WEBVTT - Examining The Supply Chain, Labor, And Alternative Energy 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day, we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.560 --> 0:00:15.560 with essential market moving news. Find the Bloomberg Markets podcast 0:00:15.560 --> 0:00:18.479 called Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.439 at Bloomberg dot com slash podcast. We had some good 0:00:22.520 --> 0:00:27.479 numbers out of Home Depot, UH and Walmart. Apparently there's 0:00:27.560 --> 0:00:29.520 stuff on the shelves to buy. But I know a 0:00:29.520 --> 0:00:31.440 lot of people are concerned about the supply chain as 0:00:31.480 --> 0:00:34.519 we head into this all important holiday season. Let's get 0:00:34.560 --> 0:00:37.160 a sense of kind of where we are there. Lisa Chai, 0:00:37.240 --> 0:00:40.279 senior analysts at Robo Global. Uh, Lisa, thanks so much 0:00:40.320 --> 0:00:41.680 for joining us here a gave we have some good 0:00:41.760 --> 0:00:45.040 numbers out of Home Depot and Walmart this morning. UM, 0:00:45.120 --> 0:00:48.480 but a lot of people continue to be very concerned 0:00:48.600 --> 0:00:52.000 about the supply chain challenges out there on a global scale. 0:00:52.720 --> 0:00:54.480 What's your take on kind of where we are with 0:00:54.560 --> 0:01:00.440 that issue. Yes, definitely, UM, supply chain disruptions that we're 0:01:00.440 --> 0:01:04.320 hearing about, it's really nothing new, and unfortunately things may 0:01:04.400 --> 0:01:08.800 worsen before they really improve UM as consumer demand overall 0:01:09.280 --> 0:01:13.840 really seems really unstoppable heading into the holiday season, and 0:01:14.040 --> 0:01:17.560 obviously the pandemic highlighted that we have major bottlenecks within 0:01:17.600 --> 0:01:21.200 the supply chain. And keep in mind that we have 0:01:21.360 --> 0:01:25.200 really bigger problems than just overall the holiday season. We 0:01:25.319 --> 0:01:29.640 have obviously great innovations and technologies that can keep up 0:01:29.680 --> 0:01:32.000 with all this change and help with some major issues, 0:01:32.080 --> 0:01:36.000 but improving the supply chain is a really complicated one. 0:01:36.640 --> 0:01:41.960 You have to consider, uh, explore import supply chain network 0:01:42.040 --> 0:01:46.720 within the manufacturing process, to online and instore merchandise management, 0:01:47.160 --> 0:01:50.400 and also the logistics and then transportation issue throughout this 0:01:50.600 --> 0:01:56.640 entire process. So and you also have to consider reverse logistics. Yeah, 0:01:56.680 --> 0:01:58.640 there's a lot. There's a lot to deal with. How 0:01:58.640 --> 0:02:02.760 long until we've out with it? Right? I mean it 0:02:03.440 --> 0:02:05.720 seems like if you want to return an item, your 0:02:05.880 --> 0:02:08.760 retailers is just struggling with that. The shipping cost is high. 0:02:09.000 --> 0:02:12.960 I think Home Depot Walmart had great results because they 0:02:13.200 --> 0:02:17.280 prepared UM probably most of this year. They learned a 0:02:17.280 --> 0:02:21.440 lot from the last twelve eighteen months, and they came 0:02:21.480 --> 0:02:27.080 into UM this important holiday season with enough people that 0:02:27.120 --> 0:02:30.519 they hired UM laborers and as well as merchandise, they're 0:02:30.560 --> 0:02:33.440 fully stopped. That's which the moret Walmart CEO the set 0:02:33.520 --> 0:02:37.840 right for the most retailers are still struggling. We're obviously 0:02:37.880 --> 0:02:42.240 not having enough merchandisees that consumers want, and then shipping 0:02:42.280 --> 0:02:44.960 costs and transportation cost is really eating up the margin. 0:02:46.040 --> 0:02:49.800 Do you think that the supply chain processes it's not broken, 0:02:50.520 --> 0:02:54.480 but it's definitely a bigger problem than just the holiday season. 