Markets, Hiring, Supply Chain, And The Ski Industry

at Bloomberg dot com slash podcast. I want to get right to our next guest, Danielle di Martino, Booth CEO and chief strategist at Quill Intelligence, former advisor at the Federal Reserve Bank of Dallas, as well as amongst lots of other things she does, and folks, I recommend you follow Danielle on socialists, got a really strong social media game and the people she follows I now follow and vice versas, so help him you get a little bit

smarker on what's going on out there. Danielle, thanks so much for taking the time here on Christmas Eve Eve. What is your outlook for this market going into two We've got Amicron, we've got a rising interest rate environment, a lot of cross currents out there. Can you kind of just give us a sense of what we should

be thinking king about for next year? Well, I think markets uh rightly have moved on from Amy crom at least for the moment, it does not seem to have disrupted UH, whether you're talking about travel or services consumption. We we saw come in very hot this morning. Um, but there is something be said also for all of the goods purchases that have been pulled forward in and the fact that we will not be having any more fiscal impulse going into the first quarters, so that concerns me.

We did see the weakest goods consumption that we've seen in in well over a year. So these things raise red flags when we are a consumption driven economy and you're seeing goods consumption contract and that's at a normal, non a level that's not even adjusted for inflation. Danielle Uh, I want to really stick with that topic of consumption here and and follow up on a story that's about

a year and a half hold. As I'm looking at my byline, I worked with a collaborated with story with Liz McCormick, who quoted you talking about essentially the savings rate, which was likened at one point to what you saw in the Great Depression. This idea that in this kind of pandemic era, a lot of people were holding onto those savings at a rate that you didn't even see

when there was that kind of depression era austerity. I want to ask you about how the savings rate is dropping and what the impact of that on consumption is and then by extension the broader economy that's you know,

that's a fantastic question. We're back down to two thousand seventeen levels on on the savings rate, as we saw in this morning's data, and that is problematic, especially when you layer on top of that the fact that we know due to New York Federal Reserve data, that the bulk of the savings that do survive, that have survived, are in the hands of those between sixty five and and and older, as as well as those who are the wealthiest who have the least propensity to use their savings.

So again, this this fiscal cliff idea is critical as we head into the New York. January fift is going to mark the first month that Americans don't receive five fifty dollars on average in child tax credit in cash, and some of them are going to have to pay some of that back when the I R s opens up the it's it's window to submit tax returns on January thirty one. So a lot of a lot of interesting um events occurring in that first month of this year.

So given that backdrop, Danielle, we've got some pretty clear guidance from this Federal Reserve as to how they're thinking about their tapering and and the rate structure. Do you think the Federal Reserve is getting it right or is that narrative that maybe they're still behind the market is that's still there. But you can't start out from behind

and not still be behind. So I mean, unless they unless they were to come out at the end of June, excuse me, the end of January, their next meeting, which is the last week of January, and say you know what, the tapers over, We're finished with it um. But they

could certainly and we'll listen to sad talk. There was a fantastic are go on the terminal about Christopher Waller, and I recommend everybody read that article because he is a different sounding Federals are governor, and of course governors have permanent votes. We haven't seen a governor dissent since two thousands five, and he seems dead set on that March seventeenth launch date for the first rate hike, So you know, will they get there, will the will the

yield curve win? We'll find out. I mean there are some people who are saying if yield curve is compressing and behaving almost like mid de late cycle, so we will see if the yield curve races to the finish line. And because the Fed cannot increase interest rates if the yield curve is inverted, it's just there's nothing in the rule book that would allow for that. So three rate hikes in two that is the message we have gotten

from the Fed. Something he'd mind is since then, we've had several emerging market countries continue to hike and hike and hike. The Czech Republic I believe is the most recent um And we don't need another reminder on what's

going on with Turkey. Of course, going in the opposite direction, Danielle, I really want to ask you what the bond market is really thinking here, because it kind of seems like when you're looking at pricing, they're pricing in not just steeper hikes, but kind of this kind of knee jerk, stop start reaction. This idea that the FED might actually need to do something and then wait and see and then do it again. What is your thought process on

the bond markets? Take So, I mean the check Republic over night raised interest rates by a hundred basis points. We were expecting seventy five. And we're seeing some very aggressive behavior again to your point outside of Turkey where everything's Craig craig, but we're seeing a very aggressive emerging market. They have to defend their currencies right now. Um, So the question is one of how does the FED react?

