December 9, 2019
Members supported MN Retailers IMPACT last week at Flannel Jack's.
Housley Renews Call To Modernize Minnesota’s Liquor Laws
From the Minnesota Senate Republican Caucus, December 8, 2019

After two major brewing companies announced they will no longer produce the lower-strength beer that can be sold in Minnesota grocery and convenience stores, Senator Karin Housley (R-St. Marys Point) is renewing her call to modernize the state’s liquor laws. Senator Housley is calling on the legislature to act on her bill, introduced during the 2019 session, that would allow grocery and convenience stores to sell off-sale beer and wine.

“We’re two decades into the new millennium, but our liquor laws still reflect an era of Prohibition. It’s time to end the government monopoly, especially on a product so readily available in every one of our neighboring states,” said Senator Housley, vice chair of the Senate Commerce and Consumer Protection Finance and Policy Committee. “We knew it was only a matter of time before the market demanded we bring our liquor laws in line with the rest of the nation. As the production of 3.2 beer continues to zero out, grocery and convenience stores will soon have no choice but to lock the cooler doors indefinitely – ultimately resulting in fewer choices and higher costs for the consumer.”

In separate letters to industry representatives, executives from HEINEKEN USA and Constellation Brands cited Minnesota’s position as the sole remaining state to limit alcohol sales at grocery and convenience stores to 3.2 percent alcohol by volume (ABV) beer as the primary reason for their decisions to end its production.

“Now that Minnesota is the last state that still limits grocery and convenience stores to selling 3.2 percent beer, our company has stopped new production of 3.2 percent beer and is in the process of depleting our current inventory,” said Laurens van de Rotte, senior vice president and chief operations officer at HEINEKEN USA, which includes the Heineken, Dos Equis, Tecate, Amstel Light, and Newcastle Brown Ale brands.

“The one state remaining that mandates only 3.2 percent beer be sold to and through certain retail channels is Minnesota. As a result of […] the significant reduction in 3.2 percent volume, Constellation will cease production of all 3.2 percent brands and packages effective immediately,” said John P. Utter, senior vice president for Constellation Brands, which includes Corona, Modelo Especial, Victoria, and Pacifico beers.

In addition to introducing legislation for off-sale beer and wine sales at grocery and convenience stores, Senator Housley also introduced a bill to ‘Save the Growler’, a bill for a constitutional amendment to let voters weigh in on the issue, and several other related bills in 2019. Those bills will still be active for the 2020 legislative session, which begins on February 11.

“A lot has changed in Minnesota. In a time where brick-and-mortar grocery stores are facing competitive pressures from all sides, including online sales, industry statistics suggest beer and wine sales could significantly increase trips to the grocery store – and basket sizes. The demands of the consumers are changing, and our laws should reflect that. I have every intention of making an aggressive push in this session to update our antiquated liquor laws,” said Senator Housley.
Retail Imports Surged In November Ahead Of December Tariffs
From the National Retail Federation, December 9, 2019

Volume at the nation’s major container ports bumped up significantly in November as retailers imported merchandise ahead of new tariffs set to take effect this month, according to the Global Port Tracker report released today by the National Retail Federation and Hackett Associates.

“At this point, holiday merchandise is already in the country, so the direct impact of new tariffs won’t be seen until the season is over,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “Nonetheless, tariffs are bad for both consumer and business confidence, and we hope that the December tariffs will be canceled or postponed as a sign of good faith. We need a deal with China as soon as possible so we can bring an end to the trade war that has put a drag on the U.S. economy for far too long.”

President Trump announced a tentative agreement on a partial trade deal with China in October, but the measure has yet to be finalized and a new round of tariffs on consumer goods is still scheduled to take effect December 15.
What To Do With $1.3 Billion? A Surplus Of Ideas For Minnesota
From the Star Tribune, Jessie Van Berkel, December 7, 2019

The ideas started rolling in as soon as the surplus was announced. Give it back to Minnesotans via tax breaks. Spend it on roads and bridges. Eliminate the tax on health care providers. Invest in affordable housing. Or rural broadband. Or public schools.

Minnesota appears likely to have an extra $1.3 billion in its two-year budget, state experts said Thursday at the big biannual budget forecast event.

The state teachers union Education Minnesota sent an e-mail saying the state should spend the money to train and retain school support staff, expand after-school services, increase the number of teachers of color or improve student mental health support.

Minnesota Chamber of Commerce President Doug Loon just offered one idea left on the cutting room floor in the last legislative session: “Joining the majority of other states that have fully conformed to the federal income tax business expensing rules.”

The federal rules, which changed under President Donald Trump’s 2017 tax bill, would allow farmers and small companies to write off certain property and equipment purchases within the first year. They also would raise the maximum deduction to $1 million.

