The EU Goes Meta

Plus: Reports of Big Box retailers’ death have been greatly exaggerated ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

December 20, 2022

Read in Browser

TOGETHER WITH

Good morning.

As the days grow darker and colder, cuffing season is upon us, and that’s resulting in some strange bedfellows.

Carbon-free electric car maker Lucid is deepening its relationship with its largest investor, Saudi Arabia’s Public Investment Fund, which manages money for the world’s second-largest producer of ozone-killing oil after the US. As part of a newly closed private equity offering, the Saudis will acquire 86 million more shares in the EV company for $915 million, giving Lucid all the gas money it needs to shore up its balance sheet heading into the new year.

Morning Brief

•

Facebook Marketplace looks ripe for EU pain.

•

Strip malls are coming back to life.

•

Toys are fun for girls and boys…but mostly nostalgic adults.

Tech

EU Casts Antitrust Shadow Over Meta

Presumably, antitrust regulators are nowhere to be found in Mark Zuckerberg’s metaverse, but until that transition is complete, he’ll just have to deal with them poking into existing parts of his business.

The EU said Monday it believes Facebook Marketplace, Meta’s classified ads service, violates antitrust laws. If an investigation determines Meta is guilty, it could be hit with a fine equal to up to 10% of its global annual turnover — which for its 2021 takings would have equaled almost $12 billion.

This Little Piggybank Went To Market…

The EU has been on the warpath against US Big Tech companies for five years, and antitrust hawk Margrethe Vestager has doled out some hefty fines. Earlier this year Vestager scored a victory over Google. She slapped it with a $3.3 billion fine for illegally favoring its own shopping service in 2017 – Google’s appeal was dismissed in November. Since 2017 she’s launched investigations into Apple, Amazon, and now Meta.

Facebook marketplace launched in 2016 and is largely analogous to websites like Craigslist where people sell off their unwanted items. The EU believes the fact that Marketplace is nestled inside Facebook gives it an unfair competitive advantage:

•

The EU said Facebook users have access to Marketplace users “whether they want it or not” and this gives the service a “substantial distribution advantage that competitors cannot match.”

•

It also believes Meta actively disadvantages rival classified ad services when they advertise on its platform, saying Facebook feeds data from those rivals’ ads to Marketplace to give itself an edge.

A bird in the hand: While EU antitrust action looms over Meta, its much smaller cousin Twitter is apparently too small to worry about. CEO Elon Musk got regulatory hackles up this weekend after briefly banning links to other social media sites, but a London law professor and former EU economist told Bloomberg Twitter is likely too small to qualify for Europe’s sanctions designed to clip Big Tech’s wings. “The practice is exclusionary, which is a violation of antitrust law, but only if you are a dominant company,” Prof. Tommaso Valletti told Bloomberg. A welcome reminder that the whole world does not revolve around Twitter.

– Isobel Asher Hamilton

Real Estate

Big Box Stores are Fueling a Commercial Real Estate Revival

(Photo credit: Mike Kalasnik/Flickr)

Don’t close the book on Barnes & Noble just yet. Contrary to popular belief, the chain of sprawling bookstores isn’t just surviving in the age of Amazon — it’s thriving, with 30 new stores planned for next year.

It’s not the only one. A bevy of old-school, brick-and-mortar retailers have either grown their physical footprints in the past 12 months or plan to grow in the next 12, as detailed in a Wall Street Journal feature published on Monday. The return of big box to the big time is in turn creating a post-pandemic boomlet for the commercial real estate market.

Get in Loser, We’re Going (In-Person) Shopping

The commercial real estate market has been a roller coaster ride, with top hats and dips that match almost perfectly with broader economic conditions. Footprint expansions peaked in 2007, when big-box retailers leased 130 million square feet of new store space. Then, of course, came the 2008 financial crisis. And in the following couple of years, any chance at a full retail rebound was stunted by Amazon finally going thermonuclear and forever changing consumer habits. The twin destructive forces were enough to squash mall staples like Sports Authority and Toys R Us more or less for good.

But recovery did happen. While it never again reached the peaks of 2007, big box retailers steadily grew through much of the 2010s… before, of course, COVID-19 crashed the party and sent the industry into yet another existential crisis. Now, big box retailers are once again looking for space to unpack their big boxes, but this time they will attempt to “right size” while employing location tracking data to settle on the perfect spot:

•

TJ Maxx and Marshalls parent company TJX added 104 new locations this year, with plans for 1,500 in the next few years, a spokesman said. Ross Dress For Less opened 92 new locations this year. Meanwhile, Burlington — of coat factory fame — is set to open nearly 90 new stores in their fiscal year ending on January 28.

•

Overall, 60 million feet of large-format retail space (defined as 20,000 square feet or more) has been leased in 2022, Brandon Svec, national director of US retail data analytics firm CoStar, told WSJ. That continues 2021’s rebound though is shy of 2019’s 77 million square foot expansion.