0:02:55.120 --> 0:02:57.040 So how about the the other issue that we're hearing 0:02:57.040 --> 0:02:59.160 a lot about, Lisa, not just from the retailers, but 0:02:59.200 --> 0:03:02.280 just you know, uh, corporate America in general, which is 0:03:02.320 --> 0:03:06.400 kind of the labor shortage. I mean, you know, to 0:03:06.440 --> 0:03:09.720 what extent is that going to be a continuing issue 0:03:09.840 --> 0:03:12.600 for you know, some of the retailers in general, but 0:03:12.639 --> 0:03:14.519 just kind of corporate America. I mean it, this seems 0:03:14.560 --> 0:03:17.800 to be, uh, you know, one of the really fascinating 0:03:18.240 --> 0:03:22.000 outcomes of this pandemic. And I noticed it everywhere, by 0:03:22.040 --> 0:03:25.920 the way. So I was in a um Dick Sporting 0:03:25.919 --> 0:03:28.519 Goods the other day and there were lines all the 0:03:28.560 --> 0:03:30.400 way down the aisle because they only had a few 0:03:30.400 --> 0:03:33.000 people to check out. Then I went into a yardhouse 0:03:33.360 --> 0:03:37.280 which was delicious, um, but the weight was very long 0:03:37.400 --> 0:03:39.600 and there were a lot of empty tables. I asked 0:03:39.640 --> 0:03:41.640 the manager why and he said, I don't have enough 0:03:41.680 --> 0:03:44.440 staff to bust these tables. And that's just keeping that's 0:03:44.480 --> 0:03:47.360 keeping revenue down, that's hurting their business. Is that a 0:03:47.400 --> 0:03:51.000 long term issue. It's definitely a long term issue, and 0:03:51.080 --> 0:03:54.640 it's it's hitting I think it's it's near term term, 0:03:54.640 --> 0:03:57.840 long term issues. And I think that assis from the 0:03:57.880 --> 0:04:03.240 fact that these job sure are really brutal right, it 0:04:03.240 --> 0:04:07.320 can be very dirty, it's very manual labor process working 0:04:07.360 --> 0:04:11.440 in some of the warehouses or being a truck driver today, um, 0:04:11.600 --> 0:04:14.800 and also working in restaurants. I think it's it's definitely 0:04:14.800 --> 0:04:18.320 the wage problems. So the wage growth is going up obviously, 0:04:18.560 --> 0:04:22.080 and each other is trying to manage and navigate through this, 0:04:22.680 --> 0:04:25.120 and we are it's going to hit the consumer so 0:04:25.160 --> 0:04:28.039 obviously because we have to pass on some of the cost. 0:04:28.800 --> 0:04:31.080 So this is a big issue with some of the 0:04:31.120 --> 0:04:35.039 workers not wanting to do this. Turnover at places like 0:04:35.080 --> 0:04:38.960 Amazon is super high. So we think that there are 0:04:39.000 --> 0:04:42.200 some solutions to this, right because we have some machine 0:04:42.279 --> 0:04:46.120 vision technologies and autonomous worklist and robotic arms for packing 0:04:46.120 --> 0:04:50.000 and unpacking. So they are solutions the technology could help. 0:04:50.600 --> 0:04:54.120 UM it's a matter of retailers really embracing it and 0:04:54.320 --> 0:04:57.600 using outsourcers and service providers that could really help them. 0:04:58.080 --> 0:05:01.120 UM still the needs that they really need, whether it's 0:05:01.160 --> 0:05:05.479 near term or longer term, which which retailers, Lisa, which 0:05:05.520 --> 0:05:08.479 retailers are doing the best, and which ones are doing 0:05:08.520 --> 0:05:11.039 the worst. I don't need you to give me brands 0:05:11.120 --> 0:05:13.080 unless you want, but I'm just wondering, you know, in 0:05:13.160 --> 0:05:19.640 terms of UM UH classifications, Yeah, I think I think 0:05:19.960 --> 0:05:23.279 uh Waist there is one of the companies that have 0:05:23.880 --> 0:05:26.800 probably one of the better supply chain, eat Commerce, which 0:05:26.800 --> 0:05:29.560 is like an online home goods or a catalog home 0:05:29.600 --> 0:05:35.400 goods business, and they're expanding um IKEA. Obviously, companies like 0:05:35.480 --> 0:05:39.680 Amazon has really embraced technology. Walmart is really getting there 0:05:39.720 --> 0:05:42.520 as well. UM I would say every retailer at this 0:05:42.640 --> 0:05:47.000 point has to increase their capex and spending around warehouse 0:05:47.040 --> 0:05:50.800 automation and improving their supply chain. They have to. There's 0:05:50.839 --> 0:05:55.080 no choice, right because their margins are are declining. You 0:05:55.160 --> 0:06:01.000 have major UH secular headwinds coming at them, whether