The news: The outlook is bleak for Carvana and Bed Bath & Beyond, both of which are inching closer to bankruptcy as worsening economic conditions and a series of missteps take their toll.
Carvana tanks: While the online used car dealer’s business boomed during the early pandemic thanks to a confluence of factors—increased auto demand, a chip shortage that significantly reduced new car production, the shift to ecommerce amid COVID-19 restrictions—it now faces serious headwinds as soaring interest rates and inflation deflate demand.
Bed Bath & Beyond struggles: Under former CEO Mark Tritton, Bed Bath & Beyond switched from being a retailer that stocked mainly national brands to one that focused on private labels—a move that may have helped margins but turned off shoppers who could no longer find their favorite brands.
The big takeaway: While the precarious situations of Bed Bath & Beyond and Carvana can be attributed to specific decisions each company made—like Carvana’s acquisition of used car auction website Adesa for $2.2 billion just as sales began slowing, or Bed Bath & Beyond’s decision to move forward with its private brands without building out a supply chain first—they also speak to how quickly consumer behavior has changed over the past year, and how ill-equipped many companies were to handle the shift.
This article originally appeared in Insider Intelligence's Retail & Ecommerce Briefing—a daily recap of top stories reshaping the retail industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.
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