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    Workers at REI Store in Manhattan Seek to Form Retailer’s Only Union

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    In filing for a union election, employees of the outdoor equipment retailer cited safety during the pandemic, among other concerns.Employees at an REI store in Manhattan filed for a union election on Friday, making the outdoor equipment and apparel retailer the latest prominent service-industry employer whose workers have sought to unionize.Amazon employees in Bessemer, Ala., rejected a union in an election last year, though the National Labor Relations Board later threw out the result, citing improprieties on the part of the company, and ordered a new election to begin next month.In December, workers at two Starbucks stores in Buffalo voted to unionize, making them the only company-owned Starbucks locations in the country with a union. Employees at about 20 other Starbucks have since filed for union elections.The filing at the REI store in SoHo asked the labor board for an election involving about 115 employees, who are seeking to be represented by the Retail, Wholesale and Department Store Union, the same union that has overseen the union campaign at the Amazon warehouse in Alabama.In addition to filing for the election, the REI employees have asked for voluntary recognition of their union, which would make a vote unnecessary.Like Starbucks, REI, a consumer cooperative made up of customers who buy lifetime memberships for $20, cultivates a progressive image. REI’s website says that the cooperative believes in “putting purpose before profits” and that it invests more than 70 percent of its profits “back into the outdoor community” through initiatives like dividends to members and employee profit-sharing.The site also says that REI closes all of its roughly 170 stores, none of which are currently unionized, on Black Friday to allow employees to spend the day with family and friends.The retailer has more than 15,000 employees in the United States, compared with more than 230,000 at roughly 9,000 U.S. Starbucks locations that are owned by the company.In a statement, Graham Gale, an employee involved in union organizing at the SoHo REI store, said the campaign was partly a response to “a tangible shift in the culture at work that doesn’t seem to align with the values that brought most of us here.” The statement also pointed to “the new struggle of facing unsafe working conditions during a global pandemic.”In a follow-up text, Mx. Gale, who prefers gender-neutral courtesy titles and pronouns, said REI declined to bring back some long-tenured employees who had been outspoken about workplace concerns after the retailer temporarily closed its stores in 2020.Since the beginning of the pandemic, some REI employees have criticized the retailer over what they say are insufficient safety protocols, including a lack of transparency over which employees have tested positive for Covid and a decision to relax its masking policy. The retailer has said that it follows relevant guidance from state and federal health authorities, but it has adjusted some policies as it faced criticism.Responding to the union campaign in Manhattan, REI said in a statement: “We respect the rights of our employees to speak and act for what they believe — and that includes the rights of employees to choose or refuse union representation. However, we do not believe placing a union between the co-op and its employees is needed or beneficial.”The statement went on to say that the co-op was committed to working with employees at the SoHo store to resolve their concerns.Despite the organizing efforts at companies like Amazon and Starbucks last year, membership in unions declined to 10.3 percent of the work force, matching its lowest figure in Labor Department records that date back to 1983. More

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    Retail Sales Fell in December, a Slowdown in a Robust Holiday Shopping Season

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    Retail sales fell 1.9 percent in December, the Commerce Department reported on Friday, reflecting a slowdown during an otherwise robust holiday shopping season that started earlier in the year for many consumers.It was the first drop after four straight months of sales increases, though the gain in November slowed from October because of the lengthened holiday shopping season brought on by fears of product shortages and price increases. Total sales for October through December were up 17.1 percent from a year earlier, according to the report. December sales rose 16.9 percent from 2020.Beth Ann Bovino, chief U.S. economist at S&P Global, said that although there was bound to be “headline shock” over a weaker number, the broader picture for retail sales had been strong over the past few months.“This is not a sign of consumer weakness,” said Ms. Bovino, who had forecast a decline. “Given that households have relatively strong balance sheets with high savings levels and a strong job market with wages climbing higher, it seems that consumers are not necessarily closing their pocketbooks. They’re taking a brief pause.”