Noble Endeavor: While Barnes & Noble may never match its nationwide peak of 726 stores in 2008, the chain does still have around 600 locations alive and kicking. It plans to add another 30 stores in 2023, including two Boston-area stores that previously housed brick-and-mortar Amazon Books stores. Now that’s an act of revenge worthy of The Count of Monte Cristo.

– Brian Boyle

Sponsored by Pendulum

Interested in Better Health? Just Follow Your Gut

Face it, most folks don’t think about gut health when it comes to improving overall well-being.

But recently, doctors and dieticians are deep-diving into a probiotic strain called Akkermansia muciniphila, analyzing how it boosts gut and metabolic functioning while repairing the gut lining.

Healthier gut = healthier you: This keystone strain for gut health directly corresponds with stronger metabolisms, healthier body weights, GI functioning, elevated energy, and tons of other health benefits.

So… If Akkermansia is so powerful, why isn’t everyone taking it? Unfortunately, you can’t find it in your food — it can only be sourced through DNA sequencing.

Since most of us don’t have a chemistry set in our basement, Pendulum figured out how to synthesize it into a daily probiotic, the only one of its kind on the market.

Don’t just take our word for it. Try Akkermansia today and receive 20% off your first month of Pendulum with code UPSIDE.

Retail

Adult Toy Buyers Keep the Market Alive

Turns out if Toy Story 3 were true to life, Andy would have bought himself another Woody after heading off to college.

Forget Timmy and Jane, “Kidults” are actually the ones keeping the toy market afloat today, using their discretionary income to buy their nostalgia and keep toy sales revenue up even as sales volume slumps.

I Don’t Want to Grow Up

Kidults may sound like grownups crashing on mom’s couch indefinitely, but the term encompasses any toy buyers 12 and older, basically, anyone older than junior high with discretionary income. The demographic is the biggest driver of growth in the industry, responsible for a quarter of all toy sales annually or roughly $9 billion, according to the NPD Group. Most parents seek out a variety of moderately priced toys for gift-giving purposes, but because kidults often have allowances or, like, full-time jobs, they are willing to spend more money on items.

This idiosyncratic clientele is a boon for toymakers, who saw unit sales for board games, puzzles, and playsets swell during the pandemic, only to watch them come crashing down 3% in the first nine months of 2022. Thanks to kidults and their buying power, however, inflated prices helped revenue increase by 3% over the same period. The key to kidult sales, toymakers say, is serving up a sweet slice of ‘rememberberry pie’:

•

Toy companies used to rely on more original products – Mr. Potato Head, Lincoln Logs, Slinkys – but after Star Wars hit movie screens in 1977, makers became absolutely bullish on intellectual property licensing, and buyers who were children at the time turned into lifelong customers. Now brands like LEGO have a toy based on basically every IP in the world to attract sentimental kidults.

•

Companies also grow with their customers. Razor, known for the push-scooters riders are guaranteed to whack into their shins after a poorly-attempted tail whip, developed electric models to sell to its now grown-up clientele.

Game On: In the world of video games, the number of players is going up, but global revenue is expected to shrink for the first time in over a decade, from $192.7 billion in 2021 to $184.4 billion last year, according to research firm Newzoo.

Publishers might want to take a page out of the book of Big Toy, but they’ve got to make a good product. Up until the 2010s, every gamer knew “licensed” was code for “you’ll never touch my money.”

– Griffin Kelly

Extra Upside

•

Epic Fail: Fortnite maker Epic Games pays $520 million to the FTC for violating child privacy rules.

•

Tip of the Cap: EU sets a new, temporary price cap on gas prices.

•

How do Fortune 500 companies lock up the best talent abroad? Remofirst. They’ve raised $14.1M to help the best startups around the world build a top-tier global workforce with ease. As your Employer of Record, Remofirst handles all the international HR aspects 一 navigating local laws, paying employees in multiple currencies, and providing HR benefits on your behalf. Start hiring in over 150 countries, with 24/7 customer support, and help with Visas. Plus, as a Daily Upside reader, get 3 months free for your first employee. Dip your toes into the global talent pool with Remofirst.

Just For Fun

Hot meets cold.

All aboard!

ADVERTISE // CAREERS

No longer want to receive these emails? Unsubscribe here.

//campaignmonitornewsletter.everestengagement.com/ea/BntD2QJCyg/?e=postie@btcnews.com.au’ width=’1′ height=’1′ style=”margin-top:0 !important;margin-bottom:0 !important;margin-right:0 !important;margin-left:0 !important;padding-top:0 !important;padding-bottom:0 !important;padding-right:0 !important;padding-left:0 !important;border-width:0 !important;height:1px !important;width:1px !important;-ms-interpolation-mode:bicubic;” />