages safety reporting, fosters collaboration, streamlines emergency responses, reduces errors, and nurtures a positive safety culture.

As organizations incorporate empathy into their safety practices alongside other measures, they can anticipate a notable reduction in accidents and injuries, ultimately cultivating a more secure and supportive work environment. With empathy at the forefront, workplaces become safer and more harmonious for all.

This is the first in a three-part safety professional soft skill series to delve into profound ways to further create a safer and more secure work environment.

WR diversity statement

WR is committed to the principles of justice, equity, diversity, and inclusion. We strive to create a safe, welcoming environment in which these principles can thrive.

We value all people regardless of race, ethnicity, gender, religion, age, identity, sexual orientation, nationality, or disability, and that is the foundation of our commitment to those we serve.