And should the FED be reacting or should the Fed be disciplined in its approach maintain that that pace, maintain the stability that markets are expecting. Again, I go back to the yield curve and the fact that other areas of the economy are pulling that long end down. We can't seem to get past that that one point five zero ceiling on the tenure or it feel like an inner and ceiling. So I go back to how aggressive the FED can be given what the bond market is

dictating right now. Hey, Danielle, thank you so much for taking the time today. We always appreciate getting your perspective. Viewer views, particularly here at this time of years, we think about next year. Danielle di Martino Booth. She's a CEO and chief strategist at Quill Intelligence, also a former advisor at the Federal Reserve Bank of Dallas. One of the I guess economic oddities, at least for me, from this pandemic has been what some are calling the Great resignation,

people just leaving the workforce. I don't really have a great answer why, but maybe our next guest will and give us a sense of how things are working out in the labor market. Roll Vr, CEO of pay Corps. Pay Corp is a public company went public this year, trades on the nastac P y c R. It's kind of market cap of five point two billion dollars. RAU, Well, thank you so much for joining us here. UM. Your company creates human capital management software to help recruit an

onboard employees as well as other people management tools. Do you have a sense, given your history with your customers, your clients, where these people went the Great Resignation? Yeah? So I think that there's there's two dynamics, UM that are happening. First and foremost, you know, since the pandemic, UM you know, we're still not back to uh, the overall labor market hasn't go back to where it was pre COVID uh. And so there's two things that are

going on. Um, there's less supply in the market, which makes you know, each individual job UM in more demand. And so people are really re evaluating. People are talking about the Great resignation, but from our perspective, it's a reevaluation where people are thinking about their current job and hey, do I really want that job and is it offering me, you know, the right leadership, the right benefits, the right

pay package. And so we're seeing shortages and some of the industries that we all you know, work with every day, whether it be retail or food and beverage or hospitality. UM, we're seeing significant worker shortages and all of those industries because you know, people are reevaluating their future and they're deciding to do other things. Yeah, well this is going to be a crucial piece of the equation going into two.

We're looking at a queer rate that's just shy three according to latest Jolts data, the highest in history that the data goes back to. I really want to talk about here why we're actually not necessarily seeing this hit some of those retailers to hospitality figures because they are still trying to hire, they are still seeing their shortages. But somehow those businesses are still operating. Can you connect those dots for us? Yeah, I think you know clearly, Um,

the retailers and hostilities are still operating. I think they're operating less effectively than before. I think we're all waiting a little longer in lines, you know at retailers, or um, waiting a little longer to have dinner, um, those type

of things. But UM, what's happened is it's forced retailers and restaurants UM to try new things to attract employees, whether that's flexible work schedules, whether that's you know, on demand pay, the ability to get UM their pay you know, instead of on a weekly basis or by loot basis. Can I get my pay on demand to help pay with my bills and and offering you know, better flexibility and better benefits across the board. So I think you're

seeing the cost to employees increasing for retail and hospitality. Uh. And so that's become you know, the next issue for you know, those industries is the overall costs, which were then seeing pushed back onto the consumer. Paul, I don't know if you've ordered food like take out to your house lately, but I certainly have because I'm a horrible cook. But one of the main issues for me has been

having these very delayed deliveries. And this is such a first world problem, right, I'm gonna complain about it on the air anyway, But a lot of it tends to be because of simply a shortage of food delivery people and drivers, for example. So let me ask you here about just the effect here on the gig economy, on the folks that don't necessarily have a salary job. Yeah. So, I mean I think you're seeing again, um, you see

shortages on on food. I think we've also all seen a change in behavior with Uber and Lift than you know, pre pandemic in the ability to get an on time ride. Uh. And so I think you know, people are definitely moving into gig jobs, and we're still seeing that acceleration. I don't think it's happening at the rate that's required to service the demand shift for either delivery or Uber or lift or the type of services that gig supports. And