it's UH, 0:06:01.240 --> 0:06:04.760 the labor shortage or the wage growth or supply chain 0:06:05.400 --> 0:06:09.280 should then cost. So it's we need a real major 0:06:09.400 --> 0:06:12.479 probably up told the entire supply chain process, but we 0:06:12.520 --> 0:06:15.719 have to start somewhere. UM So we do think that 0:06:16.080 --> 0:06:20.839 very bullish on robody companies and automation companies, and also 0:06:20.880 --> 0:06:25.279 if you could implement it with AI capabilities, we think 0:06:25.560 --> 0:06:28.000 we think some of the technology solutions could really help 0:06:28.080 --> 0:06:30.840 the process. Lisa, thank you so much for joining us. 0:06:31.000 --> 0:06:34.040 Really appreciate getting your thoughts in perspective here. Lisa Chai, 0:06:34.360 --> 0:06:37.520 she's a senior analyst at robo Global, getting some thoughts 0:06:37.640 --> 0:06:40.960 on supply chain and retails. We get some of these 0:06:41.080 --> 0:06:48.320 pretty good retail numbers, you know, one of them, I 0:06:48.320 --> 0:06:51.640 think more interesting economic fallouts from this pandemic has been 0:06:52.520 --> 0:06:54.880 the Great resignation, as some people are talking about it. 0:06:54.920 --> 0:06:57.320 A lot of folks kind of left. They kind of 0:06:57.839 --> 0:07:02.320 they left the workforce. They haven't come back. Where did 0:07:02.320 --> 0:07:04.560 they go? I don't know. They're not on the trains 0:07:04.560 --> 0:07:06.159 with me in the morning. They're not on the subways 0:07:06.160 --> 0:07:08.160 with him in the morning. But we'll have to see 0:07:08.160 --> 0:07:10.480 Tom Gimbell, he's a founder and CEO of Lasal Network. 0:07:10.520 --> 0:07:13.520 They do this kind of job stuff. Tom again, I 0:07:13.520 --> 0:07:15.560 don't know if it's four million, five million, six main 0:07:15.600 --> 0:07:18.559 folks that are not on the payrolls today that were 0:07:19.240 --> 0:07:24.160 pre print pandemic. Where are they? It's a great question. 0:07:24.360 --> 0:07:25.960 I'm number one. I'm glad to hear your taking the 0:07:26.000 --> 0:07:31.480 train again. So that's uh number one. I would say 0:07:31.680 --> 0:07:33.640 that Goldman Sachs just I don't know if you read 0:07:33.680 --> 0:07:35.760 the article. They just released a study that showed the 0:07:35.760 --> 0:07:37.680 two and a half million people that have left the 0:07:37.680 --> 0:07:42.080 workforce were baby boomers that either retired or took early 0:07:42.120 --> 0:07:46.240 retirement during the pandemic and for a variety of reasons. 0:07:46.280 --> 0:07:49.080 And those people, they conclude are not coming back. So 0:07:49.080 --> 0:07:51.960 when you're looking at it, almost of the people that 0:07:52.120 --> 0:07:56.480 have retired that that is one example one excuse for 0:07:56.520 --> 0:07:59.840 where they've gone. Secondarily, you look at it and you 0:08:00.120 --> 0:08:04.960 got COVID over still looming over the economy, meaning if 0:08:05.080 --> 0:08:08.280 kids get sick from in school or there's an outbreak 0:08:08.360 --> 0:08:10.080 that a parent needs to be home with them, and 0:08:10.080 --> 0:08:12.200 so you've still got parents that haven't re entered the 0:08:12.200 --> 0:08:15.160 workforce as a result of of making sure that their 0:08:15.200 --> 0:08:17.840 home for their kids and and doing those things. And 0:08:17.880 --> 0:08:23.440 then lastly, because of the hangover from COVID even as 0:08:23.440 --> 0:08:27.560 it as it uh dissipates that restaurants and the service 0:08:27.640 --> 0:08:31.440 jobs still haven't come back. And if you combine those 0:08:31.480 --> 0:08:34.600 three things, I think that's a fairly good example of 0:08:34.600 --> 0:08:38.320 where the people have gone. It's so interesting, Um, First 0:08:38.320 --> 0:08:40.360 of all, I want to say, hangovers when you're older, 0:08:40.400 --> 0:08:45.320 they take a lot longer to recover from. I wouldn't. Um, 0:08:45.320 --> 0:08:50.119 it's so interesting that, uh, this labor shortage is hitting um, 0:08:50.160 --> 0:08:54.160 you know, retail numbers as well and hitting the bottom 0:08:54.160 --> 0:08:58.440 