Marketplace - Tupperware, Halloween candy, claw machines — oh my!

Episode Date: October 25, 2024

Tupperware, the once-innovative plastic container brand, filed for bankruptcy a few weeks ago. Other companies still sell via party, but Tupperware pioneered the model. What happened? Also in this episode: Gummy candy overtakes chocolate in the Halloween sales race, and a family trip overseas inspires a claw machine arcade business in Colorado.

A review of this week in the economy, plus a look back at Tupperware parties, and a look ahead to Halloween. From American public media, this is Marketplace. In New York, I'm Kristin Schwab in for Kyra's Doll. It's Friday the 25th of October. Thanks for listening. It kind of feels like we're living in a hold our breath moment. The election, the next Fed meeting. But as we wait, there are plenty of details that could give us some insight into what's to come. So let's get into it. Sadiq Reddy is at Politico. Gina Smilik is at the New York Times. Hey, you two. Hi, Kristin. Hi, Kristin.

Hey, Kristin. So today's big piece of economic data was consumer sentiment from the University of Michigan. It hit a six month high in October. Gina, we, as in we on the show, but also you and I as reporters have long talked about how grumpy people feel about the economy, despite all the economic data. What's changed? Yeah. So, as with so many things right now, it was a little bit political, a little bit economic. What we saw was that confidence really improved a lot among Republicans specifically.

So they saw a tick up, and then we saw a tick down for Democrats. So it does seem like we're seeing a pretty partisan divide here. But then the other thing that happened this month is that people started to feel a little bit better about their labor market outlooks. So people saw a better chance of unemployment staying low and stable, and people

saw better expectations for income growth. And so it seems to be sort of a one-two punch here, a little bit more confident about the job market, and for Republicans at least, a little bit more confident about the trajectory overall. Hmm. Yeah, well, Sadiq, I was wondering, you know, is it odd that sentiment continues to climb as we get closer to a nail-biter of an election? It's going to have this remarkable effect right after the election where we will see a flip among the parties. Whoever wins is going to go in one direction among sentiment and people who affiliate with

the losing party will go in the other direction. There's really an overriding factor in all of this that we do have to keep in mind. Consumer sentiment tracks extremely closely with gasoline prices. The shifts in sentiment really tie in with that. Obviously, inflation overall is down. Gas prices are down from where they were a month ago. They're down a lot more from where they were a year ago. That lifts all boats in the economy. It puts consumer spending on a stronger footing. It makes people feel a little bit better as they're gassing up their cars, especially if they

still have jobs as people generally do right now. So those forces are really providing some support when we're obviously in a pretty crazy partisan period for the election. Mm-hmm. Well, the other thing I mentioned up top is the Fed's next meeting coming in a little less than two weeks. As usual, the Fed presidents did a lot of speeches in the last couple weeks. Gina, can you give us some insight into what they might be thinking about the next interest rate decision? Yeah, so I think what we've seen is a pretty widespread conviction that it makes sense to continue lowering interest rates.

Inflation has come down a lot. We are seeing decent job growth, but overall, the job market has slowed down over time over the last year or so. And so I think that sort of paves the way for lower interest rates. That said, I think there's a real question about just like how much lower and how quickly do we need to get there. That doesn't mean much for this. I think markets broadly expect the federal rates lower rates by a quarter point, but I think it could mean things beyond that. I think there's this real question of how quickly are they going to bring down interest rates going forward beyond November? And I think that that is really going to hinge on the economic data. And that's pretty much what they've been saying across the board.

They expect to make two more rate cuts this year, but, you know, they're going to be watching where both sort of the overall strength of the economy and also the inflation data come in. Gigi Huffington Sure. Well, then, Gina, what will the Fed be looking at the next week or so as we lead up to that meeting to tell it where to go? Gina Sands Yeah, so I think we've got a couple more data reports. We've got PCE inflation, which is expected to be pretty moderate. So I think that will clearly be an enabling factor, assuming it comes in as expected for

the Fed to cut rates. The other thing we'll be looking at is the jobs report. We get the jobs report next Friday. I think people will be keeping a very close eye on that to see whether the labor market. And those are sort of the two big ones between now and the Fed meeting. Yeah. Sadeep, how important is the jobs report at this stage in one direction or the other? And what are your expectations there?

