Sorry, we can’t hear you through all the economic noise

Summary

Marketplace Podcast Summary: "Sorry, we Can’t Hear You Through All the Economic Noise"
Release Date: January 20, 2025
Host: Kai Ryssdal
Guest: Sudeep Reddy, Politico
Contributors: Sabri Benishore, Sonal Desai, Gargipal Chowdhury, David Kraus, Kristen Schwab, Kellen James

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1. Setting the Economic Stage: The New Trump Administration

Timestamp: 00:32 – 05:38

As the United States enters the second term of President Trump, host Kai Ryssdal and guest Sudeep Reddy from Politico delve into the economic landscape that lies ahead. Despite the President’s optimistic inaugural remarks, the economy remains robust, characterized by elevated prices yet admired globally.

Key Points:

• Economic Strength: The U.S. economy is portrayed as strong, with low unemployment and high oil production. Reddy notes, “President Trump could come into office right now and start talking about how we have low unemployment record… and probably make people believe it” (01:34).
• Policy Implications: Trump’s potential policies, including drilling initiatives and tariff impositions, could have inflationary effects. Ryssdal highlights the dissonance between production levels and Trump’s promises: “...he said he's going to set up a Department of External Revenue to collect tariff income even though... consumers pay those tariffs” (02:13).
• Federal Reserve Response: The discussion shifts to the Federal Reserve’s role in managing potential inflation caused by new administration policies. Reddy explains, “Every time we see one of these actions, it will raise the expectation that interest rates will have to stay higher” (03:27).
• Administrative Accountability: Ryssdal questions the immediate economic accountability placed on the new administration, with Reddy responding that rapid policy changes could have noticeable economic impacts: “...if he wants to come in right now and do day one actions, then it becomes his” (04:23).

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2. Global Bond Markets: Rising Yields and Economic Signals

Timestamp: 05:37 – 10:49

The podcast transitions to a detailed analysis of the bond markets, featuring insights from Sabri Benishore and Sonal Desai. The global rise in bond yields signals investor expectations of a stronger economy grappling with persistent inflation.

Key Points:

• Understanding Bonds: Sabri Benishore explains, “Bonds are literally loans to a government... [they] pay you interest. That's the yield” (06:57).
• Rising Yields: Investors are moving away from long-term bonds seeking higher returns, reflecting a shift in economic expectations. Desai notes, “It's been a pretty significant move to higher yields” (07:37).
• Global Trends: The increase in bond yields is not isolated to the U.S. Desai states, “This is Australia story and Italy story of France... the UK, Canada have seen higher rate” (07:55).
• Economic Implications: Higher bond yields translate to more expensive borrowing costs across the economy, potentially signaling the end of the era of cheap money. Reddy comments, “Higher yields make borrowing more expensive, not just for governments, but for companies, people buying homes” (10:11).

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3. Impact of Natural Disasters: LA Fires and the Housing Market

Timestamp: 10:49 – 23:19

Marketplace reporter Matt Levin examines the devastating impact of the Palisades and Eaton fires in Los Angeles, which have destroyed over 15,000 structures, including homes. The aftermath poses significant challenges to the housing market, exacerbating existing inventory shortages and driving up prices.

Key Points:

• Housing Market Strain: Real estate expert Lexi Newman highlights the sudden loss of semi-affordable housing in Altadena, which could strain nearby markets like Pasadena and Alhambra: “The sudden disappearance of semi affordable supply won't help buyers” (11:37).
• Insurance Concerns: David Kraus expresses worries about the rising cost of homeowners insurance, which is becoming a critical factor in buyer-seller negotiations (12:28).
• Historical Precedence: The 2017 Wine Country fires led to increased demand for affordable housing further away. Newman anticipates similar patterns emerging from the current fires: “...people looking for more affordable options a good 100 miles away” (13:03).
• Community Resilience: Realtor Aaron Stumpf notes that despite the challenges, the community adapts by seeking low-risk areas, although these are becoming scarce: “Those low risk areas are increasingly tough to find now” (13:13).

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4. Retail Sector: Bankruptcy Increases Amid Strong Consumer Spending

Timestamp: 18:56 – 23:19

The episode addresses the paradox of rising bankruptcy filings among retailers despite robust consumer spending. Kristen Schwab explores how discount retailers like TJ Maxx are thriving while many other retailers struggle.