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    Monthly retail sales
    Note: Advance monthly sales estimates for retail and food services, seasonally adjustedSource: Commerce DepartmentThe New York TimesThe retail sales report provides a data point on the mind-set of consumers after a report this week showed that inflation at the end of 2021 climbed to its highest level in 40 years. Prices have increased as new variants of the coronavirus have exacerbated supply chain issues and robust consumer demand for goods. At the same time, the Omicron wave has caused widespread staffing shortages and may have played a role in diverting some consumers from stores and holiday gatherings.Ms. Bovino said that she did not believe inflation played a role in the overall sales decline but that concerns around higher prices were likely to show up in the first quarter of this year.Understand the Supply Chain CrisisThe Origins of the Crisis: The pandemic created worldwide economic turmoil. We broke down how it happened.Explaining the Shortages: Why is this happening? When will it end? Here are some answers to your questions.Gifts Arrive on Time: Fears that a disrupted supply chain could wreak havoc on the holidays turned out to be wrong. Here’s why.Car Shortages: The limited supply of vehicles is forcing some to go to great lengths to find them, including traveling hundreds of miles.A Key Factor in Inflation: In the U.S., inflation is hitting its highest level in decades. Supply chain issues play a big role.Economists at Morgan Stanley had forecast retail sales to rise 0.4 percent in December. Even though inflation topped the coronavirus as the No. 1 concern for consumers whom Morgan Stanley surveyed in November, that “came with no dent to spending plans,” the economists said in a note last week.Instead, the holiday shopping season appeared to break records and lower-income consumers seemed to be operating with relatively better buying power, the economists wrote. At the same time, they anticipated that the Omicron wave drove more spending to goods rather than services.The pandemic has continued to shape consumer habits in the United States.Fewer people shopped in stores this holiday season, even though the Omicron variant did not become a prominent threat until December. Retail foot traffic in the United States between Nov. 21 and Jan. 1 was down 19.5 percent compared with 2019, according to Sensormatic Solutions. That was a slight improvement from the depths of the pandemic in 2020, when foot traffic in the same period was down 33.1 percent from 2019, but still a significant change.Fewer people shopped in stores this holiday season, with more consumers relying on e-commerce.Justin Sullivan/Getty ImagesAs retailers grapple with inflation and supply chain issues, it has given an additional advantage to the biggest U.S. retailers. They had already benefited during the pandemic by being able to remain open while others closed, from the variety of goods that they carry and through initiatives like curbside delivery.“We’re talking about the Walmarts and Targets and Costcos, the big players,” said Mickey Chadha, a retail analyst at Moody’s Investors Service. “They’ve leased their own ships, and they’re bringing in product. They have a lot more power with vendors to get priority. And they actually planned ahead as well.”At the same time, Mr. Chadha said, they have not had to raise their prices as much as smaller retailers, and are likely to benefit as lower-income consumers search for value to stretch their dollars.“They are taking market share because they have the ability to price lower and absorb that hit to the margin a lot better than some of the smaller, weaker retailers,” he said.Costco, for example, said on a December earnings call that it believed it was successfully managing the effects of inflation through its relative purchasing power and its relationships with vendors. That often meant that Costco and its suppliers were each taking less in the way of price markups, Richard Galanti, the company’s chief financial officer, said on the call.“We’ve always said we want to be the last to raise the price and the first to lower the price, recognizing there’s a limit to what you can do based on these cost increases,” Mr. Galanti said.How the Supply Chain Crisis UnfoldedCard 1 of 9The pandemic sparked the problem. More

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    For Retail Workers, Omicron Disruptions Aren’t Just About Health