Yeah. Look, the Fed is clearly trying to normalize interest rates. They've been so high because of the wrenching inflation. And now that inflation is back down to really pre-pandemic levels, they've got to contend with what is the appropriate normal place to be. But the economy is not really weakening. And that's what they're looking for. We will, as Gina said, we're going to have a strong GDP report. We're going to have a jobs report that's going to be weird because of hurricane and strike effects and a lot of fluky things that might have been going on over the past month. So they're going

to be looking to make sure that the job market remains fundamentally healthy under the surface. And it still feels like you need some kind of a shock to the economy for this job market to fall out of favor. And we just haven't seen that yet, thankfully. And until then, the Fed just needs to keep finding a way to just bring rates down slowly, but not radically. Hmm. Well, on that note, another report that came out this week was from the IMF projecting the economy will grow even more than expected this year and that we're doing better than other advanced economies. Gina, what's going on here?

What's giving us a leg up? Yeah, it's really all about the American consumer. You know, we've seen really continued strong spending, both on behalf of sort of households and on businesses. You know, businesses are investing, consumers are buying stuff. We're seeing just sort of this virtuous cycle where everything's feeling itself. That is not happening so much in some of our overseas counterparts, particularly in the euro area where growth has actually been a little bit anemic and inflation is falling

a lot more quickly than I think many people had expected. And so we are seeing this divergence where things are really sort of looking pretty comfortable here, things are looking pretty warm. And then in Europe, by contrast, people are saving a lot of their money. They're not going out and spending in the same ways. And that's really driving a lot of that difference. So Deep Ready is at Politico. Gina Smilich is at the New York Times. Thanks again and have a good weekend. You too. Thanks, and have a good weekend. You too. Thanks, Kristin.

Wall Street today seem to also be waiting for clues for what's to come. We'll have the details when we do the numbers. Sadeep and Gina and I just talked about some important pieces of economic data coming out in the weeks ahead. Here's a maybe not as flashy but eyebrow-raising one we got today. The monthly Durable Goods Report from the Census Bureau, which measures business inventory. It saw another small decline this month. New orders fell in September, 8 tenths of a percent, just like they did in August. Thing is, if you strip out the transportation sector, the remaining new orders actually went up by four tenths of a percent. Marketplace's Kayley Wells reports.

KAYLEIGH WELLS The report's biggest downer is just one company. Boeing is two months into a strike and in a years-long struggle with quality control and faulty planes. It is also the domestic maker of planes. Boeing is our airline industry. So the fact that you've got one company that's so dominant that can drag things down. Ed Emmett is a fellow in energy and transportation policy at Rice University's Baker Institute. He adds that the whole transportation industry is bracing for

election results. Elections have consequences and I think everybody right now is waiting to see what's 2025 going to bring. Meanwhile, some manufacturers are still unloading their built-up pandemic era inventory. For instance, trucks are not doing well right now. Dave Herring is senior VP of US sales at Mitsubishi HC Capital America. Inventory aside, he says the biggest reason is the reduction in anticipated reduction of interest rates. As for the uptick in orders in other sectors last month, and David Garfield says that's reason for caution. He is global head of industries for Alex partners. Even when you exclude transportation and show a bit of

an increase, we're really flat year over year. But Garfield says those expected rate cuts and the election will bring more certainty and maybe more orders, but the uptick will be gradual. I'm Kaylee Wells for Marketplace. In many ways, small businesses are the bread and butter of American commerce. They make up more than 99% of businesses in the US. So when we saw this stat from the Chamber of Commerce, our ears perked up. Colorado had the largest growth rate of new business applications in the country last year, up 115% from the year before. So that's the setup for this installment of our series, My Economy. My name is Leanne Ton. I am the co-owner of Crane Games in Aurora, Colorado.