Key Points:

• Bankruptcy Surge: In 2024, approximately 50 retailers filed for bankruptcy, closing over 7,000 stores—a 70% increase from the previous year, according to coresight Research (18:56).
• Discount Retail Success: TJ Maxx exemplifies resilience by offering constantly rotating inventory and unbeatable deals. Shopper Callie Connolly shares her positive experiences: “I found a... favorite thing I've ever owned. For sure. Love it” (19:55).
• Industry Challenges: Retail experts discuss the difficulty of balancing online presence with in-person experiences. Nicole D. Horatius states, “The big challenge for retailers right now is they kind of have to be everywhere online, in person and everything in between” (20:43).
• Market Consolidation: Larger retailers like Walmart, Amazon, and Costco dominate the market, leaving smaller players to focus on niche markets or specific strengths to survive (21:55).

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5. Retail Micro Perspective: Silhouette Sneakers and Community Engagement

Timestamp: 23:19 – 26:13

Kellen James of Silhouette Sneakers and Art in Tulsa shares his strategies for thriving in a challenging retail environment by fostering community connections and focusing on customer engagement.

Key Points:

• Inventory Management: James emphasizes careful inventory selection, aiming to stock items that customers desire: “...planning out the stuff that I really want to make sure I get a hold of” (23:37).
• Community Involvement: Hosting events like bingo nights and pop-up shops helps integrate the store into the local community, beyond just selling products (24:53).
• Customer Relationships: Building strong connections with customers ensures loyalty despite higher prices: “I want to try to find ways to connect with people... more than just what's on the walls and on the racks” (25:00).

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6. Trade Policy Update: Scottish Haggis Enters U.S. Market

Timestamp: 26:13 – 23:19

In a lighthearted segment, Marketplace covers Scotland’s biggest haggis maker’s efforts to create a U.S.-compliant version of the traditional delicacy, adapting to meet regulatory standards.

Key Points:

• Product Adaptation: McSween of Edinburgh is developing a haggis variant without sheep’s lung, replacing it with sheep heart to comply with U.S. food regulations: “They're going to make it with sheep heart, which is better?” (26:13).
• Trade Relations: This move signifies potential easing of long-standing trade barriers between Scotland and the U.S., opening new market opportunities (26:13).

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Conclusion

The "Marketplace" episode titled "Sorry, we can’t hear you through all the economic noise" provides a comprehensive overview of the current economic climate amidst a new presidential term, rising global bond yields, the impact of natural disasters on housing markets, challenges and successes within the retail sector, and unique trade developments. By navigating through various economic indicators and expert analyses, the episode paints a nuanced picture of an economy facing both resilience and uncertainty.

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Notable Quotes:

• Sudeep Reddy: “...if he wants to come in right now and do day one actions, then it becomes his” (04:23).
• Sonal Desai: “It's been a pretty significant move to higher yields” (07:37).
• David Kraus: “The big challenge for retailers right now is they kind of have to be everywhere online, in person and everything in between” (20:43).
• Kellen James: “I want to try to find ways to connect with people... more than just what's on the walls and on the racks” (25:00).

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This summary encapsulates the key discussions and insights from the "Marketplace" episode, providing listeners with a clear and detailed understanding of the economic issues addressed.

Transcript

[Ryan Reynolds]

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[Kai Ryssdal]

Switch upfront payment of $45 for 3 month plan equivalent to $15 per month Required intro rate first 3 months only, then full price plan options available, taxes and fees extra. See full [e-mail].

[Kyle Ryssdal]

Well, here we go again from American Public Media, this is Marketplace in Los Angeles. I'm Kyle Rysdal. It is Monday today, the 20th of January. Good as always to have you along, everybody. We have arrived at day one of the second Trump term. There are twists and turns aplenty ahead to be sure, but we are going to take a couple of minutes here to set the economic stage for the next four years. Sudeep Reddy is at Politico. He also moonlights with us on Fridays every now and then. Hey, Sudeep.

[Sudeep Reddy]

Hey, Kai. Happy Monday, I think.

[Kyle Ryssdal]

Happy Monday, I think. So. Look, let's benchmark this here for a second. Despite what the president, I almost called him President elect. Despite what the president said in his inaugural address today, the American economy is strong. Yes, prices are elevated, but by and large, this economy is the envy of the world.