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    Stores are shortening hours, fitting rooms are being closed and some employees can’t go on break. “Morale could not be lower,” one retail worker said.Long checkout lines. Closed fitting rooms. Empty shelves. Shortened store hours.Plus the dread of contracting the coronavirus and yet another season of skirmishes with customers who refuse to wear masks.A weary retail work force is experiencing the fallout from the latest wave of the pandemic, with a rapidly spreading variant cutting into staffing.While data shows that people infected with the Omicron variant are far less likely to be hospitalized than those with the Delta variant, especially if they are vaccinated, many store workers are dealing with a new jump in illness and exposures, grappling with shifting guidelines around isolation and juggling child care. At the same time, retailers are generally not extending hazard pay as they did earlier in the pandemic and have been loath to adopt vaccine or testing mandates.“We had gotten to a point here where we were comfortable, it wasn’t too bad, and then all of a sudden this new variant came and everybody got sick,” said Artavia Milliam, who works at H&M in Hudson Yards in Manhattan, which is popular with tourists. “It’s been overwhelming, just having to deal with not having enough staff and then twice as many people in the store.”Ms. Milliam, a member of the Retail, Wholesale and Department Store Union, is vaccinated but contracted the virus during the holidays, experiencing mild symptoms. She said that fewer employees were working registers and organizing clothing and that her store had been closing the fitting rooms in the mornings because nobody was available to monitor them.Macy’s said last week that it would shorten store hours nationally on Mondays through Thursdays for the rest of the month. At least 20 Apple Stores have had to close in recent weeks because so many employees had contracted Covid-19 or been exposed to someone who had, and others have curtailed hours or limited in-store access.At a Macy’s in Lynnwood, Wash., Liisa Luick, a longtime sales associate in the men’s department, said, “Every day, we have call-outs, and we have a lot of them.” She said the store had already reduced staff to cut costs in 2020. Now, she is often unable to take breaks and has fielded complaints from customers about a lack of sales help and unstaffed registers.“Morale could not be lower,” said Ms. Luick, who is a steward for the local unit of the United Food and Commercial Workers union. Even though Washington has a mask mandate for indoor public spaces, “we get a lot of pushback, so morale is even lower because there’s so many people who, there’s no easy way to say this, just don’t believe in masking,” she added.Store workers are navigating the changing nature of the virus and trying their best to gauge new risks. Many say that with vaccinations and boosters, they are less fearful for their lives than they were in 2020 — the United Food and Commercial Workers union has tracked more than 200 retail worker deaths since the start of the pandemic — but they remain nervous about catching and spreading the virus.At a Stop & Shop in Oyster Bay, N.Y., Wally Waugh, a front-end manager, said that checkout lines were growing longer and that grocery shelves were not being restocked in a timely manner because so many people were calling in sick with their own positive tests or those of family members.That has forced remaining employees to work more hours. But even with overtime pay, many of his colleagues are not eager to stay in the store longer than they must. Mr. Waugh has started taking off his work clothes in his garage and immediately putting them in the laundry before entering his house — a routine he hadn’t followed since the earliest days of the pandemic.Wally Waugh in his garage, where he changes out of the clothes he wears to work at a Stop & Shop to avoid possibly spreading the coronavirus.Sasha Maslov for The New York Times“People are not nervous like when Covid first started,” said Mr. Waugh, who is a steward for the Retail, Wholesale and Department Store Union. “But we are gravely concerned.”At a QFC grocery store in Seattle, Sam Dancy, a front-end supervisor, said many colleagues were calling out sick. The store, part of a chain owned by Kroger, has closed early several times, and customers are helping to bag their own groceries. There are long lines, and some of the self-checkout lanes are closed because employees aren’t available to oversee them.“Some people are so tired of what’s going on — you have some that are exposed and some that are using it as an excuse to not have to work to be around these circumstances,” said Mr. Dancy, a member of the local food and commercial workers union, who has worked at the chain for 30 years. “I have anxiety till I get home, thinking, ‘Do I have this or not?’ It’s a mental thing that I think a lot of us are enduring.”Shifting guidelines around isolation are also causing confusion at many stores. While H&M has instructed employees like Ms. Milliam to isolate for 14 days after testing positive for Covid-19, Macy’s said in a memo to employees last week that it would adopt new guidance from the Centers for Disease Control and Prevention that recommended shortening isolation for infected people to five days from 10 if they are asymptomatic or their symptoms are resolving.But even if retailers shorten isolation periods, schools and day-care facilities may have longer quarantine periods for exposed families, putting working parents in a bind.Ms. Luick of Macy’s said she felt the guidance was aimed at “constantly trying to get people to work,” and did not make her feel safer.Even as Omicron spreads faster than other variants, employers have not shown a willingness to reinstitute previous precautions or increased pay, said Kevin Schneider, secretary-treasurer of a unit of the United Food and Commercial Workers in the Denver area.Like many retailers, Kroger hasn’t provided hazard pay nationally since the early stages of the pandemic, though the union is negotiating for it to be reinstated. The chain has also discontinued measures like controlling how many customers are allowed in stores at a time. The union has been asking for armed guards at all of its stores in the Denver area as incidents of violence increase.“The company says they are providing a safe environment for workers to do their jobs in,” Mr. Schneider said. “We don’t believe that.”In a statement, a Kroger spokeswoman said, “We have been navigating the Covid-19 pandemic for nearly two years, and, in line with our values, the safety of our associates and customers has remained our top priority.”The company added that frontline employees had each received as much $1,760 in additional pay to “reward and recognize them for their efforts during the pandemic.”Some workers have reached another breaking point. In Jacksonville, Fla., one Apple Store employee organized a brief walkout on Christmas Eve to protest working conditions after he witnessed a customer spitting on his colleague. Dozens of people at other stores also participated.“It was my final straw,” said Daryl Sherman II, who organized the walkout. “Something had to be done.”In some cases, municipalities have stepped in to obtain hazard pay for workers. In Seattle, Kroger has been required to pay grocery store employees like Mr. Dancy an extra $4 an hour based on local legislation.“Some people are so tired of what’s going on,” said Sam Dancy, a front-end supervisor at QFC, a grocery store chain.Grant Hindsley for The New York TimesMore broadly, the staffing shortages have put a new spotlight on a potential vaccine-or-testing mandate from the Biden administration, which major retailers have been resisting. The fear of losing workers appears to be looming large, especially now.While the retail industry initially cited the holiday season rush for its resistance to such rules, it has more recently pointed to the burden of testing unvaccinated workers. After oral arguments in the case on Friday, the Supreme Court’s conservative majority expressed skepticism about whether the Biden administration had legal authority to mandate that large employers require workers to be vaccinated.The National Retail Federation, a major industry lobbying group, said in a statement last week that it “continues to believe that OSHA exceeded its authority in promulgating its vaccine mandate.” The group estimated that the order would require 20 million tests a week nationally, based on external data on unvaccinated workers, and that “such testing capacity currently does not exist.”When the top managers at Mr. Waugh’s Stop & Shop store began asking employees whether they were vaccinated in preparation for the federal vaccine mandates that could soon take effect, he said, a large number expressed concern to him about being asked to disclose that information.“It was concerning to see that so many people were distressed,” he said, though all of the employees complied.Ms. Luick of Macy’s near Seattle said that she worked with several vocal opponents of the Covid-19 vaccines and that she anticipated that at least some of her colleagues would resign if they were asked to provide vaccination status or proof of negative tests.Macy’s told employees last week that it would adopt new guidance from the C.D.C. that recommended shortening isolation periods.Jeenah Moon for The New York TimesStill, Macy’s was among major employers that started asking employees for their vaccination status last week ahead of the Supreme Court hearing on Friday and said it might require proof of negative tests beginning on Feb. 16.“Our primary focus at this stage is preparing our members for an eventual mandate to ensure they have the information and tools they need to manage their work force and meet the needs of their customers,” said Brian Dodge, president of the Retail Industry Leaders Association, which includes companies like Macy’s, Target, Home Depot, Gap and Walmart.As seasonal Covid-19 surges become the norm, unions and companies are looking for consistent policies. Jim Araby, director of strategic campaigns for the food and commercial workers union in Northern California, said the retail industry needed to put in place more sustainable supports for workers who got ill.For example, he said, a trust fund jointly administered by the union and several employers could no longer offer Covid-related sick days for union members.“We have to start treating this as endemic,” Mr. Araby said. “And figuring out what are the structural issues we have to put forward to deal with this.”Kellen Browning contributed reporting. More