line of companies. How hard is it to get employees 0:08:58.640 --> 0:09:01.000 in now? What What do I'm lawyers have to do? 0:09:01.080 --> 0:09:04.560 It's it's more than just raised wages, isn't it. Yeah, 0:09:04.559 --> 0:09:08.000 the wages are are really only an aspect what the rate. 0:09:08.240 --> 0:09:13.080 When companies are raising wages now it's really to fight 0:09:13.160 --> 0:09:16.760 off defection of people leaving their companies and going for 0:09:16.880 --> 0:09:20.240 more money. Where raises used to be given as a reward, 0:09:20.320 --> 0:09:23.040 as an a merit increase of saying job well done, 0:09:23.480 --> 0:09:25.200 we want to keep you happy, and we're gonna give 0:09:25.240 --> 0:09:28.680 you more. Now it's the numbers are so staggering from 0:09:28.760 --> 0:09:31.760 competitors and other companies that you've got to do it 0:09:31.800 --> 0:09:36.200 in advanced to keep people, and I haven't seen numbers 0:09:36.240 --> 0:09:39.640 like that in a long long time, both hourly and 0:09:39.880 --> 0:09:44.000 salary levels of that happening. You know what what companies 0:09:44.040 --> 0:09:48.079 are realizing, though, is it's more than money. And you've 0:09:48.120 --> 0:09:51.200 got two sides of the coin. I think companies are 0:09:51.240 --> 0:09:55.640 afraid that employees only want to work remotely, and thus 0:09:56.080 --> 0:09:58.640 they're letting the inmates run the asylum, so to speak, 0:09:58.679 --> 0:10:01.880 and bending over backwards to make everybody happy working from home, 0:10:02.240 --> 0:10:04.160 whether that may or may not be best for the 0:10:04.200 --> 0:10:07.720 company or quite frankly, for the individual's career path. And 0:10:07.760 --> 0:10:09.960 then the other side of the of the coin is 0:10:10.360 --> 0:10:15.040 that human beings, professional human beings, um they want to 0:10:15.080 --> 0:10:17.720 be challenged and they want to achieve goals. They don't 0:10:17.960 --> 0:10:20.000 majority of who don't just want to do a job 0:10:20.400 --> 0:10:23.960 that Studies show that our our emotional satisfaction is tied 0:10:24.040 --> 0:10:28.839 to recognition and accomplishment. And the more people are are 0:10:28.880 --> 0:10:32.720 working remotely, not in a team environment, not being challenged 0:10:32.760 --> 0:10:35.920 with tasks because companies don't challenging tasks because companies don't 0:10:35.960 --> 0:10:40.120 want to lose people, you're seeing the disintegration of the 0:10:40.679 --> 0:10:42.920 fabric of corporate culture. By the way, Tom, you know 0:10:42.960 --> 0:10:45.760 we talked to you always about these labor issues because 0:10:46.280 --> 0:10:48.560 the company you founded and run is one of the 0:10:49.360 --> 0:10:53.000 leading staffing companies in the country. What does this mean 0:10:53.080 --> 0:10:55.880 for your business? What's what what's it like operating Lessau 0:10:56.040 --> 0:10:58.800 right now? Well, knock on wood, it's been the best 0:10:58.840 --> 0:11:01.240 year of the company's histories. So we've grown for for 0:11:01.360 --> 0:11:03.640 we grew for twenty two years in a row. Last 0:11:03.720 --> 0:11:06.800 year we dipped by eight percent with COVID, and this 0:11:06.880 --> 0:11:12.120 year we're up over over last year at over so 0:11:12.440 --> 0:11:16.160 this has been great for us. However, um, I think 0:11:16.160 --> 0:11:19.920 that with the infrastructure bill coming uh the that that's 0:11:19.960 --> 0:11:22.240 a good sign for the economy. My belief is that 0:11:22.280 --> 0:11:24.080 things are going to continue at this pace for the 0:11:24.080 --> 0:11:27.120 next couple of years. I'm very optimistic about the economy. 