[Sudeep Reddy]

Yeah, President Trump could come into office right now and start talking about how we have low unemployment record, oil production, lower boarding border crosses, crossings than we had when he left office, a whole host of things. And just by being a better communicator than his predecessor was, he could take credit for all of this and probably make people believe it. It may be reduce regulations a little bit across the board and just call it a day. In fact, he did a lot of that the first time around, four years ago when he came into office, eight years ago when he came into office and people believed it. So really the question is how much he wants to just claim that everything is better because he's in place. How much does he really want to change?

[Kyle Ryssdal]

Speaking of claiming things, he says we're going to drill, baby, drill. Even though the United States produces more oil and gas now than any other country on the planet, he said he's going to set up a Department of External Revenue to collect tariff income even though, as we all know, American consumption consumers pay those tariffs. So there was, there was some disinformation in there there's, there's a lot that.

[Sudeep Reddy]

The President is going to say, and as usual, we have to watch what he does, what he does on tariffs. He came right out this morning, his team did, and said, well, maybe we're not going to do these on day one. We'll see if he does them on day two when he's got access to his social media accounts and what, what that means. But enacting tariffs across the board, as he has said many times he would do in right when he takes office, will potentially raise inflation. It will cause, cause currency ripples around the world and that could blow back on us. If he wants to cut off workers coming in from, from other countries, then there's a possible shortage of workers and that could raise inflation at the low end. There are a lot of things that could happen if he actually carries through on his promises, and we don't know yet because we have not tried a lot of these things in quite a while.

[Kyle Ryssdal]

Yeah. So put on your Jay Powell hat for me here for a second and talk to me about what the central bank does when a new administration's policies are inherently inflationary, whether it's limiting the labor supply or increasing the cost of goods. Jay Powell's looking at this going, man, I just got done with inflation and now you're doing this.

[Sudeep Reddy]

Every time we see one of these actions, it will raise the expectation that interest rates will have to stay higher to deal with a potential resurgence of inflation or the fact that inflation is not dropping quickly enough. And that will start a war as it had before, a rhetorical war between the President and the Fed chair. And that could upset bond markets as well. There are a lot of different factors that go into what, what drives borrowing costs. And this is one of them. And it's, We've seen this before.

[Kyle Ryssdal]

Real quick. I had this conversation with Katherine on Friday, but I'd love your take. It seems to me that, you know, just a couple of presidents ago, they had a little leeway in, in, in how, how long they had to be in office before they were like, responsible for the economy. You know, it was like three months, six months. You know, presidents get too much credit, too much blame. Seems to me that Trump is on the hook for this economy.

[Sudeep Reddy]

Like now he can decide to take it slow and, and gradually implement some of these policies, but if he wants to come in right now and do day one actions, then it becomes his because you can actually put a marker on where we have the data still, at least for now, to, to mark what the changes look like. And it will be very apparent if he does a lot of these things rapidly and and disrupts the general flow of the economy and of business. But he could also do things that he could take it slow and do things gradually like that. Some businesses want to see and maybe avoid some of the upset. So it's a choice and we're going to find out, I think within days or weeks what that choice is.

[Kyle Ryssdal]

Sudeep Reddy at Politico on this Inauguration Day 2025. Sudeep, thanks a lot. Appreciate it.

[Sudeep Reddy]

Thank you Kai.

[Kyle Ryssdal]

Talk to you soon. Wall street was off today for the Martin Luther King holiday. We will think of something to say though when we do the numbers. As I said, Both U.S. equity and bond traders had the day off today. But as of quitting time last Friday, the market for American government debt, I.e. treasury bills, bonds and notes, stood at roughly $28 trillion. As we've been telling you, bond yields have been rising for months now. In September, the Yield on the 10 year treasury note was 3.6% now, 4.63%. And those rising yields aren't just happening here. Germany, the UK and Japan too have on the whole seen bond yields going up. You know, the reason we talk about the bond market as much as we do is that it can offer hints of our economic future. So what do you suppose it means that yields are rising in so many places all at once? Marketplace Sabri Benishore is on it.

[Sabri Benishore]

Whether they're treasuries in the US or gilts in the UK or bundes in Germany, bonds are literally loans to a government. Loans for a long time, loans for a short time.

[Sonal Desai]

You can buy 2 years, 5 years, 10 years, 20 years, 30 year bonds.