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    Supply Chain Problems Mean Buying a Car Sometimes Takes a Plane Ride

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    The limited supply of new and used vehicles is forcing some Americans to go to great lengths to find and buy them, including traveling to dealers hundreds of miles away.When Rachael Kasper started shopping for a new car in August, she had her heart set on a Ford Escape plug-in hybrid. The problem was that Ford hasn’t made many of them this year because of a computer chip shortage that has slowed auto production around the world.Ms. Kasper first came up empty in her home state of Michigan and, later, in neighboring states. When she expanded to the East Coast, she found one — at a dealership 537 miles away, in Hanover, Pa.“I flew to Baltimore, took a Lyft to the dealer, and then drove all the way home,” said Ms. Kasper, who owns a water-sports equipment retailer. “It was quite an adventure.”The shortage of computer chips, in large part caused by decisions made in the early days of the pandemic, has rippled through the auto industry this year. Manufacturers have had to close plants for lack of parts, leaving car dealers with millions fewer vehicles to sell.As a result, car buyers have had to travel hundreds of miles to find the vehicles they want, give up on haggling and accept higher prices, and even snap up used cars that have been repaired after serious accidents.The supply squeeze coincides with an apparent increase in demand. Some people are trying to avoid mass transit or taxis. Others simply want a vehicle. Many families have saved thousands of dollars thanks in part to government benefits and stimulus payments and because they have been spending less on travel, restaurant meals and other luxuries that have fallen by the wayside because of health concerns.The end of the year is normally a peak selling season, with some automakers running ads in which cars are presented as gifts complete with giant bows. But this year consumers are finding that locating the car of their desires is not quick, easy or cheap.As Ed Matovcik, a wine industry executive in Napa, Calif., neared the end of his lease on a Tesla Model S, he decided to switch to a Porsche Taycan, a German electric car. He ordered one, but it won’t arrive until May, three months after he has to give up the Tesla.He is planning on renting cars until the Taycan arrives and is looking on the bright side. “It’s a different world now, so I don’t really mind the wait,” he said. “I’m thinking of renting a pickup for a week so I can finally clear out my garage.”The disruption to car production has rippled through the automotive world. For a time in the spring and summer of 2020, rental car companies stopped buying new cars and sold many of their vehicles to survive while travel was restricted. Now those companies are seeking to take advantage of a hot rental market and are scrambling to buy cars, often competing with consumers and dealers.The big discounts and incentives that were once standard features of car-buying in the United States have all but disappeared. Instead, some dealers now add an extra $2,000 or $3,000 on top of the list price for new cars. That has left car buyers fuming, but the dealers who are jacking up prices know that if one customer balks, another is usually waiting and willing.In November, the average price of a new car was a record $45,872, up from $39,984 a year ago, according to Edmunds, an auto-data provider. The average price paid for a used car is now more than $29,000, up from $22,679 in 2020, and Edmunds expects it to exceed $30,000 next year for the first time ever.Because of the rising prices of used cars, some consumers are spending to fix up older vehicles and keep them going for longer. More cars that have been damaged in accidents are getting fixed instead of being declared a total loss by insurers and sent to the scrap yard.“The math has changed on whether a car is totaled,” said Peter DeLongchamps, a senior vice president at Group 1 Automotive, a Houston-based auto retailer that operates its own chain of auto-body shops. “Our parts and service business is very good. We’re seeing more cars getting fixed based on the high used values.”Workers assembled a Jeep Grand Cherokee L at a Stellantis plant in Detroit in June. A computer chip shortage has slowed auto production around the world.Bill Pugliano/Getty ImagesThe auto industry’s chip shortage stems from the start of the pandemic, in the spring of 2020, when automakers closed factories for weeks and cut orders for computer chips and other parts. At the same time, homebound consumers were snapping up laptops, game consoles and other electronics, spurring makers of those devices to increase orders for semiconductors. When automakers resumed production, they found chip suppliers had less production capacity for them.As a result, automakers have produced significantly fewer trucks and cars this year than they had planned. In addition to closing plants, they’ve built vehicles without certain features, such as heated seats and electronics that maximize fuel economy. Tesla dropped power lower-back support in the passenger seat of certain models.The Coronavirus Pandemic: Key Things to KnowCard 1 of 4The Omicron variant. More

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    Why Christmas Gifts Are Arriving on Time This Year