0:11:27.559 --> 0:11:32.040 That there are people entering the workforce from college graduates 0:11:32.040 --> 0:11:35.680 and people realizing that the government subsidies aren't coming back. 0:11:36.120 --> 0:11:39.040 And then and then lastly, you're going to see with 0:11:39.440 --> 0:11:42.160 the delta and not erupting into what people were afraid 0:11:42.200 --> 0:11:45.280 it would that with COVID dissipating and life getting back 0:11:45.320 --> 0:11:47.920 to normal, everybody's going to return to the workforce. I 0:11:47.920 --> 0:11:49.679 think it's gonna be really good for the economy for 0:11:49.760 --> 0:11:53.160 the next thirties, sich months. Are people going to come 0:11:53.160 --> 0:11:56.400 back to the office five days a week anymore? Or 0:11:56.440 --> 0:12:01.320 is that really a thing of the past. My belief 0:12:01.400 --> 0:12:04.400 in talking to the CEOs and vps of HR that 0:12:04.440 --> 0:12:07.360 we deal with every day, week, months, so to speak, 0:12:08.040 --> 0:12:13.280 is that I think my belief is that Fridays will 0:12:13.360 --> 0:12:17.679 become remote fridays the way casual Fridays became casual Fridays. 0:12:18.040 --> 0:12:20.760 That there'll always be some industries or companies that will 0:12:20.800 --> 0:12:23.680 be in the office five days a week, but that 0:12:23.880 --> 0:12:28.080 the majority of companies will have remote fridays. And you'll 0:12:28.080 --> 0:12:31.200 see the majority of companies will be in the office 0:12:31.200 --> 0:12:33.400 four days a week, with a good percentage three days 0:12:33.440 --> 0:12:36.000 a week. By the way, Paul, did I tell you 0:12:36.000 --> 0:12:41.520 about flannel Friday? Friday? This Friday and crities in here too. 0:12:41.559 --> 0:12:44.800 I want everyone to wear flannel shirts. It's my last day, 0:12:44.800 --> 0:12:47.079 and then we are assuming we all own a flannel shirt. 0:12:47.280 --> 0:12:52.120 I know you own a flannel shirt. Dude. You gotta 0:12:52.160 --> 0:12:55.800 be kidding. Well, that's not bad. Four days a week 0:12:55.800 --> 0:12:59.319 in the office, tom Um, I'm guessing that's better than 0:12:59.440 --> 0:13:02.200 probably Paul expected when he asked, I mean, I mean 0:13:02.400 --> 0:13:05.600 from the from the from the perspective of old conservative 0:13:05.640 --> 0:13:10.840 guys like Paul Sweeney. Um, he wants kids at their desks, 0:13:11.080 --> 0:13:14.800 you know, grinding it out, or on planes visiting clients. 0:13:15.160 --> 0:13:17.920 So and I know that a lot of people are 0:13:17.920 --> 0:13:20.200 thinking maybe it's gonna only be two or three days 0:13:20.200 --> 0:13:21.959 a week. But so four days a week, I think 0:13:22.000 --> 0:13:25.800 for Paul is that's good enough. Well, all it takes 0:13:25.880 --> 0:13:29.839 is is the market to drop and inflation to go up, 0:13:29.880 --> 0:13:31.560 and people will be bad. You want people five days 0:13:31.559 --> 0:13:33.880 a week. Wait until interest rates or at five six 0:13:33.960 --> 0:13:37.920 seven percent, unemployments back to seven eight and the stock 0:13:38.000 --> 0:13:42.480 markets down by fifteen and then everything reverses and people 0:13:42.559 --> 0:13:45.240 be in the office five days a week. Tom still quickly. 0:13:45.320 --> 0:13:48.079 Immigration legal and illegal, how much is that impacting the 0:13:48.480 --> 0:13:52.280 dearth of workers hugely? I think it's something that's not 0:13:52.360 --> 0:13:54.240 talked about quite a bit. But you've got to think 0:13:54.240 --> 0:13:57.880 back even before the Obama administration or the Trump administration, 0:13:57.920 --> 0:13:59.959 for the last year or two of the Obama administration, 0:14:00.040 --> 0:14:02.920 and immigration was becoming a bigger and bigger deal. And 0:14:02.960 --> 0:14:06.080 when you stop it or stop it's an overstatement but 0:14:06.120 --> 0:14:09.240 when you when you make it such a spotlight on it, 0:14:09.600 --> 0:14:12.600 and it's become a bigger issue, and not allowing people 0:14:12.640 --> 0:14:15.120 into the country from the southern border as aggressively, and 0:14:15.160 --> 0:14:17.320 then the H one B vs a problem and not 0:14:17.440 --> 0:14:20.680 letting people in it becomes a huge issue, both on 0:14:20.760 --> 0:14:23.400 the H one B, on the I T side, and 0:14:24.080 --> 0:14:26.560 on the service sector. Why we don't have enough people 0:14:26.800 --> 0:14:30.040 is directly tied to those problems, right, absolutely, all right, Tom, 0:14:30.040 --> 0:14:32.040 thank you so much for joining us. It was great 0:14:32.200 --> 0:14:35.680 