What inspired me to open Crane Games was a trip that my business partner and I took to Asia, where we saw a lot of these toy claw machines, arcade, that just littered the streets of Asia everywhere we went. And we just saw that we didn't have anything like that, especially in Aurora. So that's when we decided that we didn't have anything like that, especially in Aurora. So that's when we decided that we wanted to do this. And not only that, but we spent a significant amount of money for our kids to play this.

So we said, hey, it would just make sense for us to go ahead and open one for them now. We officially opened in July of 2024 in the summer. After working with a specific vendor to build all of our machines, we had to ship them from abroad, packaging it correctly, getting through customs. That in of itself was very time consuming and very difficult. I mean, I never thought I'd have to learn about logistics or importing until we decided to jump into crane games. On our grand opening day, I was super nervous.

It was overwhelming. We just couldn't believe that we have gotten this far because at some point we just thought it was never going to happen, especially with the logistics from abroad. The ambiance, the buzz, everything was just more than I have expected. You know, you actually hear adults squealing inside our arcade.

It's not just kids. It turns out that our hunch about the community's interests in this type of entertainment has been correct, and so we're just thriving. We recently signed a lease for our second location in Thornton, Colorado, and we're hoping to have it open by mid-December. So prior to the winter break, because we know families gather, juggling four kids in school with a shop and another upcoming shop that we're building out has

been overwhelming, but it's been a good thing. It's been amazing. I just feel so blessed to even have this opportunity. Leanne Tun, co-owner of Crane Games in Aurora, Colorado. We can't do this series without you. Write to us about what's happening in your economy at marketplace.org slash my economy. Coming up… Gen Z and millennials are opting more for the gummy candies. The older generations are still interested in chocolate.

The most polarizing of generational differences. But first, let's do the numbers. The Dow Jones Industrial Average lost 259 points, 6 tenths percent, to finish at 42,114. The Nasdaq gained 103 points, 6 tenths percent, to close at 18,518. And the S&P 500 shed 1 point, staying flat, to end at 5808. For the week, the Dow lost two-and-seven-tenths percent, the Nasdaq gained two-tenths percent, and the S&P fell one percent. We heard from Kayleigh Wells about durable goods orders for September, dragged down in part by the two-month strike at Boeing. Shares declined to tenth percent. And some other

durable goods stocks, Whirlpool Corporation drained 5.7%. Stanley Black and Decker fell 9.10%. Ethan Allen Interiors was unchanged. Bonds fell. The yield on the 10-year T-note rose to 4.24%. You're listening to Marketplace. This podcast is supported by Fundrise. Buy low, sell high. It's a simple concept, but not necessarily an easy concept. Right now, high interest rates have crushed the real estate market. Prices are falling and properties are available at a discount, which means Fundrise believes now is the time to expand the Fundrise flagship fund's billion-dollar real estate portfolio. You can add the Fundrise flagship fund to your portfolio in and other information can be found in the fund's prospectus at fundrise.com slash flagship. This is a paid advertisement. I'm Kyle Rizdal and on how we

survive, we've embedded on the front lines of a fight between the U.S. military and climate change. But that fight's not happening on traditional battlefields. Instead, it's at places like the edge of the Arctic Ocean. Oh my God! It's a little windier out here. Just a little. On changing terrain. And sea level rises, storms like that will do more and more damage.

And in state-of-the-art military facilities where I became a lab rat. We're going to drop it from 110 degrees Fahrenheit down to 34 degrees Fahrenheit. I can feel my muscles tensing, right? Discover how the US military might shape our climate future. Listen to How We Survive wherever you get your podcasts. This is Marketplace. I'm Kristin Schwab. This week, Tupperware, the iconic food storage company, agreed to a sale of the business

to a group of lenders. Tupperware filed for bankruptcy last month after a couple years of steep revenue drops. One reason for that is some consumers are moving away from plastic. Also, people are shopping differently. Tupperware was a pioneer in selling at social gatherings, called Tupperware Parties, a business model that's been replicated by many other companies that sell makeup, jewelry, and clothing. Marketplace's Stephanie Hughes looks at where the party started and where it's gone. When Tupperware debuted right after World War II, it was considered high-tech, and people needed to see it in order to understand it.