so We're seeing the same type of shortages there overall. Um, whether it be you know, the traditional employment economy or the gig economy, we're facing the same labor issues across the board. Roll uh cretty and I we are in the Bloomberg headquarters office today, UM, but we're lonely. Are people gonna come back to the office? So uh, like you know, our perspective is that, UM, we're gonna continue to see a mixed environment. UM, you know for the

foreseeable future. UM, we're probably you know a little overcorrected right now. We're the majority of people are working from home. I think you know, over the next you know, six or twelve months, we'll see more of a mix, some return to work, maybe not five days a week. UM. You know, at pay Corps as an example, you know, we have a virtual first philosophy. UM, and we enable you know, our employees to work from home or flex

into an office in a hotel ing type concept. And I think we're gonna see more of that, you know, for the foreseeable future. UM. I think you know, when we you know, survey our client base, survey our own employees, people are saying we want flexibility. UM, we also want the connectivity of being in the office and being with our coworkers and doing things for the community and those types of things. Yeah, it's interesting to see how this is going to develop. A vr CEO of pay Corps.

It's a NASDAC listed stock p y c R. I don't know about your pretty but I still go to the grocery store. Do you go to grocer store, you get your groceries delivered? I do go to the grocery store, and let me tell you, it's the worst part of my day. See, that's why a lot of people, more and more people a getting their groceries delivered in Our

next guest certainly is in the middle of that. Sha Wang, CEO and co founder of Boxed uh symbol b o x D on the New York Stock Exchange, joins us here say thanks so much for taking the time here. First of all, just give us a thirty view of your company, uh. And also I think you guys recent came public via a spack. Give us the details there. Yeah, it's been a it's been a pretty wild year, Paul, so Um, we're Boxed. As you mentioned, b o x e D is the company name, but bio x d

s are symbol in the New York sockic Change. So we started eight and a half years ago shipping bulk consumables to consumers and businesses. So we still do that today, but we also sell the technology, including the hardware and all the software that powers that e commerce business via a software and services business as well. So all that is what we do today here are boxed. Well, we gotta start talking about your the issues that are of course kind of hurting a lot of companies across the board.

I want to know the ones that are affecting yours, primarily when we're talking about inventory, because I'm just look at your website here. Looks like you guys deliver things in bulk, which must mean there are inventory and storage costs involved. Talk to us about that. Yeah, absolutely, So we right now are mostly first party merchandiser, so meaning we take him into our of the item and we

sell that item to consumers all around the country. Um to Paul's question before, the challenges of and the opportunities are the real reason why we went vias back and so Um, when you look at our business, traditionally of our business pre COVID was B two B and so creaty. You can imagine that, you know, as folks stopped going into the office, as you know, schools shut down. That was very hurtful for our B two B business last

year to say the least. Um But as a as the comy economy opened up a bit, as we're beginning to live with COVID, we're seeing a rebound there and showing the world what that looks like two three or four or five years into the future was something we could do by going public vias back. So give us a sense here. I mean, we're hearing from a lot of different businesses throughout the economy the challenges of the

supply chain bottlenecks out there. How is that impacting your business? Yeah, that's I mean, that is the I mean, it is the biggest issue afflicting almost the entire planet uh today when it comes to business. Um So, the good thing for Boxed is that because we sell consumables, and because of overt decisions we made years ago with our private brand, almost everything you would buy Unboxed when it comes to

the consumable products are actually made in the US. Um So, when you see those boats lined up off the kind of ports all around the world. That doesn't affect us as much. But I have to say the shortage of of labor supply um that certainly affects us be a last mile and so as our last mile partners start to um you know, have bilats or begin to raise rates because of that shortage and labor um you know, that will of course affect us as well as affect

everyone across the entire industry. Let's talk about who your consumer is here, I and I'm Paul, I guess lives in the suburbs, like I live in the city here in a very small studio, I might add, with a puppy who is adorable. But um, what I want to really want to ask you here is what is the difference in your consumer base? Because if you're talking about essentially bulk deliveries, I don't know if I have room

in my studio to put that. So I'm curious because I'm looking at some notes here, and your headquarters essentially in New York City, your fulfilment centers are across the country in Dallas, by the way, which I might add, I am from. So talk to us about the kind of separation those diversions between say those city dwellers versus those the country folks that are not in New York City. That's such a great question. And the reason why I was laughing is because you know, I would imagine if