thoughts and perspective on the labor market, Tom Gimbel. He's 0:14:35.680 --> 0:14:37.720 found there in CEO of La Sound Network. Less Sound 0:14:37.760 --> 0:14:40.840 network kind of places people with jobs. So Tom's got 0:14:40.840 --> 0:14:43.280 a great got his pulse finger on the pulse of 0:14:43.440 --> 0:14:47.320 the labor market again, trying to get folks back to work. 0:14:47.400 --> 0:14:53.080 Is it just higher pay? Alright? We had some good 0:14:53.200 --> 0:14:56.000 consumer data points out this morning. Consumer spending for the 0:14:56.040 --> 0:14:58.080 month of October came in better than expected. Then, of 0:14:58.120 --> 0:15:02.080 course the big dogs Home Depot Walmart reporting some really 0:15:02.120 --> 0:15:05.520 strong numbers taking some guidance up. Uh, so the consumers 0:15:05.520 --> 0:15:08.160 seems to be in pretty good spot here. Let's check 0:15:08.200 --> 0:15:11.960 in with Jen Bartasha sees a senior analysts. She covers food, retail, 0:15:12.160 --> 0:15:15.520 mass merchants, packaged food, pretty much everything on the retail 0:15:15.560 --> 0:15:19.760 space for Bloomberg Intelligence. Uh, Jen, give us your takeaway. 0:15:19.760 --> 0:15:22.480 It looks like when I'm looking at the home Depot 0:15:22.480 --> 0:15:26.240 when Walmart numbers pretty good stuff there. Yeah, good morning, Paul. 0:15:26.640 --> 0:15:29.480 It thinks actually, we're a very solid quarter for Walmart. 0:15:29.960 --> 0:15:33.000 Home Depot obviously had had good results as well. Um. 0:15:33.000 --> 0:15:35.320 And it really does underscore the fact that the consumer 0:15:35.480 --> 0:15:38.040 does have money and they are spending. They're just spending 0:15:38.040 --> 0:15:42.080 it selectively. Right now, what are the concerns at a 0:15:42.240 --> 0:15:45.960 for example, a company like Walmart. They beat earnings expectations 0:15:46.120 --> 0:15:50.000 and the shares are down. Yeah, the stock is down today. Um. 0:15:50.040 --> 0:15:52.280 You know, and even though Walmart is very well positioned 0:15:52.320 --> 0:15:55.240 for the holiday. Um. You know, what we're really looking 0:15:55.280 --> 0:15:57.800 about and talking about here in comparison to the other 0:15:57.840 --> 0:16:02.240 retailers is it's a margin store. Um. You know, there's 0:16:02.280 --> 0:16:05.960 been long term concern about Walmart's uh well, it's erosion 0:16:05.960 --> 0:16:08.600 of its margin over time. Um. And some of the 0:16:08.760 --> 0:16:10.720 comments on the call today, you know, and the fact 0:16:10.720 --> 0:16:13.600 that Walmart is the last company out there took to 0:16:13.720 --> 0:16:17.080 raise prices in an inflationary environment kind of inflames some 0:16:17.120 --> 0:16:20.080 concerns about margin overall over the next quarter and into 0:16:20.160 --> 0:16:22.440 next year. Yeah, Jen, that's kind of where I wanted 0:16:22.480 --> 0:16:25.360 to go looking at the margins here. I know, you 0:16:25.360 --> 0:16:28.840 know from reading your research, UM that you know top 0:16:28.880 --> 0:16:31.480 line is important, but you really got to focus, you know, 0:16:31.600 --> 0:16:35.120 at the profit margin. You know, they're facing a lot 0:16:35.160 --> 0:16:38.920 of issues, whether it's supply chain, whether it's higher labor costs. 0:16:39.080 --> 0:16:41.440 What are those two big companies telling us about their 0:16:41.480 --> 0:16:45.360 margins going forward? Well, there's certainly some expectation that a 0:16:45.400 --> 0:16:47.240 lot of these pressures are going to continue through the 0:16:47.280 --> 0:16:51.000 fourth quarter, which is a huge holiday quarter for all 0:16:51.000 --> 0:16:54.000 of retail, and into next year. UM. When you're looking 0:16:54.000 --> 0:16:57.280 at supply chain UM, there there are some structural issues 0:16:57.320 --> 0:16:59.480 that are going to take a little bit longer to overcome, 0:16:59.600 --> 0:17:02.960 So things like transportation costs UM, you know, those are 0:17:03.000 --> 0:17:04.520 things that are going to take time to work out 0:17:04.520 --> 0:17:07.000 of the system. So we're anticipating seeing some of this 