taylor: let's take a look at how equities performed on the day. the russell 2000, the best one day since july. the s&p 500, we've been tracking this, the 50 and 100 day moving average, finally closing above the level. maybe the signal for the santa claus rally. "what'd you miss?" it starts right now.

caroline: i'm caroline hyde. today we are focused on retail. at the start of the pandemic, the industry shut its doors. it was supposed to be the information he businesses, but today we will discuss how it might've been the best thing to happen too many companies. consumers are spending, companies reshape themselves. when you look at industry change, things have accelerated for the retail sector. taylor: investment in retail spaces, listen to this analysis on what it took to get them through the covid pandemic. >> the pandemic shock to the global economy disrupted every sector business, but it was a severe low to retail that is now proving to have the most

transformational industry effect. >> it's like 9/11, it's a hurricane. >> in early 2020, physical stores close their doors. what was supposed to a temporary sacrifice turned into more than a year long struggle to remain vital. the struggle was insurmountable for some regional chains and many of the mom-and-pop stores seemingly disappeared overnight. the but changes increasingly being seen as a net positive for global retail. >> we have consumers who have the dollars to spend. >> the pandemic created incentives that many needed to fully commit to e-commerce, rather than just dabbling around the edges. >> whether it's a box on the doorstep are increasingly drive

up trip to our parking lots to the classic in-store trip. >> in mexico and russia, companies built more secure payment systems to make consumers comfortable shopping online. in brazil, they offered promotions and finalized transactions. while the online pivot allowed companies to regrow at an unprecedented time, physical store shelves are still there. in the u.s., chains with more than 50 stores are expected to add more than 4000 locations this year. that will mark the first increase since 2017. many of the country's biggest names are drawing more shoppers and before the pandemic. the comeback is a big reason why one etf ha surged, beating the

s&p 500's advance. it has allowed retailers to recover and come out stronger than ever. now the question becomes, with the changes be resilient in the face of omicron? taylor: that is a voice we are all familiar with, our very own romaine bostick. we want to pivot to the reporter behind that story, break down for us what you notice in this, the winners come the losers, the changes that may be the retail industry really needed. >> what we saw is that retailers with enough scale, enough money, really went after this vision of intertwining stores and e-commerce. a jewelry store taking that big purchase and putting it online. things like retailers using in-store employees to help e-commerce shoppers.

it has jumpstarted the whole shift where stores and e-commerce sinners are intertwining. caroline: which companies did really well during this transition and which did not? matt: stores like target, walmart, costco, general merchandise companies, department stores are still struggling. a company like macy's is spending a lot of money trying to transform. but big companies that have a lot of money to spend really have the advantage. katie: how much to see how much control do ceos really have over margins? matt: what we are seeing is that

a lot of companies are trying to do whatever they can to automate , things like robotics, adding more digital content, things like that. these companies have realized the need to grab onto this experience. caroline: meanwhile we will dig into it even further. we will discuss whether -- what it means to be in recovery. tell us as we stand on the precipice of concern, for some merging into panning with the new variant, is that going to

hinder retail at this important seasonal period, or is it going to be ok? >> it's going to be very hard to maintain the same level of shopping if you have people at home because they are testing positive for covid. we know with the new variant, it will create a lot of tests. we hope it doesn't create a lot of hospitalizations. i think overall it will be at least a mild headwind to the later part of the holiday shopping season. >> at the end of the day, what does it mean for the labor force? >> in spite of the automation efforts, there's a massive shortage of workers in retail and hospitality. i don't think it is quite as

fast are as revolutionary as people like to think. it is still a tough labor market. the supply of labor is quite limited. we are losing workers more to the fact that they don't want to go back in the job market rather than because machines are taking their place. but it is certainly helpful for these companies to have more efficient distribution systems. it's a lot cheaper to send a truck around a neighborhood and deliver to 20 houses packages than to have massive inventory in the store and sales at every station. there is a lot of efficiency gain in this more remote shopping world. taylor: talk about the health of the consumer. you mentioned the labor shortage, with the lack of stimulus checks, we thought we would see a bigger reentry into the workforce and with the stimulus checks, for that

perfect consumer. how are you thinking about that? >> first of all, remember what has happened in the labor market. we have had a pretty big recovery, but we are not fully recovered. people were at least worried about getting covid, they are already at work. the remaining group, those on the sidelines, unsure whether come back or not, those are people who are very risk averse. they just keep hearing negative news about people not getting vaccinated, not wearing masks, the new variants of the virus. so it is hard to get them to reengage and it is hard to get them back because they don't have reliable childcare. it's fine that you reopen the school, but if you know there is a 20% chance your kid will be sent home because they were next to someone who tested positive, that is not adequate childcare for you. so it's going to take a while to work our way past this and get

more workers back into the market. and some of them are gone on a more permanent basis. caroline: not just in the u.s., but globally. were looking at china with covid cases picking up where they have a zero tolerance for covid. what does that mean from a supply chain perspective? when you look at ramifications from the new variant, or were to see further political pressure from that? >> while the new variant may reduce shopping, it could affect supply change just as much. so far it looks like we're getting the reopening of supply chains in asia, but we need to keep and i here. i am particularly worried about china in that regard, because china's vaccine probably is not as effective. they don't have natural immunity like we have and many other countries because they have a zero tolerance policy.