Legislators tossed out a number of ideas in dueling DFL and GOP news conferences in the hours following the announced surplus, which was expected.
Trade War Has Cost Americans Additional $42 Billion, Including Over $4 Billion in October Alone
From Tariffs Hurt The Heartland, December 9, 2019

As negotiations between the United States and China continue on the phase one trade deal, new data released by Tariffs Hurt the Heartland shows American consumers and businesses have paid an additional $42 billion since the trade war began in February 2018 through October 2019. This data comes less than a week before yet another round of tariffs are expected to be implemented on primarily consumer facing goods. In the month of October, there were nearly $18 billion worth of imports from China that will be hit with a 15 percent tax beginning December 15th unless those tariffs are rolled back.

In the month of October alone, Americans paid a total of $7.2 billion in tariffs, more than any other amount in U.S. history. That is one billion dollars higher than in October 2018, which itself shattered previous records for tariffs collected. This significant increase in tariffs paid by Americans is primarily driven by tariffs implemented by the Trump administration, which account for over $4 billion of the total in October.

“According to an analysis of data from the president’s own Department of Commerce, American businesses, farmers and consumers – and not China – have paid $42 billion in additional taxes because of these tariffs,” stated Americans for Free Trade spokesperson Jonathan Gold. “Yet even when faced with this staggering number, it’s still unclear whether the president will follow through with his threat to raise taxes yet again on December 15th with another rounds of tariffs, this time on primarily consumer-facing products like toys and consumer electronics. This trade war has lasted long enough and done enough damage. It’s time the administration finalize a deal with China to end the trade war and remove all tariffs.”

The data released today also shows the devastating impact of retaliatory tariffs on American exports as well. Chinese tariffs on American exports totaled $12 billion since the start of the trade war and topped $1.3 billion in October alone as China further raised tariffs in retaliation for U.S. List 4A tariffs. These tariffs have focused heavily on American farm exports. The October data shows that exports to China that are subject to retaliatory tariffs are $30 billion below their 2017 levels – a 25 percent decrease.
Minnesota Officials Forecast Slow Economic Growth, Warn Of Uncertainties
From Duluth News Tribune, Matthew Guerry, December 5, 2019

The demand for labor remained strong across Minnesota in 2019 while unemployment rose steadily but below the national average, according to the state Department of Management and Budget.

In its Thursday, Dec. 5, budget and economic forecast, the department reported that the ratio of unemployed Minnesotans to job vacancies stands at about 0.7 in the continuation of a trend that began in 2017. Remarking on the forecast, State Economist Laura Kalambokidis said that strong state labor demands are likely to persist for as long as the national economy continues to expand.

Minnesota's unemployment rate did rise slightly in 2019 to a rate of 3.2%, according to the state Department of Employment and Economic Development. Kalambokidis attributed the spike to the growing number of employment-aged Minnesotans but said that the state's labor force participation rate remains solid at 70.3%

"Coincidental upticks in the labor force participation rate and the unemployment rate suggest that some new workforce entrants may not have immediately found work," Kalambokidis said.

Individual income tax revenue forecasts for the 2020-21 fiscal year beat out previous estimates by about 1.9% or $493 million, according to the forecast. General sales tax revenue is similarly expected to increase by 2.2%, or $252 million.

The state corporate franchise tax , meanwhile, is forecast to generate 9.2% or $294 million less in revenue than was previously predicted. Corporate profits that fell short of expectations may be to blame, Kalambokidis said. .
Holiday Shopping By The Numbers — Spending Kicks Into High Gear
From Fox News Business, Shan Carter, December 4, 2019

There was no shortage of spending between Black Friday and Cyber Monday.

That’s according to new data from the National Retail Federation, which polled more than 6,700 U.S. shoppers between Nov. 27 and Dec. 2. A record 190 million consumers shopped during that time, an increase of 14 percent compared to last year’s 165 million.

Shoppers spent an average of $362 on holiday items, up 16 percent from last year. And the biggest spenders were between the ages of 25 and 34, dropping an average of $440 over the five-day stretch.

About 124 million people shopped in stores, according to the findings. 142 million shopped online and 75 million did both.

Here’s a deeper look at the numbers:

  • Black Friday was the busiest day for in-store spending, with 84 million shoppers.
  • Small Business Saturday was the second-busiest day in stores, with 60 million.
  • Thanksgiving ranked third with about 38 million.
  • Sunday, Dec. 1 saw 29 million shoppers and Cyber Monday saw 22 million.

This marks the first time Black Friday topped Cyber Monday as the busiest day for online sales, according to the study, with 93 million shoppers versus 83 million.
Thanksgiving Weekend Draws Nearly 190 Million Shoppers, Spending Up 16 Percent
From the National Retail Federation, December 3, 2019

A record 189.6 million U.S. consumers shopped from Thanksgiving Day through Cyber Monday this year, an increase of 14 percent over last year’s 165.8 million, the National Retail Federation and Prosper Insights & Analytics said today.