we went back in time. Uh. And you know, in the big toilet paper crunch of twenty twenty, and I showed up with boilet papers the apartment. Yeah, I was creating. I'm sure even though you're in the studio, I'm sure you'd be like, all right, we're gonna touch us this

into my apartment somehow. Um. But um, you know, joking aside kind of what we see and what shocked a lot of folks when we did our road show was that UM, at our last read of our demographic, almost seventy of that audience UM surveyed is either in kind of deep suburbs or in rural America. Uh. And so these are folks that don't live within a thirty sixty ninety minute drive of a local warehouse club, so previous to us, they were largely shut out of of stocking

up and saving by doing so. Interesting, So, so, who do you really compete against uh day to day? And how's that maybe changed during the pandemic Yeah, So what you really kind of see from some of the data that we've we've been shown is that, um, you know, we get pitted against Costco, b J's, and Sam's Club

a lot. But you know, when you when you hear kind of what I just said before about like almost sev don't live close to one of those clubs, you actually start to see kind of some of the data we've had access to, you start to see some overlap in the ven diagram with um, traditional supermarkets, dollar stores, um uh, and traditional chains like that that you would otherwise have only have access to if you live in a small town. So one of the big you just

mentioned Costco. One of the big divergences between or differences I should say between say Costco or your average Walmart for for example, is product selection. Costco doesn't have as big of a product selection as say your Walmart does, which has multiple multiple options. Where on that scale do you fall in terms of the things that you offer to consumers. So that is something that we've really really

tried to hone over time. So we started off, you know, almost eight and a half years ago with just two high their products for sale. We're up to closer to three thousand these days, Um, your typical you know, warehouse club will have you know, between three to five thousand items. Your typical supermarket will have closer to hundred thousand, and

you know, your typical superstar will have way above that. Um. But you know where we want to take it, and kind of what we set out in our original investor presentation in analyst Day was that we're going to take the money that we raised close to two hundred million dollars and actually grow a sortment because I think there's definitely some pockets um of inventory where our customers are saying, hey, you know I already buy hundred dollars worth of stuff for you from you on an average shop if you

only had X, Y and Z, I would have thrown it in the basket, but you didn't carry it. So that's a real opportunity for us in the coming years. So talk to us about this use of capital again, UM, broadening your your selection of goods. What other drivers are

you looking for for your business? Yeah, so you know what we It's it's funny because you know, yesterday we rang the bell at the Stock Exchange, immediately came back to the office and got right back to work with the management off site or on site off site UM, and what we talked about was basically making that original investor presentation come true. We want to be a management team that says he was what we presented to you

and this is exactly what we delivered. And so to the question Paul, it was three main levers in BBC B two C. One was growing up brand because you know, it's decently well known in New York City, but you know when you go across the country, you know, unaided awareness is still rather low for Boxed. So marketing investment too is increase of assortment, so whether it's healthy in organics or baby or other products that were not very strong,

and that's definitely another lever. And then the third is UM some of the subscription and loyalty programs that we have to increase retention. So those are three levers that we're going to pull this year. Cha, thanks so much for joining us. Really appreciate learning about the story there. Well, despite this me Kron variant, what I'm going to be busy doing this weekend is booking some ski trips for this winter and spring. A couple of my faves I'm

looking at our Squaw Valley in Lake Taho. It's now been renamed Palisades Tahoe. We'll leave that for another time and discussion. Also looking at another favorite steamboat springs out in Colorado. And guess what, We're going to talk to the guy who actually runs all that stuff, Rusty Gregory, chief executive officer for i'll Terra Mountain Company. Rusty, I'm booking my trips. I'm looking. I'm not letting omikron kind

of slow me down. What's your view of this ski season? Well, you know, we're very optimistic, much better shape than we were last year when there was a lot of unknowns about the pandemic. This year less so and uh and weather. It is hitting the west Wood a vengeance. I'm actually sitting at Mammoth Mountain. It's no three ft overnight and that dorm is on its way to Utah and to Colorado. So very excited. Russy, I want to ask you about