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    Fears that a disrupted supply chain could wreak havoc on the logistics industry over the holiday turned out to be wrong as many Americans ordered early and shopped in stores.The warnings started to stream in early this fall: Shop early or you may not get your gifts on time.Global supply chain problems that have led to long delays in manufacturing and shipping could ripple outward, slowing package deliveries to millions of Americans in the weeks and days before Christmas, experts warned. The prospect even became a talking point in conservative attacks on President Biden’s policies.Despite early fears, however, holiday shoppers have received their gifts mostly on time. Many consumers helped themselves by shopping early and in person. Retailers ordered merchandise ahead of time and acted to head off other bottlenecks. And delivery companies planned well, hired enough people and built enough warehouses to avoid being crushed by a deluge of packages at the last minute, as the Postal Service was last year.The vast majority of packages delivered by UPS, FedEx and the Postal Service this holiday season are gifts destined for residential addresses, according to ShipMatrix, a software company that services the logistics industry. And nearly all have arrived on time or with minimal delays, defined as a few hours late for express packages and no more than a day late for ground shipments. The UPS and the Postal Service delivered about 99 percent of their packages on time by that measure between Nov. 14 and Dec. 11, and FedEx was close behind at 97 percent, according to ShipMatrix.“The carriers have done their part. Consumers have done their part,” said Satish Jindel, president of ShipMatrix. “When they work together, you get good results.”That’s not to say the supply chain turmoil is over. About a hundred container ships are waiting off the West Coast to unload their cargo. Big-ticket items, such as new cars, are still hard to find because of a shortage of some critical parts like computer chips. And prices are up for all kinds of goods.But at least when it comes to items that are in stock, delivery companies have given consumers little to complain about. By some measures, in fact, they have done a better job this holiday season than even before the pandemic. In the two full weeks after Thanksgiving, it took about four days from the moment a package was ordered online for it to be delivered by FedEx, according to data from NielsenIQ, which tracks online transactions from millions of online shoppers in the United States. That compares with about 4.6 days for UPS and more than five days for the Postal Service.For UPS and FedEx, those figures are an improvement of about 40 percent from a similar post-Thanksgiving period in 2019, according to NielsenIQ. For the Postal Service, it was a 26 percent improvement.“There’s all these different moving parts that have collaborated to help us get through what might have been a perfect storm to cause problems,” Bill Seward, president of worldwide sales and solutions for UPS, said in an interview. “We feel really good about where we’re at right now.”The achievement is all the more notable given that Americans are on track to spend more this holiday season than the one before — up to 11.5 percent over 2020, according to the National Retail Federation, a trade group.But this year has been different in a critical way: Many people started shopping earlier.The vast majority of packages delivered by UPS, FedEx and the Postal Service this holiday season are gifts destined for residential addresses.Desiree Rios for The New York TimesConsumer surveys, including those commissioned by UPS and NPD Group, a market research firm, found that Americans accelerated their holiday shopping this year, motivated by shortages, shipping delays or earlier sales from retailers.Jennifer Grisham, who lives in Southern California with her husband and three young children, was among them. Concerned by news of supply chain disruptions, Ms. Grisham asked her children to draw up their Christmas wish lists before Halloween, weeks earlier than usual. She had finished shopping by the day after Thanksgiving, which is usually when she starts buying gifts.“I have three kids who still believe in Santa Claus,” she said. “I was not going to bookend these two really dramatic years for us with them suddenly not getting what they wanted.”Ms. Grisham said she had little trouble finding the big-ticket items she pursued: a Barbie Dreamhouse for one daughter, Lego sets for her son and a cat condo for her other daughter, who plans to use it as a home for her stuffed animals.“I’m happy that I got it done early, because I didn’t have to worry about the risk,” she said.Retailers enticed consumers to shop early. Amazon and Target, for example, began holiday deals in October. According to Mr. Seward at UPS, 26 of the company’s 30 largest retail customers started offering substantial deals before Black Friday.Many Americans also eased pressure on UPS and other delivery companies by doing more shopping in stores. After consumers switched to online shopping in droves when the pandemic took hold last year, in-store shopping bounced back strongly this year, according to retail and logistics experts. In September, in-store sales accounted for about 64 percent of retail revenue, up 12 points from its low point during the pandemic, but still somewhat below 2019 levels, according to NPD Group.“We miss people,” Katie Thomas, a top consumer analyst at Kearney, a consulting firm, said about the compulsion to visit stores rather than buy online. “There’s a pent-up demand. We’re seeing people want to dress up again.”Retailers and delivery companies also worked behind the scenes to make sure the supply chain disruptions did not wreak havoc on holiday packages. Retailers worked harder to forecast sales and moved inventory to areas where UPS, FedEx and others had more capacity to pick up packages. Companies that previously relied mostly or exclusively on a single delivery service started doing business with several companies.The delivery companies have spent the past two years building out capacity, too, in response to surging demand. UPS, which in the past did not make deliveries on Saturday in much of the country, has been expanding its weekend service for years. It now offers Saturday deliveries to about 90 percent of the U.S. population. FedEx has added nearly 15 million square feet of sorting capacity to its network since June. And, starting in the spring, the Postal Service, which processes more mail and packages than the other delivery businesses, started leasing additional space and installing faster package-sorting machines around the country.A post office distribution center in Los Angeles last month was already in the holiday swing.Mario Tama/Getty ImagesThe companies have also responded by raising rates, imposing surcharges for larger packages that could slow down their networks, limiting the number of packages they will accept at busy times and penalizing retailers that ship many more or many fewer packages than they had forecast.“We used to think that every package was the same,” Carol Tomé, UPS’s chief executive, told financial analysts in October, explaining her strategy of focusing on quality over quantity. “We don’t think that anymore. So for some shippers, we’re no longer delivering their packages, and that’s OK with us.”The Postal Service doesn’t have the luxury of easily turning away business, but even it has done a better job of managing expectations for holiday package deliveries. Despite the introduction of its first-ever holiday surcharge last year, its delivery performance suffered. This year, however, it has fared much better, thanks to 13 million square feet of new processing space, 112 new high-speed processing machines and the decision to hire peak-season workers earlier.“U.S.P.S. is maybe the most exciting story of all,” said Josh Taylor, senior director of professional services at Shipware, a consulting firm. “The fact that they’re not overwhelmed, that their network can continue to deliver on time, it’s a great development for consumers.”But the holiday crunch does not end on Christmas. Online returns will keep delivery companies busy for weeks.And the pandemic is not yet over. Fear over the spread of the Omicron variant of the coronavirus could drive consumers back to online shopping in the months to come, which would impose new pressures on delivery companies and retailers. More