[Sabri Benishore]

Sonal Desai is chief investment officer at Franklin Templeton Fixed Income. You can even lend the government money for a very short time.

[Sonal Desai]

Three month T bill, six month T bills.

[Sabri Benishore]

The government of course pays you interest. So there's a payoff for owning one of these things. That's the yield. And over the past few months, the bond market, that is all the people and firms buying bonds out there, they have been walking away from longer term bonds because they've decided the yields were too low.

[Sonal Desai]

It's been a pretty significant move to higher yields.

[Sabri Benishore]

Gargipal Chowdhury is chief investment and portfolio strategist for the Americas at BlackRock. Investors have been demanding higher yields on a 10 year bond now because their vision of the economy for the next 10 years has changed.

[Sonal Desai]

So if you think back to the beginning of this year, all of the data, the totality of the data, whether it be on the labor market, the sentiment surveys, all of them have been pointing to a stronger U.S. economy.

[Sabri Benishore]

A stronger U.S. economy still grappling with inflation.

[Gargipal Chowdhury]

Inflation is going to be higher than people had thought.

[Sabri Benishore]

Gershon Distenfeld is director of income Strategies at Alliance Bernstein. A future strong economy with stubborn inflation residue means higher interest rates, higher returns on something like a three month treasury down the road. But bond investors today are going to miss out on that rosy future if their money is locked up in a decade long loan to the government that isn't offering enough interest. That is one reason why the bond market has been insisting that long term yields go up. But all of this, this is the US and longer term bond yields have been going up all over the world.

[Kyle Ryssdal]

Again.

[Sabri Benishore]

Gargipal Choudhary at blackrock There is not.

[Sonal Desai]

Just a US story in higher rates, but this is Australia story and Italy story of France. The uk, Canada have seen higher rate.

[Sabri Benishore]

Some of it is coincidence, she says, but some of it is not. Says Franklin Templeton Sonal Desai, when US.

[Sonal Desai]

Rates go up, it tends to attract capital from the rest of the world. So you might see people exiting German bonds to put money into US Treasuries.

[Sabri Benishore]

When people do that, the German bonds in a sense have to compete and their yields go up too. So that's part of what's going on. But another part of the global rise in bond yields is anxiety.

[Kyle Ryssdal]

It's also the uncertainty that the world's largest economy could change its trade policies rather radically in the spring.

[Sabri Benishore]

David Kraus is professor emeritus of Finance at Marquette University.

[Kyle Ryssdal]

If some of the threats of tariffs and major changes in trade policies come to fruition, some of the countries that are very reliant on trading with the US have increased risk.

[Sabri Benishore]

If foreign bonds now look more risky, those yields go up. Kind of like how a bad credit score makes a mortgage more expensive. But as bond yields around the world have risen, Kraus says there is a bigger picture here.

[Kyle Ryssdal]

The era of cheap money is coming to an end.

[Sabri Benishore]

Bond yields filter out far into an economy. Higher yields make borrowing more expensive, not just for governments, but for companies, people buying homes. For many years we got used to low interest rates and Kraus says those days are gone. In New York, I'm Sabri Benishore for Marketplace.

[Kyle Ryssdal]

The weather forecast here in LA is most definitely not what we want to hear. More wind, lots of it, it looks like, which the National Weather Service is calling a particularly dangerous situation. With gusts approaching 100 miles an hour up in the mountains and the foothills. The count to date for the Palisades and Eaton fires is more than 15,000 structures destroyed, a sizable chunk of which were people's homes, which is in turn having a ripple effect on the Los Angeles housing market and beyond. Here's Marketplace's Matt Levin.

[Gargipal Chowdhury]

Los Angeles Realtor Lexi Newman used to help a lot of home buyers find their foot in the LA housing market in Altadena in East LA County. According to Zillow, the medium home value there was over a million dollars, which by LA standards it was, you know.

[Kai Ryssdal]

On the more affordable side of things here and also very lovely. And there was a burgeoning kind of scene of, you know, fantastic restaurants and coffee shops and all kinds of things.

[Gargipal Chowdhury]

Altadena was ravaged by the Eaton fire. Newman has five clients who lost their homes there while it's still early. Her gut says the sudden disappearance of semi affordable supply won't help buyers in nearby markets like Pasadena or Alhambra.