just kind of the next five years. Are you a sci I'm not a sky not necessarily have a I'm gonna work on that, Rusty, see if I can get We'll have to do a little, a little field trip about to Colorado. Well, I want to ask you about the next five years here. Let's say there are more variants. Let's say there is more of these kind of COVID issues where it does require perhaps staying at home, working

from home for a few weeks at a time. As you start to see cases kind of ebb and flow, what is the take from I'm gonna say the skiing industry. I want to leave it to you, but skiing industry on how to deal with something like that, Well, COVID has created a tremendous amount of disruption for everybody. It's very difficult to look out two weeks much more than

five years. But the idea of people working at home and being a bit more in charge of exactly how they work, when they work, where they work, I think fits in nicely to skiing in general. Many people have moved to ski resorts and those uh, those are those people are on zoom calls at the resorts themselves and at their homes, and it also gives them more flexibility during the midweek. On one hand, when you're working at home, you're often called on to work at all sorts of

odd hours. On the other hand, you have you have time off that you didn't have before when everybody was going to the same parking garage and the same office cubicles. So our business during the midweek during the pandemic has been up considerably. And uh, you know, people figure out a way to do the things that they need to do and the things they love to do. And skiing

is one of those things. Outdoor sport, something you can do with others safely, and it uh, you know, I think it can deal with a disruption like most of the rest of our economy over time. Rusty, I'm I'm looking at the weather map now and you know the West Coast is just getting dumped with snow and rain, depending upon where where you are. So hopefully that will help out our good friends in California with a drought. But talk to us about climate change and how that's

impacting your business. A lot of folks are concerned about they just won't be as much snow or as good snow. How do you guys think about that? And you know, including snowmaking. I guess well, we are a bit the canary in the coal mine. Uh, you know, we we are dependent on whether and you know, we really sell the joy of mother nature, and that's a that's very important for us. So it's a concern for us and something that's very important for us to play a leading

role in terms of environmental responsibility. From a business standpoint. Part of the answer to that is to have a large portfolio of assets that allows us to distribute our weather risk over various regions globally and UH and also to offer our guests a product that allows them to hedge their risk to the extent that, whether is not as good as snow is not as plentiful in the area they typically go in on the icon past, they can go to any one of our our forty eight

resorts and UH and enjoy themselves. So, you know, it's something that none of us exactly know what's going to happen, but whether it's more volatile than it was, and in this case, it's brought a tremendous amount of snow to the West and people will be joining the enjoying that here in the in the days and weeks to come. Russie, how are your bookings looking forward for this season and kind of how has the the restricted international travel affected

your business? You know, it's uh yet to be determined exactly what international travel is going to do this year. I'm sure that we'll be down in our resorts that are more dependent on destination travel overseas from overseas, but here domestically, our bookings of are incredibly strong, the most I've been in a business. I hate to tell your listeners how old I am, but well over forty years

and I've never seen this much demand. Ever. People want to break out of their houses and they're downstairs basements, away from their zoom calls and get outside, and they're certainly booking up for this winter and very very strong fashion.

How about inflation? Here are you guys? Actually, I really want to talk about labor because you know, when I get on the ski left often it's an international person helping me get on the ski lift, and lots of international labor outside the US talked to us about your labor situation. You know, like all the rest of the businesses in the in the US, labor has been very difficult to find um and uh, you know correctly, so wages are higher, much higher than they have been in

the past. We've been fortunate. We've filled up to somewhere between eight and of our our staffing rosters. At each one of our resorts, and so we're starting off the season in very good shape. And uh, for our big concern is to keep them healthy and to keep them, you know, at work in a way that's comfortable for them socially distance enough so that they can come back each day wearing masks where appropriate indoors. And so right now we're looking good on the labor side, and we'll

see where where things go this winter. But it's a you know, the ski industry is a person to person business, and we rely on our people in the front lines and they do a great job. Yep, they absolutely do all right, Rusty, thanks so much for joining us, Rusty Gregory, chief executive officer for I'll Tear Up Mountain Company. Thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews at Apple Podcasts or whatever podcast

platform you prefer. I'm Matt Miller. I'm on Twitter at Matt Miller seventy three. On ball Sweeney, I'm on Twitter at pt Sweeney. Before the podcast, you can always catch us worldwide at Bloomberg Radio.