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    Retail Sales Rose in November as Holiday Shopping Began

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    Retail sales rose for the fourth straight month in November, as consumers in the United States continued to spend even as they faced fast rising prices and an upswing in coronavirus infections.The 0.3 percent increase in sales last month reported by the Commerce Department was a slowdown from the month before — something that analysts said likely reflected a shift in the start of the holiday shopping season to October. Sales growth in October was revised slightly higher on Wednesday to 1.8 percent.Consumers, motivated by news of product shortages and fast rising prices, began their holiday shopping well before the Thanksgiving holiday, which is seen as the traditional start of the holiday shopping season.“We saw consumers thinking of inflation and supply chains being chocked, so the ultimate pantry loading happened in October,” Kathy Gramling, a consumer industry markets consultant for EY.As overall sales rose, spending — the key drivers of U.S. economic activity — at grocery stores and liquor stores, gas stations, clothing retailers and home improvement stores increased. Sales declined in several categories however: Spending at electronics and appliances stores fell 4.6 percent last month, while sales at car dealers and general merchandise stores, such as department stores, were down as well. Health and personal care stores, such as pharmacies, also saw a decrease of 0.6 percent.Ms. Gramling said retailers were likely to face logistical issues in January, when consumers come back to stores with returns from the holiday season.The latest measure of sales — the key driver of economic activity in the United States — comes as consumers are grappling with high inflation and a predicted surge in coronavirus infections. The sales data for November does not reflect how shoppers might have reacted to the emergence of the Omicron variant, which started to make headlines during the Thanksgiving weekend.But for now, economists expect that sales will continue to rise in December.A reading on consumer sentiment, measured by a University of Michigan survey on how Americans view the general state of the economy, increased in December after falling to its lowest level in a decade in early November. Those surveyed pointed to inflation as the most serious problem the country faces, according to preliminary results published on Friday.Also on Friday, the Labor Department reported that consumer prices had risen at their fastest pace in nearly 40 years. The Consumer Price Index was up 6.8 percent last month compared with a year earlier as demand for products remained strong and the virus continued to disrupt manufacturing and transportation.U.S. consumers were not slowed by surging coronavirus cases in November, when more than 30 states saw sustained increases in infections and hospitalizations climbed in certain areas of the country. More

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    Biden Projects Normalcy and Optimism as Omicron Poses New Threat