so they are more vulnerable. once you get into this thing of rocksolid lockdowns using perhaps a mediocre vaccine, it is hard to get out of that system. one of the saving graces of the united states is that the people who are concerned about covid and had the vaccine have gotten a booster. the people who are not concerned -- it's going to be a big challenge, particularly in china. >> i wonder what it means for the recovery of the consumer? >> the consumer is going to be in good shape going forward. as you are focusing on retail sales, people have not been able to spend at normal levels in the last year and a half, but there

were people who got stimulus money and were fully employed and frankly did not need it. there were a lot of families that got money that did needed. what you have had now is this massive polyp liquidity sitting in bank accounts, middle and upper income americans with about -- money that could not spend in the last year and a half. cancel vacation trip money, that money is sitting there burning a hole in their pockets. they haven't redeployed it into the markets. it's just sitting in the bank. so it is a really good backstop for the consumer going forward, and particularly for goods spending. if you nervous about omicron, then you just shift to buying goods.

the sector that is clogging supply chains and so on does not look like it is going to go away soon. caroline: thank you so much for your global expertise. coming up, more perspective on how the retail sector has changed. our guest has 1000 retail locations worldwide. this is bloomberg. ♪

taylor: as we all know, we are

diving into bloomberg's the big take. things quickly started looking up. caroline: ethan harris of bank of america was telling us people now have money in their bank accounts. people are counting on the resilience of the consumer. in the united states. in march 2020, sales took an absolute nosedive. we are currently seeing double digit growth compared to the year before. 20/20 was a dyer ear to compare it to but now month after month were seeing 16% once again for the previous week in terms of how much people are willing to spend in the stores. is quite sensational how much people are going to put that money to work now.

taylor: the president and ceo of uspa global licensing has more than 1000 stores across 90 countries. michael has also had leadership roles in companies like nike. you bring a wide range of experience here. talk about some of the challenges, namely with some of these inventory levels this holiday season. what is the feeling? >> first of all, thanks for having me. we have a $2 billion global footprint across 194 countries worldwide. we have 1200 of our own retail stores and 35 international digital websites throughout the world. we've had a really good year. online sales have been good. stores have been better because stores have been open more this year than they were in 2020.

i do see some challenges ahead. people have saved up money, but there is a real inflation risk coming out us. as you get into 2022 and 2023, it's only going to get worse. if you think about a normal family is now paying an extra $150 a month in gas plus groceries, that is a real hit to the bottom line of a lot of houses that are lower middle income families. if you are wealthy, that is one thing, but most of the world is not. therefore i think we have to be very thoughtful about what is coming the next 18-24 months with inflation. >> can you double down and draw what other risks there are two spending? >> when i look back to the supply chain challenge, i just checked in with our teams globally before this call. what we are seeing in the united

states with backed up shipping, lack of truck drivers, factories being close because they don't have workers or enough energy to run the factories, cotton prices are creeping up. all that is real and is not just a u.s. phenomenon. it is a global phenomenon. the supply chain does not reset itself in a matter of a few months. if there are supply chain today, that will impact spring 2023 as well. you're looking at mid to late 2023 with some of these challenges. most people around the world have a certain budget they have to spend. when you're dealing with 20-30% inflation, that hits the bottom line for working families. caroline: the u.s. polo association website showing where you are from the footprint of your stores.

i know you have stores in china and you can speak for the consumer there, but what about where you are making the product, and what about the supply chain inflation pressure on your goods? >> about 20% of our global production is from china. they've had issues in china with factories closing and with workers and energy challenges but that is consistent around the world. it's going to be a real challenge. it is china's challenge but actually all over the world. taylor: are you shifting away from china, we've heard bangladesh, vietnam and singapore, you name it. >> we have a certain level of exposure we are comfortable with. we have a lot of production out

of eastern europe, india, turkey. we are comfortable with that diversification. that will prove itself out well as we think about the next 12-24 months. >> i'm wondering about the brand itself. when you look at the changing preferences of the next generation, how much does it matter to you to stay relevant? >> that is a fantastic question. what i will say about jen now for and the young millennials, they look at brands differently than i did are my parents did. they look for authenticity, sustainability, causes that are legitimate. they look for philanthropic causes. they are more critical about who they shop with and who their friends are. they can turn quicker than gen x or the baby boomer generation.

it's consistent throughout our markets. taylor: we appreciate the concise answers and direct insight into the business and the world of retail. we will be back in a moment. we will dissect everything we've talked about today. this is bloomberg. ♪

>> were going to look back at the last two years and call this the great retail pivot. >> shoppers are going into the store, they see what they want to buy, and then they go home and buy it online.

or they go online and see what they want to buy and then go into the store. so the basket is much bigger than it has been in the past. >> at some point we should be 20 minutes or less. we have products close to the consumer. let's find a way to deliver that product faster. >> neckties and sport coats and tech sedo's, people have adopted a lifestyle that is reflective of what they wear and in many ways it is an outdoor lifestyle. >> it's about 6%-7% higher when it comes to shopping online since 2019. however, as soon as they are able to get back into the stores, they want to buy. caroline: just a few of the

great highlights from the voices we heard today. taylor: and? is it? enough to save the industry that's the irony of all that. caroline: this is bloomberg.

caroline: talk to us about what you're seeing. take us more forward-looking. are we going to work out at home more? >> that's actually the advantage that beach body has. we have never been a direct competitor with the gym. we rely on our ability to influence 150 million people in north america specifically who are overweight or obese and haven't made that choice yet. our job is to influence them with great content.

>> from the heart of for innovation, money, and power collide, this is bloomberg technology, with emily chang. emily: i'm emily in san francisco. covid tests hard to come by as cases rise. now president biden is preparing to send half a billion free covid to american homes, starting next