[Kai Ryssdal]

We already had an inventory problem and an inventory shortage, so supply and demand is very possibly going to shift and have housing become more expensive than it already is.

[Gargipal Chowdhury]

About 62 miles southeast of Altadena is Moreno Valley, an LA exurb far enough away from the fires to avoid any real damage. But local realtor comma Burton expects to see some pretty immediate economic fallout.

[David Kraus]

My biggest concern is the insurance because I believe that's where the ripple effect will come.

[Gargipal Chowdhury]

Burton says homeowners insurance has become so expensive, it's already a focal point of buyer seller negotiations, just like closing costs. Sadly, we do have some precedent here for how we can expect the LA fires to impact other housing markets over time. After the 2017 wine country fires in the Bay Area, Sacramento Realtor Aaron Stumpf started getting calls from fire victims looking for more affordable options a good 100 miles away from where they used to live.

[Kyle Ryssdal]

Most of the people that I talked.

[Kai Ryssdal]

To wanted to be in suburbia where.

[David Kraus]

There was low fire risk.

[Kai Ryssdal]

Definitely far away from any high or moderate fire hazard areas.

[Gargipal Chowdhury]

Those low risk areas are increasingly tough to find now. I'm Matt Levin for Marketplace.

[Kyle Ryssdal]

Coming up, 2025 is probably going to.

[Kellen James]

Be one of the craziest times for sneakers.

[Kyle Ryssdal]

So sneakers too, I guess. First though, let's do the numbers. US Markets, as I said, were closed today in observance of the Martin Luther King Jr. Day holiday. President Trump, he said this morning, is going to declare a national energy emergency, giving him authority to increase US Energy production and potentially drill, baby, drill. As he said that despite the fact that the United States produces more oil and gas now than any country on the planet. Planet Brent crude down 1% today. 79. 94 barrel gold fell 6/10 of 1%. Over in Europe. Britain's Footsie stepped up 2/10 of 1%. The CAC Garant CAC 40 in Paris up 3. 10%. Germany's DAX advanced about 4/10 of 1%. The dollar fell today Euro was $1.04 per the UK pound is worth about $1.23. You're listening to Marketplace.

[Ryan Reynolds]

Ryan Reynolds here from Mint Mobile with a message for everyone paying Big Wireless way too much. Please, for the love of everything good in this world, stop with Mint. You can get premium wireless for just $15 a month. Of course, if you enjoy overpaying. No judgments. But that's weird. Okay, one judgment anyway. Give it a [e-mail] Switch upfront payment.

[Kai Ryssdal]

Of $45 for 3 month plan equivalent to $15 per month required intro rate first 3 months only, then full price plan options available, taxes and fees extra. See full [e-mail] hi, I'm Kai Ryssdal.

[Kyle Ryssdal]

The host of How We Survive. This season is all about the institution that shaped me, the US Military and how it could shape the future of climate tech. You've probably heard that 2024 was the hottest year on record, that wildfires devastated Los Angeles and that the US Withdrew from the Paris agreement again. And while all that might feel pretty terrible, the climate crisis is not an inevitable reality. From simulated climate emergencies to microgrids and sustainable aviation fuel, we look at how the military is investing part of its $850 billion budget in a greener, more resilient future. Listen to How We Survive wherever you get your podcasts. This is Marketplace. I'm Kai Ryssdal. This is a light ish week for economic data. Just a couple of B list releases coming out the next couple of days. First time claims for unemployment benefits. Also on housing and consumers. But there is something else to be said about the data. A trend that we've noticed over the past couple of months that a lot of big economic reports, a listers if you will, have been affected not by the fundamentals of what's going on in this economy, but by noise. Whether it's big weather events like storms and hurricanes or labor strikes or optimism about the new administration's policies or concerns about said policies, Marketplace's Justin Ho looked into how all that's been affecting how we measure this economy and how economists have been wading through the muck.

[Justin Ho]

The thing about noise, whether it's literal noise or the figurative kind, is that it can be distracting. Like if construction or home sales surge in the months after a natural disaster.

[Sonal Desai]

You would never take that as a trend because you can't judge the economy just from that one rebound.

[Justin Ho]

That's Jennifer Lee, senior economist with BMO Capital Markets. She says a really noisy factor lately has been the prospect of new tariffs, because while some businesses have been loading up on inventory, for example, it could.