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    The president tried to convey holiday cheer as he celebrated Hanukkah and downplayed virus concerns as the variant was detected in California.WASHINGTON — With prices rising across the economy and a new variant of the coronavirus threatening another wave of the pandemic, President Biden stepped to a White House microphone and tried to convey a sense of normalcy.“We’re looking ahead to a brighter and happier December,” Mr. Biden said on Wednesday. He ticked through a list of actions by his administration that he said would help ensure fully stocked shelves in groceries and retailers through the holidays.Asked by reporters if he was worried that the Omicron variant, which officials announced later in the day had been detected in California, would threaten that progress, the president was undeterred.“I’m an optimist,” he said.It could be a long and anxious December for many Americans, given that inflation is at its highest rate in decades, global delivery delays are limiting the availability of some products and the uncertainty of Omicron is looming over what was already a halting recovery from recession. On Wednesday, the stock market tumbled for a second consecutive session, with the S&P 500 closing down 1.2 percent after the Omicron news broke. The Nasdaq composite lost 1.8 percent.Mr. Biden, for his part, tried to reassure Americans that this holiday season would be better than the last.He stacked his day with policy pronouncements on supply chains and World AIDS Day and ended it with a White House ceremony for the fourth night of Hanukkah, a throwback to prepandemic celebrations in Washington. He stressed the positives of the national economy.His top infectious disease expert said it was OK for Americans to enjoy a glass of eggnog, unmasked, at a cocktail party this month — under certain circumstances, at least.It was the president’s latest attempt to balance the nation’s desire to return to something resembling a normal life with the bracing reality that the virus is continuing to kill nearly 1,000 Americans a day, and still disrupting economic activity.Global supply chains have been choked by the pandemic recession and recovery, leaving many Americans, Mr. Biden noted, to fear they will not be able to find the food or toys they want for their celebrations.The president said those fears would prove largely unfounded, claiming progress from his administration’s actions to clear port backlogs and ease the delivery of more goods to market at a time when Black Friday sales jumped nearly a third from the year before.He cited comments and commitments from a wide range of retail executives he met with on Monday at the White House to discuss inflation and supply issues, saying that physical and online retailers alike had assured him they were well prepared for a rush of spending.“Those shelves are going to be stocked,” Mr. Biden said.Mr. Biden also emphasized slight improvement on the price spikes that have depressed consumer confidence and his approval ratings, including increases for food, appliances and gasoline. He said his decision last week to release 50 million barrels of oil from the nation’s emergency reserves had already begun to reduce oil prices worldwide and would soon provide relief at the pump.The big dip in prices in recent days has come not from the release of reserves, coordinated with several other nations, but from fears that Omicron will once again depress driving and other demand for oil as it rips through the world economy.Businesses continue to struggle to overcome supply chain delays. According to a new index published by Flexport, a global freight forwarder, shipping times from Asia to the United States and from Asia to Europe remain at or near record highs — and double what they were in March 2019.A surge in the Omicron variant could lead to further delays, if ports and factories shutter and warehouses and trucking companies have an even harder time finding people to work. This year, China shut down some of its most active ports after small outbreaks of the virus as it sought to quickly contain its spread.Health experts have not yet determined the answers to crucial questions about how the variant might behave, including whether it might prove more adept at evading vaccines, which would in turn determine how much it might crimp growth or affect inflation. Analysts have warned in recent days that it is throwing new uncertainty into their forecasts.Researchers at BNP Paribas wrote on Wednesday that the variant presented several possible scenarios for the global economy, ranging from a relatively minor bump that passes quickly to a “significant near-term hit to economic activity.” Analysts at Moody’s wrote that “business plans to gradually return to a post-pandemic new normal are now uncertain.”Mr. Biden sided with the brighter view, telling reporters that “what we’ve seen so far does not guarantee” that the variant will worsen supply chain issues.Dr. Anthony S. Fauci, the nation’s top infectious disease expert, told reporters in an ensuing briefing at the White House that the variant was no reason for Americans who were already vaccinated and boosted to change their behaviors beyond existing guidance from federal officials. Asked if Americans should feel free to attend holiday parties and drink unmasked, Dr. Fauci said it depended on the size of the gathering.Dr. Anthony S. Fauci said the variant was no reason for Americans who were already vaccinated and boosted to change their behaviors beyond existing guidance from federal officials.Doug Mills/The New York Times“In a situation with a holiday season, indoor-type settings with family that you know is vaccinated, people that you know, you can feel safe with not wearing a mask and having a dinner, having a reception,” he said. But in larger public settings where it is unclear if everyone is vaccinated, he said, people should wear masks except to eat or drink.Mr. Biden and other Democrats sprinkled holiday reminders through the rest of the day, with only brief references to Omicron. The president spoke at a ceremony to light the menorah on Wednesday evening, in a packed ceremony that included Senator Chuck Schumer of New York, the chamber’s first Jewish majority leader.Mr. Schumer struck a more somber tone than the president earlier in the day, saying that the season “is a reminder that in the face of awful adversity we cannot lose faith in God’s providence. In the face of darkness, Hanukkah teaches that rather than curse the darkness we must light a candle.”Mr. Biden held his celebration of World AIDS Day in the East Room, which was decked with several Christmas trees, and with wreaths hanging over its mirrors. He began his supply chain remarks in the South Court Auditorium — which was adorned with flags, not tinsel — by noting he would light the National Christmas Tree on Thursday evening.Even when he talked about global shipping, Mr. Biden could not resist a holiday reference. Mr. Biden recalled runs on hot toys, like Cabbage Patch Kids in the 1980s and Beanie Babies in the 1990s, “in past years when there was no supply chain problem.”Shipping companies like UPS and FedEx this year are on track to deliver more packages than ever, Mr. Biden said. But he offered a caveat for children: “I can’t promise that every person will get every gift they want on time. Only Santa Claus can keep that promise.”Ana Swanson More

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    Supply Chain Problems Have Small Retailers Gambling on Hoarding