Yes, there's a party going on at Mrs. Betty Martin's house. It's a Tupperware party, and it's really fun. That's from a 1961 Tupperware ad. The Mrs. Betty Martins of the world would invite their friends over for a demonstration of Tupperware's airtight storage. One seller was famous for filling a bowl with water or even grape juice, sealing the lid with that iconic burp and then tossing it around the room.

It was an interesting new way of selling and it was something that consumers responded well to. Neil Saunders is a retail analyst with Global Data, but he says this was a particular moment in time. The internet just changed all that. Tupperware is now available online and in-store from some retailers, including Amazon and Target. But nearly 90% of the company's sales last year came through direct sellers. And Sonder says Tupperware has another problem. Tupperware does last, so once you've bought a set, you probably don't need to buy another

one for 10 years, maybe more. Compare that with skin care and makeup. When people are loyal to a product, they might refresh their supply on the regular for decades. Tammy Jones of Wake Forest, North Carolina, started holding Mary Kay parties more than 40 years ago. We talked recently over Zoom. I see you.

Do you see me? I do not. Okay, good. So I didn't get my makeup on yet. Jones is a Mary Kay devotee. When she started selling, she was divorced and also working as a dental assistant. She did it just part-time for some extra cash. I never made tons of money. Jones says she usually earned one or two thousand dollars a year.

And there are other benefits. She says taking charge of the parties increased her confidence. You got to be able to get up there and talk and that's intimidating. But the more you do it, the more easier it gets. Jones doesn't host parties these days and sells just to a few friends and members of her family. Babson College marketing professor Lauren Biedelschmacher says the party plan business model works best for people who sell something because they love it.

If you're doing it as your livelihood to provide for your family, that could be problematic. At least one company has faced legal action over problems sellers have faced. In 2021, the clothing company Lou Leroux settled a lawsuit with the Attorney General of Washington State. The lawsuit accused the Attorney General of Washington State. The lawsuit accused the company of misleading sellers by promising them big profits, when in reality many were left with unsold merchandise and debt. As part of the settlement, Lula Row denied any wrongdoing. Also, most party plan companies encourage sellers to recruit others to sell. Beatlesfucker says in communities, that means sellers are competing with their friends

for the same customers. Then it becomes, well, I'll buy this product from you and you buy this product from me, and then nobody's really making any money. The Direct Selling Association said in a statement that there is never a lack of customers for anyone willing to give their time and energy to selling. It says direct sellers averaged more than $6,000 in sales last year. Lauren Beatleschbacher says a lot of people are now doing this on social media.

You just create an event. And because your friends have opted into this online event, the content that you post is going to show up in their feed. She says part of the allure is you can only buy this way if you're invited. Really appealing to our middle school senses of not wanting to get left out of the party. Tupperware itself acknowledged in a bankruptcy filing that it's been late to the party when it comes to how people shop now. It noted the technology it's providing to its sellers hasn't been on par with what competitors

use. That's one reason a lot of those sellers have quit, leaving the party entirely. I'm Stephanie Hughes from Marketplace. Halloween is less than a week away. The National Retail Federation expects Americans to spend $3.5 billion on candy for the holiday this year. This is your reminder to stock up for trick-or-treaters. But if you have already done your candy shopping, maybe you've noticed a change in what kinds of sweet treats are on the shelves. Jacqueline Peyser wrote about

this in the Washington Post the other day. Jacqueline, welcome to the program. Thanks for having me. So when you think of Halloween candy, traditional Halloween candy that you grew up with, what comes to mind for you? Well, I think it depends on the household. You know, some people load it up on, you know, Snickers and Hershey's and three Musketeers that have a variety pack. Some people did Skittles. My mom would mainly buy Skittles and Starbursts and stuff.

But I think when we'd fill up our baskets, there was usually a good chunk of chocolate that was in that bag. COLLEEN O'BRIEN And so how is that Halloween treat shifting? What are we going to see more of this year? KITTY PARKER Yeah, so I spoke to some analysts who kind of study commodities in the candy and chocolate space. And one really interesting thing they said was that we're going to see less chocolate this year and probably next year too.