“Americans continue to start their holiday shopping earlier in the year, and Thanksgiving is still a critical weekend for millions,” NRF President and CEO Matthew Shay said. “Whether they’re looking for something unique on Main Street, making a trip to the store or searching for the best deals from their mobile device, this is when shoppers shift into high gear. With the condensed holiday season, consumers are feeling the pressure to get their shopping done in time. Even those who typically wait until the last minute to purchase gifts turned out in record numbers all weekend long.”

Shoppers spent an average $361.90 on holiday items over the five-day period, up 16 percent from $313.29 during the same period last year. Of the total, $257.33 (71 percent) was specifically spent on gifts. The biggest spenders were 25- to 34-year-olds at $440.46, closely followed by those 35-44 at $439.72.

The survey found that 124 million people shopped in stores while 142.2 million shopped on retailers’ websites; demonstrating today’s seamless shopping world, 75.7 million did both. Consumers who shopped in both channels spent an average $366.79, spending at least 25 percent more than those who shopped in only one or the other.

Black Friday was the busiest day for in-store activity, with 84.2 million shoppers, followed by Small Business Saturday (59.9 million), Thanksgiving Day (37.8 million), Sunday (29.2 million) and Cyber Monday (21.8 million). Of those shopping on Saturday, 73 percent were likely to shop specifically for Small Business Saturday.

For the first time, Black Friday topped Cyber Monday as the busiest day for online at 93.2 million shoppers compared with 83.3 million. Saturday followed at 58.2 million, Thanksgiving Day at 49.7 million and Sunday at 43.1 million.

With online and in-store shopping increasingly intermingled, free shipping was the biggest reason for shoppers to make a purchase they were otherwise hesitant about, cited by 49 percent, up from 42 percent last year. And the ability to order online and pick up in-store was cited by 20 percent, up from 15 percent last year. Other top factors included limited-time sales or promotions (36 percent) and an easy-to-use website or app (21 percent).

Thirty-nine percent of consumers looked to emails from retailers for information on deals and promotions, edging out conventional advertising circulars, which were tied with online search at 38 percent. Mobile devices played a significant role, used by 75 percent to research products, compare prices or make purchases, up from 66 percent last year.

“The growth in online retail sales is a tide that lifts everybody,” Prosper Executive Vice President of Strategy Phil Rist said. “When consumers are buying from retailers online but picking up or making returns in-store, it is more and more difficult to distinguish between the sales retailers make in their stores and the ones they make on their websites.”

Top gift purchases over the weekend included apparel (bought by 58 percent of those surveyed), toys (33 percent), electronics (31 percent), books/music/movies/video games (28 percent) and gift cards (27 percent).

Shopping destinations included department stores (visited by 50 percent of those surveyed), clothing stores (36 percent), grocery stores (34 percent), electronics stores (32 percent) and discount stores (29 percent).

On average, consumers had completed 52 percent of their shopping, up from 44 percent during the same weekend last year, although Thanksgiving came six days earlier in 2018. The survey found only 39 percent of shoppers believe deals seen over the Thanksgiving weekend will get better throughout the rest of the season.

The popularity of Thanksgiving weekend shopping continues even as earlier NRF surveys found that 56 percent said they had already started as of the first week of November.
Ask Employees To Join The Team Fighting Opioid & Substance Abuse This Holiday Season; MnRA Initiative Makes It Easy
The holiday season represents the largest retail employment period of the year, which makes this the best time to engage employs in the fight against opioid and substance abuse. In 2017 alone there were 422 Minnesota opioid-related overdose deaths and since 2010 the rate of overdose deaths has been steadily increasing. Your employees are on the front line when it comes to helping friends and family!

MnRA, in partnership with the The Rx Abuse Leadership Initiative (RALI) of Minnesota, has developed materials you can share with employees to heighten awareness, recognize the signs, practice safe medication safety, and get access to resources.

The ask this holiday season:

  • Be a leader in raising awareness of opioid and substance abuse this holiday season.

  • Share a flyer with employees during a payroll cycle December 15-January 15. The flyer makes a great paycheck stuffer or place the information in your employee newsletter.

  • Post the poster in a place accessible to employees.

Together, retailers and their employees can make a difference in this fight. Join the team today!

Visit www.mnretail.org/jointheteam for downloadable flyers and posters.

Looking for materials in another format? Contact MnRA at mnra@mnretail.org or call (651) 227-6631.
Retail Rally Speaker Videos Available
Seven speaker videos from early October's Retail Rally event are available now on YouTube.

Robyne Robinson, fivexfive Public Art Consultants

Dr. Terry Wu, Neuromarketing Services

Juli Lassow, JHL Solutions

Atif Siddiqi, Branch

Ryan Grogman, Boston Retail Partners

Sarah Kowal, Right Now Enterprises

Paul Omodt, Omodt & Associates