[Sonal Desai]

Be reflecting businesses expectations of tariffs. It may not be a reflection of consumer demand.

[Justin Ho]

Another factor muddying the economic picture recently is survey data of consumers, manufacturers and small businesses. Tim Dewey, chief US Economist at SGH Macro Advisors, says people's answers are heavily influenced by their political preferences.

[Sudeep Reddy]

The Democratic respondents see a larger increase of inflation going forward, and the Republican.

[Kyle Ryssdal]

Respondents see inflation just disappearing.

[Justin Ho]

Dewey says that's not useful information because people's opinions don't tend to reflect what they actually do.

[Sudeep Reddy]

You know, people might be saying that.

[Kyle Ryssdal]

They think that confidence is down, but.

[Sudeep Reddy]

If it doesn't change their spending behavior, then their feelings are really not that important.

[Justin Ho]

Economists can always ignore certain sets of data or average it out over several months. George Perks, macro strategist at Bespoke Investment Group, says after the recent hurricanes in the south, he looked at how unemployment claims and home construction in affected states deviated from similar states.

[Sudeep Reddy]

So then we can sort of take into account how big this shock looks like it was and whether that will have a major impact on national economic growth.

[Justin Ho]

And so far, Perk says none of the economic shocks over the last few months has even dented the economy.

[Sudeep Reddy]

For now.

[Kyle Ryssdal]

What's much more important is a pretty solid labor market, pretty solid wage growth.

[Sudeep Reddy]

Strong household balance sheets, moderating inflation.

[Justin Ho]

As long as those factors hold steady, Perk says the economy should be fine. I'm Justin Ho for Marketplace.

[Kyle Ryssdal]

Here's some data that maybe isn't so murky. 2024 was a tough year for a lot of retailers. Between January and November, about 50 of them filed for bankruptcy protection, in the process closing more than 7,000 stores. By way of context, that's a nearly 70% increase from the same period a year earlier. The data courtesy of coresight Research. There you might have heard the phrase, in fact, retail apocalypse thrown about a little bit. Thing is, consumer spending has been pretty strong, as we've talked about, and we have just been through the biggest holiday sales season yet. So Marketplace's Kristen Schwab set about trying to square that circle.

[David Kraus]

The TJ Maxx in lower Manhattan is buzzing during lunch hour. Callie Connolly is on her break, combing through racks of clothes.

[Kai Ryssdal]

I guess I'm a shopaholic, so I met TJ Maxx just looking around, not for anything in particular.

[David Kraus]

Are you a Maxinista, though?

[Kai Ryssdal]

I mean, yes, but I'm not here like every day. But I do really like it here.

[David Kraus]

Maxinista is what TJ Maxx calls its dedicated customers. Connelly comes in a couple times a month and says it's one of the few places she still shops in person. On a wall nearby, a sign reads, new styles arrive weekly. Shouldn't you?

[Kai Ryssdal]

There's just always something special and new. I feel like they always have new stuff here.

[David Kraus]

TJ Maxx is one of those wacky places where you can buy a designer bag, pasta sauce and a set of silver and gold water bottles in the shape of a croissant. The good deals and constant rotation of new stuff are reasons why discount retailers are doing well right now. TJ Maxx's sales have grown and its stock price has about doubled over the last half decade. But the mood of the industry at large is moody. Nicole D. Horatius is a professor of practice at Columbia Business School.

[Kyle Ryssdal]

I wouldn't say apocalypse, but I would say a readjustment.

[David Kraus]

Readjustment is part of the natural churn of business. But the big challenge for retailers right now is they kind of have to be everywhere online, in person and everything in between. They need to offer curbside pickup and easy returns. It's hard to do all of that well.

[Kyle Ryssdal]

I was trying to think of the.

[Sonal Desai]

Last time I was delighted in a.

[Kyle Ryssdal]

Retail shopping experience, and I have to say it's been quite a while.

[David Kraus]

You go to a store and the counter is cluttered with returned clothes. You go online to see if the pizza stone you've been eyeing is in stock at your nearest store, only to arrive and find an empty shelf. The integration of online and in person shopping takes resources away from doing any one thing well.

[Kyle Ryssdal]

I think it's totally possible to do all things right, but the question is, is, is it going to just be.

[Sonal Desai]

The companies that have the funding cash?

