Four key retail moments in 2023
Shoppers and retailers had a lot to contend with in 2023.
From the financial fallout over Adidas’ breakup with Ye, formerly known as Kanye West, over his antisemitic comments, to high-profile bankruptcies, it was a tumultuous year for retail businesses.
Here is a look back at a few key developments.
Adidas sued by shareholders over its failed Ye partnership
Adidas shareholders filed a class-action lawsuit against the brand, accusing it of failing to warn investors about the antisemitism and “extreme behavior” exhibited by Ye, the rapper formerly known as Kanye West, before their partnership ended last year.
In the lawsuit, filed in federal court in May, shareholders alleged that Adidas “routinely ignored” his behavior as early as 2018. They claim that senior executives “ignored serious issues” affecting the Yeezy partnership, namely his antisemitic remarks and troubling public comments about slavery.
“We outright reject these unfounded claims and will take all necessary measures to vigorously defend ourselves against them,” Adidas said in a comment to CNN.
Adidas had partnered with Ye since 2013, when the company signed his brand away from rival Nike. In 2016, Adidas expanded its relationship with the rapper, calling it “the most significant partnership ever created between a non-athlete and an athletic brand.”
But Adidas put the “partnership under review” in 2022 after he wore a “White Lives Matter” T-shirt in public. The Anti-Defamation League categorizes the phrase as a “hate slogan” used by white supremacist groups, including the Ku Klux Klan.
Ye then said “I can say antisemitic s*** and Adidas cannot drop me,” during a tirade against Jews on the Drink Champs Podcast. He also threatened on Twitter to “Go death con 3 on JEWISH PEOPLE.”
Adidas dropped its partnership with Ye shortly after.
Bed Bath & Beyond files for bankruptcy
Bed Bath & Beyond, the store for seemingly everything in your home during the 1990s and 2000s, filed for bankruptcy in April and closed all of its more than 350 stores.
As the brick-and-mortar model began to give way to e-commerce, Bed Bath & Beyond was slow to make the transition — a misstep compounded by the fact that home decor is one of the most commonly bought categories online.
Overstock.com bought Bed Bed & Beyond’s brand out of bankruptcy and has relaunched it online, complete with the 20% coupons.
Hundreds of empty Bed Bath & Beyond stores auctioned off as part of the bankruptcy proceedings turned out to be coveted real estate for retailers and other companies seeking to expand.
Burlington, Michaels, Barnes & Noble, Ollie’s Bargain Outlet, Macy’s, HomeGoods and other chains have replaced old Bed Bath & Beyond stores. Indoor pickleball courts, trampoline parks and bowling alleys have also filled up the vacancies.
Target says it’s closing nine stores in major cities because of theft and organized crime
Target said in September that it was closing nine stores in major cities across four states, claiming theft and organized retail crime made the environment unsafe for staff and customers — and unsustainable for business.
The big box chain is part of a wave of retailers — both large and small — that say they’re struggling to contain store crimes that have hurt their bottom lines. Many have closed stores or made changes to merchandise and layouts.
Nevertheless, skeptics say stores have not provided enough information to back up those claims, and at least one retailer said theft may have been an over-exaggerated issue.
Some retail analysts and researchers, bolstered by local crime statistics, say stores may be overstating the extent and impact of theft. Why? It’s a useful deflection, enabling the cancelation of real estate leases that no longer work, camouflaging weak demand, and covering up mismanagement. And it forces lawmakers to respond.
Across the country, the “actual increase in rates of theft” at stores does not “correspond to the increase in company commentary and actions” on theft, according to an October report by retail analysts at William Blair.
“Retailers are increasingly vocal on the subject, in part to draw out government action,” the analysts wrote.
“We believe companies like Target could indeed be using the current narrative around shrink to take broader action in lagging parts of their business,” the William Blair analysts said. “Target could be using shrink to mask other issues, including poor inventory management, which came to a head in 2022 following supply chain disruption” and is closing stores to “boost overall margins.”
Retailers rethink self-checkout
The backlash against self-checkout is growing, and stores are starting to dial back on the technology after it exploded over the past few years.
Booths, a British supermarket chain, said it’s removing self-checkout stations in all but two of its 28 stores. In the United States, Walmart, Costco, Wegmans and other chains have also revised their self-checkout strategies.
Self-checkout expanded at supermarkets in the early 2000s as stores looked to cut costs, and during the pandemic, many shoppers used self-checkout for the first time to minimize close interaction with employees and other customers.
But now, retailers are rethinking self-checkout. They have found that self-checkout leads to higher merchandise losses from customer errors and intentional shoplifting — known as “shrink”— than human cashiers ringing up customers.
“We had started to rely too much this year on self-checkout in our stores,” Dollar General CEO Todd Vasos said on an earnings call in December. “We should be using self-checkout as a secondary checkout vehicle, not a primary.”
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