The circular economy is no longer a novelty. Instead of buying a drill that will be used two or three times and then locked in a cupboard, increasing numbers of us are renting from our peers via apps.. And rather than making the choice between cheap fast fashion and much less affordable designer labels, millennials and Generation Z’ers, in particular, are comfortable with buying premium brands secondhand. This is, by and large, a good thing – not least because it prevents an awful lot of stuff from piling into the nation’s landfill sites.
The circular economy tends to be associated with the startup boom – companies that start out small and build an audience – but it seems bigger names are getting in on the act.,
Witness Fat Llama, a British peer-to-peer rental company launched in 2017. This year the company launched a new enterprise platform aimed at allowing major retailers to offer a rental option to their customers. In the first instance, the focus is on furniture and the company has so far partnered with national brands, John Lewis, DFS, and Sofology.
So what’s going on here exactly? The first thing that has to be said is that Britons of a certain age are no strangers to renting high-ticket goods from High Street stores. For instance, track back to the 60s and 70s most consumers opted to pay for their color TVs through monthly rental deals rather than buying outright. It was a question of affordability back then and as wages rose and prices fell (relatively speaking), acquisition became the order of the day.
Today, affordability may still be a factor. As the pandemic drags on many of us may well be reluctant to spend upfront on big-ticket items, such as furniture. Added that is the fact that here in the U.K., house purchase prices have risen beyond the reach of many first-time buyers. And if you’re renting an apartment on a short-term lease, maybe you would rather pay monthly for the furniture too.
A Fundamental Shift
These are situational factors, but Fat Llama co-founder, Chaz Englander believes there has been a more fundamental cultural and generational shift. Put simply, the millennial and generation Z cohorts are not that comfortable with a buy, discard forget approach to consumption.
“Sustainability is an enormous issue,” Englander says. “People are no longer comfortable with the idea that you buy something and then throw it away. Maybe it goes to eBay or Gumtree for a while but ultimately it ends up in landfill.”
As he sees it, people in their twenties are particularly interested in living sustainably and that desire to tread a bit more lightly on the planet is driving the circular economy as whole. Part of the trend is a demand for rental furniture, not just from specialist marketplaces but from big retail names. Hence Fat Llama’s list of partners.
But are big retailers – who after have done very well out of charging upfront for their products – really ready to embrace a new paradigm?
Adaptation
Fat Llama’s experience suggests that rather than resisting the sustainability trend, some companies have been proactively looking at how to adapt to changes in the consumer marketplace. “We were approached by a household name about building an enterprise platform in 2019,” recalls Englander. “
On that occasion, Fat Llama said no, deciding instead to focus on its existing peer-to-peer business. But circumstances changed. “We decided it wasn’t something we want to work on at that point but then the pandemic happened and we lost about 80 percent of our transactions. So we decided to look again at a business-to-business solution.”
It wasn’t quite a case of pushing at an open door. Englander says that while strategists within retail organizations detected demand for rental options, financial directors tended to be a lot more cautious. But now it seems that strategies are indeed changing. Englander cites the example of Sofology – now designing products specifically for rent through its The Loop initiative.. “They have a metal frame which can be reupholstered and reused,” he says.
On Trial
In the first instance, Fat Llama ran a trial with John Lewis. Although scheduled for eight weeks, the rental stock sold out in 48 hours.
With that market validated, Fat Llama has developed a rental platform that reflects the brands of participating retailers and is looking ahead to further partnerships.
But is there really a market trend here or just a temporary blip? And will increasing numbers of retailers turn to marketplace providers to open up new circular economy business lines? There are signs of wider changes afoot. Beyond Fat Llama, department store chain Selfridges has also developed a rental offering in collaboration with lending company HURR.
At this point, we’re probably looking at a grand experiment that may or may not signal a long-term market sea change but it’s certainly the case that retailers are seeing a need to innovate and perhaps also to partner with sharing economy companies.
OTTAWA – Bank of Canada governor Tiff Macklem says there is a lot of uncertainty around how artificial intelligence could affect the economy moving forward, including the labour market and price growth.
In a speech in Toronto at the Economics of Artificial Intelligence Conference, the governor said Friday that the central bank is approaching the issue cautiously to get a better understanding of how AI could affect its job of keeping inflation low and stable.
“Be wary of anyone who claims to know where AI will take us. There is too much uncertainty to be confident,” Macklem said in prepared remarks.
“We don’t know how quickly AI will continue to advance. And we don’t know the timing and extent of its economic and social impacts.”
The governor said AI has the potential of increasing labour productivity, which would raise living standards and grow the economy without boosting inflation.
In the short-term, he said investment in AI is adding to demand and could be inflationary.
However, Macklem also highlighted more pessimistic scenarios, where AI could destroy more jobs than it creates or lead to less competition rather than more.
The governor called on academics and businesses to work together to shed more light on the potential effects of AI on the economy.
“When you enter a dark room, you don’t go charging in. You cautiously feel your way around. And you try to find the light switch. That is what we are doing. What we central bankers need is more light,” he said.
This report by The Canadian Press was first published Sept. 20, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.
The S&P/TSX composite index was up 254.62 points at 23,847.22.
In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.
The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.
The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.
The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.
This report by The Canadian Press was first published Sept. 19, 2024.
