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Ulta’s Target shop-in-shops.

On this day in 1933, President Franklin Delano Roosevelt, in a preliminary step to ending prohibition, signed into law a measure that allowed brewing and selling beer in the US…and that’s why today is National Beer Day, which many celebrate by ordering a cold one. As if you needed an excuse.

In today’s edition:

—Erin Cabrey, Andrew Adam Newman, Alex Vuocolo

STORES

Ulta Beauty in Target store

Target

Ulta Beauty will “pause” expansions of its Target shop-in-shops this year, CEO Kecia Steelman said Thursday.

“In joint partnership with Target, we’ve made the decision to really lean into the 600-plus stores that are open this next year and really look at ‘How do we continue to drive efficiencies and leverage the learnings that we’ve had to really unlock value for both of us collectively together?’” Steelman said in response to an analyst’s question at JPMorgan’s 11th Annual Retail Round Up Conference.

The move will allow Ulta Beauty and Target to focus on “improving,” and creating “even greater value,” she added, noting Ulta Beauty hasn’t announced plans for the shop-in-shops beyond 2025.

Target currently operates 610 Ulta Beauty shop-in-shops, which sell prestige cosmetics in a dedicated 1,000-square-foot Ulta Beauty-branded section within Target. The partnership, first announced in 2020, began with 100 store openings in 2021. In 2022, they expanded the partnership with a goal to reach 800 locations. They’ve opened at least 100 every year since, including 101 last year.

While then-CEO Dave Kimbell ended Ulta Beauty’s Q4 2023 earnings call looking ahead to future shop-in-shop expansions, on its Q4 2024 call last month, Steelman, on her first call as CEO, made no forward-looking statements about the partnership.

Keep reading here.—EC

From The Crew

RETAIL

A promotion for Target Circle Week on a giant red Target bag at a location in Manhattan.

Andrew Adam Newman

Foot traffic at Target fell for the ninth consecutive week, even though the week included all but one day of Target Circle Week, the retailer’s seasonal deep-discount sale.

For the seven days that began March 24, one day after the latest Circle Week began, foot traffic fell 3.8% YoY, according to data from Placer.ai. Credit Circle Week for this being the smallest YoY drop in the nine-week plunge, when traffic has been down as much as 8.8%.

While correlation—we’ll say it again—is not causation, note that Target’s traffic slump began in the first full week after it announced it was dismantling its diversity, equity, and inclusion (DEI) efforts. The retailer also is the subject of a 40-plus day Lenten boycott spearheaded by Black clergy that continues through Easter.

Keep reading here.—AAN

SUPPLY CHAIN

Nintendo Switch

Emanuele Cremaschi/Getty Images

It’s a big week for gamers. Pre-orders for the Nintendo Switch 2 open in North America on Wednesday. Next-gen systems only come along every so often, but when they do it’s a major retail event. The PlayStation 5 has experienced multiple supply chain hiccups since its release in November 2020, including feeling the brunt of a semiconductor shortage in 2023. Now some are wondering what Trump’s tariffs will mean for the Switch sequel’s launch—though reportedly the new trade duties were already factored into its $450 price point.

Here’s what else is going on in retail this week:

In data: The latest consumer price index is coming out on Thursday, providing inflation data for March. The last report showed inflation slowing in February to 0.2% month over month and 2.8% year over year. Tariffs are expected to eventually raise this number, but by how much is an open question. One Federal Reserve model estimates that under an “extreme” scenario, assuming 60% tariffs on Chinese and 10% on all other countries, core inflation could rise between 1.4% and 2.2%. Trump last week imposed a blanket 10% import duty, while setting higher rates on a number of countries.

Keep reading here.—AV

Together With Walmart Marketplace

SWAPPING SKUS

Today’s top retail reads.

Unmade in America: How tariffs, ironically, are making it much more expensive to build US factories. (the Wall Street Journal)

Flat footed: How sneaker brands’ strategy to shift more production from China to Vietnam to avoid tariffs has become its own problem. (Financial Times)

Advanced placement: How media buyers are trying to navigate tariffs. (Digiday)

HOT TOPIC

At the mall, it’s where band tees are the only tees. In Retail Brew, it’s where we invite readers to weigh in on a trending retail topic.

As new tariffs make supplies and ingredients more expensive, it could increase the practice of shrinkflation, when brands shrink their products, often imperceptibly, while charging the same price or more.

You tell us: Do you think new tariffs will increase instances of shrinkflation? Cast your vote here.

Circling back: Last week, we told you about a Yopt report that found 7 out of 10 online reviews that mention the color red are negative, often because the color looks different in person. We asked if you’ve experienced this disappointment. The majority of you, 61.8%, have been disappointed because red products you ordered looked different in person, while 38.2% have not been thusly disappointed.

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