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    Megan Searfoss has been hoarding sneakers in Connecticut.Ms. Searfoss, the owner of two running stores in Darien and Ridgefield, Conn., would normally have about 3,000 pairs of shoes in stock ahead of the holiday season. But as she watched supply chain concerns in Vietnam mount this summer and into the fall, she secured a new storage facility and is now carrying around 4,100 pairs.It’s a costly gamble for Ms. Searfoss, who said she is extended about $165,000 more than she would typically be in November because of worries about potential shortages.“It’s placing a big bet and anticipating that what all the analysts are saying is correct,” Ms. Searfoss said. “Usually, we get through the New York City Marathon and then we stop buying shoes — we sell off what we have and go into January super, super lean. But we’re being told not to do that because there’s just not going to be any shoes.”The buildup of running shoes in Connecticut is just one example of how supply chain woes and pandemic-related shortages are affecting thousands of small businesses around the United States this holiday season. While the widespread availability of vaccines is translating into a busier shopping season than last year, businesses of all sizes are grappling with the impact from factory shutdowns overseas, backups at ports, and trucking and other labor shortages.For many small businesses, the unpredictability this year has forced them to make buying decisions months or weeks earlier than they normally would and to tie up more of their cash in inventory, which can be risky.“The big thing is you really have to order in advance,” said Dan Quinn, an owner of What We Make, a furniture business in Algonquin, Ill., which sells tables and other wares through Etsy. “I’ve got 14 weeks of projects. I need to get most of that material in house as fast as possible and keep buying it until you have a stockpile basically.”Angela Arnold owns Playmatters Toys in Ohio with her husband.Angelo Merendino for The New York TimesThey ordered some toys in mid-May but still haven’t been able to stay ahead of the supply chain issues.Angelo Merendino for The New York TimesWhile many small businesses are affected by manufacturing issues overseas, some have used this moment to their advantage. Etsy, which powers online stores for millions of sellers, said that more than half of its U.S. vendors source materials from within their own states, allowing them to bypass many of the supply chain problems that are impacting the global economy. Etsy stores “don’t have the complex supply chains that are vulnerable to single points of failure,” Josh Silverman, Etsy’s chief executive, said in an interview.Still, the range of shortages can manifest themselves in unusual ways.Isabel Amigon, owner of the online store Sololi, is still waiting on an order of Christmas tree ornaments she placed in April. The manufacturer alerted her that the order would be delayed because of a shortage in strings to tie on top of the decorated orbs.Ms. Amigon, who is based in Westchester County, N.Y., said that she was worried that if she didn’t get them in time for the holiday season, she would have to wait until next year to make use of the inventory. The string shortage has also led her to remove specific home goods items from her website, such as table runners and washcloths.“Even if I get them by the end of November, I won’t be able to sell all of them because most people have already bought their ornaments,” Ms. Amigon said. “I placed the orders early and I still have to face this situation.”Other missing items are more traditional than string.“Some things we ordered in June and July are still coming in,” Sean Arnold, an owner of Playmatters Toys, said.Angelo Merendino for The New York TimesEarlier this year, Angela and Sean Arnold were planning to order another set of Disney princess dolls to fill some shelves in their toy store, Playmatters Toys, in Pepper Pike, Ohio. But they got a notification in September from the distributor alerting them and other toy store owners that the items were “indefinitely out of stock” because the factory in Vietnam where the dolls are manufactured was shut down because of a Covid-19 outbreak.Even though they anticipated shipping delays and ordered some toys in mid-May instead of August, they could not get ahead of the global disruption.And it’s not only dolls. The couple has been missing out on other toys and electronics because of shipping delays or disruptions in manufacturing plants in Vietnam. The couple has also been forced to raise prices on some products as they face higher transportation and wholesale costs from toy vendors.“Some things we ordered in June and July are still coming in,” Mr. Arnold said.Because of these kind of delays, Etsy has viewed this moment as one in which small businesses can provide gift options that are not reliant on overseas factories and shipping. Extra consumer interest in small businesses, whether online or offline, would likely be welcome after the pandemic dealt a crippling blow to so many last year.Etsy said it had seen searches for living room furniture soar by 1,572 percent and less dramatic but significant jumps for dining tables, checkers or chess boards, suggesting that some shoppers are coming to the site rather than going to chain stores.The bookstore owner Jeannine Cook said customers have canceled orders because publishers have had trouble delivering books.Mark Makela for The New York TimesEtsy learned how to better handle large surges in demand after face masks exploded as a category on the site during the onset of the pandemic and it has made improvements designed to mitigate shipping issues it experienced then. Mr. Silverman said that now, virtually all items from sellers in the U.S. have an expected delivery date, which was not the case a year ago, and shoppers can filter products by geography to shop from vendors in their area, which can help accelerate shipping.The company also said it checks in with sellers to ensure they have enough raw materials and supplies when its technology observes jumps in demand for specific items.Mr. Quinn, the owner of the furniture seller What We Make, has seen his business boom as Americans grapple with long wait times and lack of availability for furniture from chains. Customers have been willing to wait 10 weeks for a dining table from him, particularly after seeing 20-week waits at chains like West Elm.“The big box stores don’t have a lot of things they normally have so the positive for us is that people are sort of forced to look at other options whereas before they’d settle for the simplest option,” he said.Still, he has seen his business disrupted in other ways, including a sharp increase in material prices and a scramble for reclaimed wood, which typically comes from old barns.“The people who take down the barns for the material we use, a lot of them ended up getting laid off or going on unemployment,” Mr. Quinn said. “So we have had to try to stockpile material and order well in advance of what we used to do.”“It makes me nervous because I don’t want folks to feel like they can’t get what they need or want,” Ms. Cook said.Mark Makela for The New York TimesWhile Mr. Quinn has been thriving in spite of competition from major furniture sellers, the country’s biggest retailers are often better equipped to handle supply chain issues than small businesses. Companies like Walmart and Amazon are massive enough that they can charter airplanes to obtain certain goods.Jeannine Cook doesn’t have that luxury. Ms. Cook, the owner of Harriett’s Bookshop in Philadelphia, noticed during the summer that publishers were having trouble delivering her book orders, with some unable to even provide a timeline for when orders would arrive. The problem became more widespread in late August.Ms. Cook, who opened a second location in Collingswood, N.J., in July, said that more customers were canceling their orders from the bookshop.“It makes me nervous because I don’t want folks to feel like they can’t get what they need or want,” Ms. Cook said. “It’s hard because we’re already up against the big-box companies that have so much more infrastructure than we do.”Ms. Searfoss said she sometimes got nervous thinking, “look at all that I’ve bought.”Christopher Capozziello for The New York TimesA recent study by Adobe showed that out-of-stock messages in October more than quadrupled compared with October 2019. That’s one reason that the retail industry, including small businesses, have urged the public to shop early this year to secure gifts for the holiday season.“I hate that we have now gone right from Halloween to Christmas,” said Ms. Searfoss, the proprietor of the running stores, who said that she began holiday marketing on Nov. 1 for the first time. “I don’t want people to feel frantic but I do think it’s pretty serious that they’re not going to get what they want this year.”She anticipated that shipping delays and out-of-stock issues at bigger chains might drive business to her stores. “People, those days before Christmas, will be buying whatever they can from whatever local store they can,” she said.“It’s just a little bit stressful for me, thinking, ‘OK, look at all that I’ve bought,’” Ms. Searfoss said. “If I buy it, will they come?” More