Trends support market enthusiasm for cold storage | Construction starts mired by rates, tightening credit | US jobless claims drop to 8-month low of 198K
Several trends could bolster the cold storage sector, with investors pointing to shifting consumer demand, technological evolution and changes in the supply chain. Major players include Americold Realty Trust and Lineage Logistics, and an affiliate of Related is making a $1 billion investment in the space through a new business called RealCold, which will function as a system of cold storage distribution facilities.
September construction starts were 6% below August starts, according to Dodge Construction Network. Starts declined 3% in the first nine months of 2023 compared with the first nine months of 2022. "Over the last 12 months, construction starts have essentially froze as rates increased and credit tightened," Chief Economist Richard Branch says. "The industry needs further adjusting as rates are expected to stay higher for longer, along with the potential for higher energy costs and continued political uncertainty."
US initial jobless claims dropped to 198,000 in the week ending Oct. 14, a decrease of 13,000 from the previous week and the lowest number in eight months. The four-week average fell by 1,000, to 205,750, with roughly 1.73 million Americans in total collecting unemployment benefits.
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Walmart has opened a 1.5 million-square-foot fulfillment center in Lancaster, Texas, as the third of five planned high-tech facilities that use machine learning along with workers to process more orders. The centers combine a 12-step process into five steps and allow for more next-day and two-day shipping.
Some retailers are reversing investments in distribution centers they made in recent years, and executives point to the potential for saving millions of dollars. Amazon, StitchFix and Wayfair have shuttered or canceled construction of warehouses, which analysts say could translate into worthwhile savings but also risks falling short of shoppers' fulfillment expectations.
AI has the potential to be a game-changer in the food industry by enabling organizations to track the supply chain, closely monitor products, streamline operations, reduce risks and use data for decision-making, writes Paul Damaren of RizePoint. Implementing AI tools can help organizations detect contaminants, defects and spoilage to improve product quality and adhere to regulatory standards, among other benefits, Damaren writes.
The NBA's hyperlocal strategy in the Asia-Pacific market, Netflix's flexible social media approach and real-time analytics and Lego's focus on collaboration represent the future of marketing, writes Nathalie Ramirez, chief growth officer at Maker Lab. Ramirez notes that the boundaries between platform and content are becoming more flexible and that brands need to seize opportunities as soon as they arise.
Brands can circumvent team and data silos and other issues related to marketing funnels by shifting their focus to growth loops, which "unifies product, channels and monetization in a single system and focuses on compounding growth rather than linear growth," writes Ana Mourao. Growth loops can be tailored to business models, aligned with various objectives and produce valuable customer data that can be used to optimize campaigns and develop "a sustainable model."
US companies increased employee salary budgets 4.4% on average this year, marking the highest growth since 2001, and plan an additional 4.1% increase in 2024, according to a report from The Conference Board. A recession could ease competition for workers and slow salary increases, but senior economist Selcuk Eren said any downturn is expected to be short and shallow with limited impact wage growth.
Paid sick leave has been used by 30% of white-collar employees this year, up from 2019's 21%, and workers ages 25-34 most often use their sick days, according to Gusto research. Workers, managers and experts discuss the causes in the rise, with some blaming changing work ethics while other say it's a positive reflection of increased emphasis on good physical and mental health.
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