0:17:07.119 --> 0:17:11.160 pressure coming from the supply chain lingering well into next 0:17:11.200 --> 0:17:14.080 year UM and affecting these companies, and so it really 0:17:14.160 --> 0:17:16.440 comes down to strategy on how well they can manage 0:17:16.880 --> 0:17:19.879 other costs to help offset that pressure. What's the difference 0:17:19.880 --> 0:17:22.520 in terms of scale looking at a home depot and 0:17:22.560 --> 0:17:25.880 looking at a Walmart. I imagine I think of Walmart 0:17:26.000 --> 0:17:31.399 as this like supply chain Goliath that can just you know, 0:17:31.800 --> 0:17:35.840 wield and tremendous power. And Doug McMillan did say, fighting 0:17:35.840 --> 0:17:38.120 inflation is in our d n A, but can they 0:17:38.160 --> 0:17:42.360 really do something about it? Well, it's it's a good question, Matt. 0:17:42.440 --> 0:17:46.159 And when you when you really look at Walmart scale, UM, 0:17:46.200 --> 0:17:48.800 they have been leveraging that scale to be able to 0:17:48.840 --> 0:17:51.880 increase their inventory, which is up almost twelve going into 0:17:51.920 --> 0:17:55.240 fourth quarter. UM. They're able to force things through the 0:17:55.280 --> 0:17:58.800 system to a degree that some smaller players can't do UM, 0:17:58.800 --> 0:18:00.960 and we expect that that keep it ability will continue. 0:18:01.040 --> 0:18:04.240 But they are also investing and expanding their capacity and 0:18:04.280 --> 0:18:08.600 supply chain UM so that they have more flexibility going forward. 0:18:08.880 --> 0:18:10.440 And that's going to be an important part of their 0:18:10.440 --> 0:18:12.879 story as they try to do more in terms of 0:18:12.960 --> 0:18:16.320 third party fulfillment, sort of like Amazon does with some 0:18:16.400 --> 0:18:19.520 of their marketplace customers. UM. So it's a story that's 0:18:19.520 --> 0:18:22.600 in progress, UM, and we're watching it unfold. Jen. Are 0:18:22.640 --> 0:18:24.840 people going back to the stores or have they just 0:18:25.040 --> 0:18:26.960 you know, since the pandemic said, I can do pretty 0:18:27.040 --> 0:18:29.879 much everything from my couch with a click of the 0:18:30.359 --> 0:18:33.400 mouse or just the app. People are actually going back 0:18:33.440 --> 0:18:35.760 to stores. UM. And if you looked and you broke 0:18:35.800 --> 0:18:38.880 down the same store sales numbers from Walmart today, for example, 0:18:39.040 --> 0:18:42.720 UM traffic into stores is positive. It's up UM over 0:18:43.000 --> 0:18:45.480 almost six percent in the US for Walmart UM in 0:18:45.520 --> 0:18:48.400 the last quarter. And with all of the supply chain 0:18:48.440 --> 0:18:50.479 concerns and the news that you see about you know, 0:18:50.800 --> 0:18:54.680 potential delays for shipping, especially around the holiday period, we're 0:18:54.680 --> 0:18:57.280 expecting that in the fourth quarter that consumers will be 0:18:57.280 --> 0:18:59.959 going into stores a lot to do their holiday shopping, 0:19:00.400 --> 0:19:02.160 just so that they're sure that they have the goods 0:19:02.160 --> 0:19:05.920 that they want to be able to gift. Is Walmart 0:19:05.960 --> 0:19:08.639 getting all the stuff? I mean, are there are they 0:19:08.680 --> 0:19:12.240 having real problems getting certain things in there? Well? I 0:19:12.280 --> 0:19:14.240 think that there are some hiccups a lung the supply 0:19:14.320 --> 0:19:16.879 chain for all retailers, and there are some products that 0:19:16.920 --> 0:19:20.639 are UM inherently a little less stable than others. So 0:19:20.680 --> 0:19:23.639 when you talk about especially on the grocery side, UM, 0:19:23.720 --> 0:19:26.919 things like fresh produce UM, you know, it's harder to 0:19:27.000 --> 0:19:29.480 make sure that everything gets to the stores as fresh 0:19:29.520 --> 0:19:33.040 as possible in this current environment. Um. But what we're 0:19:33.040 --> 0:19:36.320 seeing is that there are generally things in stock. UM, 0:19:36.320 --> 0:19:38.119 it's just a question of how quickly they're going to 0:19:38.160 --> 0:19:41.040 be able to replenish as demands starts to rise. So, Jen, 