March 27, 2024

Today's Topics

Good morning. The tragic news of the Francis Scott Key Bridge in Baltimore collapsing on Tuesday morning has rocked the US, with 6 missing workers now presumed dead. Today we explore:

  • Track record: Vinyls are outselling CDs once again.
  • Up and down jackets: Canada Goose’s sales growth is slowing.
  • Krispy Kreme dreams: McDonald’s is teaming up with the doughnut maker.
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Track record

Almost a century after the first long-playing record was pressed, it seems that vinyl still ain’t dead.

A new report from the Recording Industry Association of America (RIAA) yesterday revealed that people in the US bought a collective 43 million vinyl records last year — some 6 million more units than the number of CDs sold, marking the second year running that the vintage format has won out.

While streaming remains king, making up ~84% of US recorded music revenues, vinyl sales still raked in an estimated $1.4bn, compared with just $537m for less pricey CD formats.

Turning tables

With sales peaking in the late 1970s, before it was dethroned by CDs/cassettes in the 80s and throughout the 90s and 00s, vinyl’s popularity has seen a resurgence over the past decade, in no small part because of its modern day consumer advantage over other mediums: the “cool factor”.

But, hipsters aside, the recent uptick can also be attributed to vinyl records breaking into the mainstream, with Kendrick Lamar, Harry Styles, and Lana Del Rey all releasing their latest albums on wax — as well as megastar Taylor Swift, whose album 1989 (Taylor's Version) was the best-selling vinyl LP of 2023, making up 7% of all US vinyl album sales last year.

Feeling the chill

Canada Goose, the outerwear brand favored by chilly film set workers and heat-seeking high-end shoppers, yesterday announced plans to shed ~17% of its corporate workforce as part of a cost-cutting “Transformation Program”. The layoffs could affect ~150 staff as the brand, where you can pick up a parka for $1850, looks to slash overheads.

In the wake of the pandemic, the experience economy boomed, and, so far, it’s showing few signs of slowing down. Meanwhile, demand for luxury items has started to slip as years of inflation have led to American consumers tightening their belts... a trend that almost certainly played a part in Canada Goose’s North American sales dropping 14% last quarter.

Furgive and furget

Slumping sales in its homeland and the US didn’t stop the brand from shipping more than $600m globally — buoyed by strong demand in China — but it does suggest that the feather-stuffed company’s golden days of growth are behind it. Even so, the ultra-warm coats still see seasonal sales surges as temperatures drop, despite its controversial insulating methods.

Canada Goose has long faced criticism from animal rights activists for its use of coyote fur to line its hoods, but the company’s decision to move away from buying new fur has helped it score with younger shoppers in particular: last year, over 50% of its customers were millennials or younger.

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Imagine you are a Krispy Kreme executive, tasked with working out how to sell more than the $1.7 billion worth of doughnuts that your company shipped last year, and maintain the decade-plus streak in revenue growth. New flavors, more stores, and marketing might help, but your dream partnership would involve getting the product in front of millions of already-hungry people ready to treat themselves.

That dream became a reality this week, after McDonald’s announced plans to sell Krispy Kreme’s famous glazed rings at all of the burger chain’s ~13,500 US locations by the end of 2026, supersizing their existing partnership and sending DNUT shares up a stunning 39% on the news. The deal follows other recent savory/sweet fast food collabs like Wendy’s/Cinnabon and Subway/Auntie Anne’s.

Double glazed

The rollout will require the doughnut-maker’s distribution to more than double to satisfy demand — and, in addition to reaching millions more sweet-toothed customers, the company intends to build on the ~6,800 third-party stores (like gas stations and grocery stores) that it already serves across America. Both are perfect examples of the chain’s “hub and spoke” model, which uses nucleated production sites (hubs) to make doughnuts that are delivered to nearby locations (spokes).

Down the hole: Krispy Kreme may be on a sugar-induced high now, but its shares have actually lagged over the past year, in part due to fears that the popularity of weight loss drugs like Ozempic may reduce the nation’s appetite.

More Data

Not nineteen forever: Trader Joe’s famous 19 cents banana is getting more expensive for the first time in over 20 years, with the store upping the price to 23 cents.

• The iconic door from Titanic, which many argue to this day could easily have carried both Jack and Rose safely to shore, just fetched ~$719k at auction.

• A single ticket in New Jersey just scooped the $1.13 billion Mega Millions jackpot — the 8th largest lottery payout in US history.


• Time share: Visualizing the brands with the biggest splits of the Swiss watch market.

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