June 2, 2023

Today's Topics

Hello! If your resume is built largely around your ability to endure hot, uncomfortable clothing and a penchant for crowd work, we have a lucrative career suggestion for you… Rocky, the NBA's highest-paid mascot, reportedly takes home a staggering $625k each year. Today we’re exploring:

  • Dime a dozen: The explosion of dollar stores in the US.
  • Stagnation: America's birth rate stayed remarkably steady in 2022.
  • Buoyed by Beijing: China's been huge for Tesla through the years.
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Generally speaking

Discount retailer Dollar General had some of its value stripped yesterday, with shares sinking nearly 20% to a 3-year low point after an earnings report that saw the company temper its outlook as revenue grew just 6.8% year-over-year to $9.3 billion, some way short of estimates.

That's compounded quite a rough patch for Dollar General — the chain store is facing scrutiny over employee security with investors forcing through a safety audit — as well as for the dollar store industry more widely. Indeed, just last week fierce competitor Dollar Tree’s Q1 report told a similarly-disappointing story.

Dime a dozen

While dollar stores don’t always strictly stick to the price point their names suggest, though they aren’t often far off. That’s made the retailers particularly popular in recent years as more American shoppers turn to discounters for low-cost staples. Big brands are following too, with companies like Kraft Heinz and Hershey’s reportedly looking to increase shelf presence in the booming budget stores.

Even if sales have started to lag a little, America's increased appetite for the discounters has certainly been reflected in the retailers' location counts. In 2012, there were 10,506 Dollar General stores in the US, last year that number was up over 80% to a whopping 19,104. Dollar Tree has shown similar growth, with locations up 74% in the same period, adding even more outlets under its umbrella after acquiring Family Dollar in 2015. At one point it was estimated that the 3 chains collectively accounted for ~45% of US store openings in 2021.

Natal stagnation

America’s birth rate stayed relatively steady in 2022, welcoming 3.66m newborns last year, according to preliminary data released on Thursday by the CDC — that’s down only ~3,000 from 2021 when the birth rate rose for the first time since 2014.

Although the effects of the pandemic are still being felt and the mortality rate remains elevated, US deaths fell by nearly 200,000 in 2022, seeing the nation’s natural population grow by ~385,000.

Falling short

Despite that growth in the last 2 years, the nation’s fertility rate still sits at 1.7, some way off the “replacement rate” of 2.1 which (in theory) assures the population maintains its current level. With notable exceptions in 2006 and 2007, the US has remained below the 2.1 figure for over 50 years.

Interestingly, the teenage birth rate hit an all-time low in 2022, with just 13.5 babies born per 1,000 Americans aged 15-19, down 3% from the 2021 figure and a staggering 80% from the peak of US teen pregnancy in 1991.

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Beijing beckons

On Tuesday, Elon Musk's private jet touched down in Beijing, marking his first visit to China in over 3 years. The billionaire met with the nation's foreign, commerce, and industry ministries and shared an extravagant 16-course meal with the chairman of CATL, China’s leading battery supplier.

The country, home to more than 50% of electric vehicles on the world’s roads, has become an increasingly important market for Musk's Tesla. Indeed, in the company’s most recent quarter, China contributed ~$5 billion in revenue, accounting for 21% of the total figure. Tesla does a great deal of manufacturing in the nation too — its most productive factory, located in Shanghai, churned out over 700,000 Model Y and Model 3 vehicles last year, over half of the company's global output.

Complicated relationship

As relations between the US and China strain, businesses are finding themselves caught in the middle. Just last week, China blacklisted US memory chip maker Micron. Given the immense value of the Chinese market to Tesla, it’s unsurprising that Musk opposes the idea of "decoupling" between the world's 2 largest economies.

The value of the relationship is felt both ways, however. Foreign investment in China slumped 74% in 2022, an 18-year low. And, while the nation's stringent lockdowns contributed to the downturn, the reopening of the economy has only yielded a modest 6% increase. A recent survey revealed that, for the first time in ~25 years, China isn’t a top three investment priority for a majority of US firms — a clear sign that maintaining strong ties with companies like Tesla is perhaps as important to the nation as it is to the businesses themselves.

More Data

Amazon has been fined $30m over Ring and Alexa privacy violations.

• An Indian official landed himself in hot water after draining an entire reservoir to retrieve his $1,200 Samsung phone.

• Billionaire Jeff Bezos begins to look like a spring chicken at 59 after a new study found the median age of those in the 10-digit club is 67.

Hi-Viz

• Explore all the “active sidewalk shed permits” (read: scaffolding) currently clogging NYC streets.

Charting the most expensive cities in America for childcare.

Off the charts: Which company, that’s built a remarkable direct-to-consumer business since 2016, saw shares surge after reporting 24% sales growth in its latest quarter? [Answer below].

Answer here.

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