0:19:41.160 --> 0:19:44.480 we have tomorrow, we have Lows, Target, we have t 0:19:44.680 --> 0:19:48.560 J Max or as it's known in Europe, t K Max. 0:19:48.760 --> 0:19:54.000 Really oddly, UM, we've got raw stores coming up. I mean, 0:19:54.359 --> 0:19:56.480 how does this earning season, how do you think it's 0:19:56.480 --> 0:19:58.800 going to pan out? Given what we've seen today? Well, 0:19:58.840 --> 0:20:01.040 based on what we've seen so far, UM, you know, 0:20:01.119 --> 0:20:03.600 there's reason to be optimistic about how the results are 0:20:03.760 --> 0:20:06.200 going to play out over the next week or so. UM. 0:20:06.240 --> 0:20:09.119 You know, consumers are still very focused on value. And 0:20:09.200 --> 0:20:11.000 you talk about some of the names that you mentioned, 0:20:11.040 --> 0:20:14.480 whether it's t j X, UM, you know Target, UM, 0:20:14.520 --> 0:20:17.560 you know these companies you know play to that value 0:20:17.560 --> 0:20:21.240 segment in different ways, UM, and and people define value differently. 0:20:21.320 --> 0:20:23.640 But but we see that that's resonating. So that should 0:20:23.720 --> 0:20:27.160 vote should vote pretty well for earning. Jen, thanks so much. 0:20:32.000 --> 0:20:33.720 I think we can remember all the way back to 0:20:33.840 --> 0:20:36.800 last week we had in Glasgow, Scotland COP twenty six 0:20:37.240 --> 0:20:40.919 talking about the future of energy. Quite frankly, I'm not 0:20:40.960 --> 0:20:42.800 sure what really came out of that, but I want 0:20:42.800 --> 0:20:44.600 to ask an expert here and we'll do that with 0:20:44.640 --> 0:20:48.200 Seth Great, President and chief executive officer of light Bridge Corporation. Seth, 0:20:48.200 --> 0:20:50.679 thanks so much for joining us here. Again, we've got 0:20:50.680 --> 0:20:53.040 a little bit of benefit of some hindsight here. But 0:20:53.040 --> 0:20:56.840 if we look back to COP twenty six, what are 0:20:56.880 --> 0:20:59.480 the key takeaways that that you made? Was anything of 0:21:00.040 --> 0:21:05.600 substance achieved? You know, there was little of substance achieved 0:21:05.640 --> 0:21:08.920 in terms of a formal agreement which agreed to phase 0:21:09.280 --> 0:21:13.080 down call instead of the original goal of phase out coal. 0:21:13.280 --> 0:21:15.520 That's a new phase by the way, phasing down. I 0:21:15.600 --> 0:21:18.720 used it at dinner last night and everybody, no one 0:21:18.760 --> 0:21:20.679 what I mean, sound like you're at Davos or something, 0:21:20.960 --> 0:21:25.200 And you know, so I think that what came out 0:21:25.200 --> 0:21:28.920 of it though, was a real search for what are 0:21:28.960 --> 0:21:32.480 the alternatives as we do phase down and phase out 0:21:32.560 --> 0:21:36.080 coal and other fossil fuels. What are we going to do? 0:21:36.200 --> 0:21:38.760 And you know we've seen in the news today the 0:21:38.800 --> 0:21:43.000 Germany announced suspension of certifying the nord Stream to pipeline 0:21:43.040 --> 0:21:45.879 to bring in natural gas from Russia. What are they 0:21:45.880 --> 0:21:49.080 going to do? You mentioned before fueling up your four 0:21:49.119 --> 0:21:51.320 D F one fifty. It's almost like buying a new 0:21:51.359 --> 0:21:53.360 car every time you fuel it up now at these 0:21:53.400 --> 0:21:57.560 prices of gasoline, and you know, part of what we 0:21:57.640 --> 0:21:59.560 have to do. And I just got back from an 0:21:59.600 --> 0:22:02.119 Internet sational trip. Were heard a lot about this in 0:22:02.160 --> 0:22:07.800 several countries. Is grow nuclear power. That nuclear power is 0:22:07.840 --> 0:22:12.680 almost immune from these price bikes, from this inflation in 0:22:13.359 --> 0:22:15.840 energy prices. But why why don't we you know? I 0:22:16.400 --> 0:22:20.639 was um really impressed when I watched the Bill Gates 0:22:20.960 --> 0:22:24.360 documentary on Netflix and they're they're one of those it's 0:22:24.359 --> 0:22:26.520 a three part series. I don't know if everyone's seen that. 0:22:26.600 --> 0:22:30.280 One of them is pretty focused on nuclear and um. 0:22:30.720 --> 0:22:34.560