[David Kraus]

That's why just a few companies have become people's go to for everything from food to footwear, says Aaron Charis, who leads the e commerce division at Bain.

[Kyle Ryssdal]

& Co. To the victor goes the spoils, right? Like if you sort of looked at.

[Gargipal Chowdhury]

Retail over the last decade, right?

[Sabri Benishore]

More than half of the growth in.

[Gargipal Chowdhury]

US Retail has come from Walmart, Amazon and Costco.

[David Kraus]

Increasingly, in retail it takes money to make money. So to compete, retailers have to be the best.

[Gargipal Chowdhury]

The problem is that if you are not what I would call the EST.

[David Kraus]

On something, the EST being the cheapest, fastest, or highest quality, then it's really hard to win. If a smaller company wants to win, it has to focus. Which brings us back to TJ Maxx, one of the few retailers that gets away with not doing it all online and in person and instead leans into offering products that are affordable and special. Callie Connolly, the lunch hour shopper, brags about the best deal she's ever snagged at the store.

[Kai Ryssdal]

I found a, like, light green. I would almost call it pistachio house of Harlow blazer. And originally, I think it's like 180. I got it for $50. Favorite thing I've ever owned. For sure. Love it.

[David Kraus]

It's that thrill that keeps her coming back. In New York, I'm Kristen Schwab for Marketplace.

[Kyle Ryssdal]

Kristin was talking about some of the giants in the retail space, right. But you got retail macro, and then you got retail micro. Kellen James is the owner of Silhouette Sneakers and Art in the historic Greenwood district of Tulsa, Oklahoma. He bought it almost a year ago, so we gave him a call to hear how things are going right now.

[Kellen James]

You definitely feel like there's this. This. This calm, like, slow time right now. I don't want to go crazy with getting inventory, but I also am excited. I mean, really, honestly, 2025 is probably going to be one of the craziest times for sneakers. I mean, and as many releases that's gonna. That's gonna happen this year, I'm excited about that. And that's really what. What's happening right now is me planning out the stuff that I really want to make sure I get a hold of and just trying to get new inventory that I know people are gonna want. It's gonna be a continuous thing throughout this whole time is just to be able to continue to get the word out about Silhouette. I told somebody about a week ago that, like, I want it to be where, like, even if you're not someone that's into sneakers, that you at least know where Silhouette is, what Silhouette is all about. Locally especially. I really am starting to understand that the obligation of being in a brick and mortar and having a business is more about being a part of the community, find ways, Finding ways to be a part of the community. Community. We're doing some events. We're doing different kind of events. We've already done one. We started this year. We did a a bingo night once, you know, as a great that's a great example of like that essentially doesn't have anything to do with sneakers or, you know, apparel or anything like that, but it's just a way to be a part of the community and bring people together to have a good time. We're doing more events like that, pop up shops to kind of highlight people, local people that are doing fun stuff. And so we want to keep doing stuff like that. And I'm hoping to get good reactions from community. You, you have to find different ways to connect with people. That really is like my main thing that has stuck out to me the most is just like stuff in our store can be expensive, you know what I mean? And so I've always had it in my mind that just like I want to try to find ways to connect with people, it is more than just about what's on the walls and on the racks.

[Kyle Ryssdal]

Kellen James Silhouette Sneakers and Art Tulsa, Oklahoma this final note on the way out we close on trade policy of which we will surely be hearing plenty in the 140661 days to come from Edinburgh, Scotland today. This item saw this in the Guardian that McSween of Edinburgh, which is Scotland's biggest haggis maker, is going to make a U.S. compliant version of the delicacy, having been shut out of the US market since 1971, it seems traditional haggis, I would not know, by the way, is made with sheep's lung, the use of which is prohibited as a human food. So they're going to make it with sheep hunt heart, which is better? Our daily production team includes Andy Corbin, Nicholas Guillong, Maria Hollenhorst, Hiru Ek Bonobi, Sarah Leeson, Sean McHenry and Sophia Terenzio. If you're Scottish, please don't me, I'm Kai Rysdal. We will see you tomorrow. Everybody. This is apm. This economy can be complicated. That's why the Marketplace newsletter makes understanding it all simple. Get Smart takes on the week's biggest stories delivered to your inbox every Friday. No jargon, no hype, just economics you can use. Sign up [e-mail] subscribe.