There's a couple of reasons for that. One thing is simply price. Cocoa prices for the price of cocoa commodities have gone up a lot in the last couple of years and Also, there's just more interest in gummy and sour and chewy candies And it's this like interesting like cyclical chain of events where Prices are higher for chocolate So, you know consumers are less likely to buy them because they want to grab for something a little bit cheaper when it comes to Like a little sweet treat.

But then also there's more options than ever because these confectionary companies are trying to diversify because chocolate is so expensive. So you're seeing more flavors, more varieties, more combination packs of candy than we may have seen in the last couple of years. Who's actually reaching for the gummy worms over chocolate and what kind of gummies are we seeing? Yeah, mainly it's Gen Z and millennials are opting more for the gummy candies. The older generations are still interested in chocolate. And those are also kind of the consumers that are driving sales during this time of year. I mean, a lot of people in this demographic have kids or maybe are handing out candy or are interested in buying candy for their own adult parties.

And then a lot of these companies are putting out specialty Halloween-style candies. So we've already seen that with chocolate. I mean, there are special kinds of Kit Kats that are like green and Snickers that have fun decorations on them. But we're also going to see Twizzlers that are shaped as little ghosts. There's going to be new kinds of candy corn that are like autumn-themed, sour patch that are all different flavors of apples. Yeah, so very, very seasonal candy is coming from these gummy

folks. I'm not a candy corn fan, I guess is where that noise was. It's so divisive. Candy corn is really divisive. What do you do though if you're Hershey's or a classic chocolate maker and that's your product and you have to deal with rising costs and still getting those things on shelves and into people's hands. I mean, the thing is with certain snacky foods, if consumers really like them, they're still going to buy them.

I mean, even if they're a little bit higher, you're still going to reach for that if that's your favorite candy or sweet treat. But they've also, these companies have made a little bit of an adjustment. So some analysts that I talked to said that this year or next year we should expect to see just a little bit of a difference with the chocolates. So more chocolate coated items, more milk chocolate because that requires less cocoa. Candies that have nuts in them will maybe have more than usual. Something that kind of fill up the space that requires less cocoa, which then is a less price for these confectionary companies.

Most important question, are you a chocolate person or a gummy person? I'm a gummy person. So this is really working in my favor. I think that chocolate is just too sweet here, specifically sour. Sour candy is my advice. Jacqueline Pizer writing about Halloween candy in The Washington Post. Jacklyn, thanks again for coming on the show.

JACKLYN PIZER Thanks so much for having me. GIGI NONERA This final not on the way out today, back to jobs. Sadiq actually made a nod to this at the top of the show. The Bureau of Labor Statistics came out today with its monthly strike report. The report comes out a week before the unemployment report. And it showed that in October, at least 44,000 workers have been on strike. Of that 44,000, 33,000 are striking machinists at Boeing. That will, of course, factor into

the unemployment report next Friday. Our theme music is composed by BJ Liederman, Marketplace's executive producer is Nancy Fargoli, Donna Tam is the executive editor, Neil Scarborough is the vice president and general manager, and I'm Kristin Schwab. Have a great weekend, we'll be back on Monday. This is APM. I'm Kyle Rizdal. And on how we survive, we've embedded on the front lines of a fight between the U.S.

military and climate change. But that fight's not happening on traditional battlefields. And on how we survive, we've embedded on the front lines of a fight between the U.S. military and climate change. But that fight's not happening on traditional battlefields. Instead, it's at places like the edge of the Arctic Ocean. Oh my god! It's a little windier out here. Just a little. On changing terrain. And sea level rises, storms like that will do more and more damage. And in state-of-the-art military facilities where I became a lab rat. We're gonna drop it from 110 degrees Fahrenheit down to 34 degrees Fahrenheit. I can feel my muscles tensing, right? Discover how the US military might shape our climate future. Listen to How We Survive wherever you get your podcasts.