Retail giants have had a particularly hard start to 2022 as supply chain stress and heightened gas costs have cut into sales revenue.
Sales decreased by a full 25% this year compared to a year before, according to Bed Bath & Beyond’s most recent earnings report, on Wednesday. The Union, N.J.–headquartered company reported a net loss of $385 million, compared to a loss of $51 million last year. The company’s response? It fired CEO Mark Tritton.
But maybe that shouldn’t have been such a surprise in light of what’s going on with consumer spending, or not going on with it.
Previously, Walmart, Target, and Amazon all revealed Q1 earnings that trailed estimates. Consumer spending has been mostly strong in the face of high inflation and a potential recession. But earlier this month, the Commerce Department revealed that domestic retail sales for things like cars, electronics, and e-commerce had slowed for the first time this year.
With inflation currently the highest it’s been since 1981 in the U.S., and the Federal Reserve enacting tighter monetary policy to try and bring them down, experts and business leaders alike have been sounding the alarm that a recession could be on the horizon. Two-thirds of macroeconomists recently surveyed by the Financial Times and the Initiative on Global Markets said they’re anticipating a recession, while more than three-quarters of global executives surveyed by business insights company Conference Board said they are as well.
Replacing Tritton on an interim basis is Sue Grove, who previously served as chair of the board’s strategy committee.
“After thorough consideration, the board determined that it was time for a change in leadership,” wrote Harriet Edelmen, chair of the company’s board of directors, in a statement announcing the leadership change. Tritton joined Bed Bath & Beyond in 2019 after serving as chief merchandising officer at Target, where he had expanded the company’s private label brands.
“We are confident Sue brings the right combination of industry experience and knowledge of Bed Bath & Beyond’s operations to lead the company, focus our resources, and revise strategy, as appropriate,” wrote Edelman in her statement.
Grove wrote that she is aware of the “macroeconomic” environment Bed Bath & Beyond is currently facing.
“In the quarter there was an acute shift in customer sentiment and, since then, pressures have materially escalated,” she wrote, highlighting the impact of inflation and fluctuations in consumer purchasing patterns as a result of the pandemic on Bed Bath & Beyond’s business.
Edelmen noted that Tritton had helped the company navigate through the pandemic during his tenure as CEO, along with reconfiguring Bed Bath & Beyond’s overall strategy, delivering returns to shareholders, investing in technology and infrastructure.
Those actions, however, could not preserve his place at the top of the company. “The simple reality…is that our first quarter’s results are not up to our expectation,” wrote Grove.
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