Shopify’s no-good, horrible, very-bad year only got worse after the company announced it was laying off 10% of its workforce, sending shares cratering by ~13%.

What happened: A thousand employees across recruiting, support, and sales will be affected as Shopify backpedals on its optimism around the growth of e-commerce beyond the pandemic. In an internal memo by CEO Tobi Lutke, he wrote the bet “didn’t pay off.”

Why it’s happening: E-commerce platforms did gangbusters during the pandemic, but now in-person shopping is enjoying a slow revival. Online retail sales are down 23.5% in May compared to the same time last year, per the most recent Statistics Canada data.

• Shopify has spent big to spur growth this year, including undertaking a 10-for-1 stock split, acquiring fulfilment company Deliverr, and introducing 100+ new products—but shares are still down ~80% from all-time highs. 

Why it matters: Shopify’s job cuts are so far the largest to hit the Canadian tech space (followed by layoffs at Wealthsimple affecting ~160 employees) as the sector continues to battle a pullback in e-commerce spending, rising interest rates, and supply-chain shortages.  

What’s next: Shopify will release its quarterly earnings later today. Tune in, here again, to see how that shakes out. The early predictions: Not terrible, but certainly not great.

How much would the cost of your favourite soap need to rise for you to kick its lavender-scent and moisturizing properties to the curb? Unilever’s about to find out. 

What happened: The company increased prices across its 400 brands, from Dove soap to Hellmann’s mayonnaise, by 11%, as executives try to battle an “unprecedented cost landscape” without losing customers to cheaper alternatives, per the Financial Times.  

• That may seem like a steep price hike, but Unilever’s not passing on all of its own cost increases to customers, as the company expects margins to fall this year.

It’s hard to say whether shoppers will tolerate price hikes. Unilever warned that supermarkets’ generic brands are starting to take market share in Europe and the US, and in Canada, Loblaws recorded record profits stemming from discount offerings like No Frills. 

• To beat back discount competitors, Unilever is investing heavily into its brands and advertising to maintain loyalty. “Our ability to navigate these conditions is almost entirely dependent on the strength of our brands,” said the company’s CEO.

Impacts are split: Earlier this year, Scotiabank’s Patricia Baker told The Peak that when Canadians look to cut spending, they’re not looking at their favourite household products but categories in which “trading down” is easier, like grocery. Unilever owns brands in both. 

• When it comes to consumer brands (think personal care, cleaning products), “theoretically, there is a falling-off point,” said Patricia, but demand for the category remains strong since white label products can’t offer the same attributes. 

What it matters: Because retail giants are so dialled into consumer demand, their actions can indicate how the economy is faring. For now, rising costs mean making tough decisions between name brands—although some would take Chapman’s over Ben & Jerry’s, anyway.

Chart accompanying Tobias Lütke’s note to employees 

Quote: “We bet that the share of dollars that travel through e-commerce rather than physical retail would permanently leap ahead by five or even ten years. We couldn’t know for sure at the time, but we knew that if there was a chance that this was true, we would have to expand the company to match. It’s now clear that bet didn’t pay off. What we see now is the mix reverting to roughly where pre-Covid data would have suggested it should be at this point.”

Tobias Lütke, CEO of Shopify, announcing a 10% reduction in the company’s workforce yesterday in a note to employees. 

This week, we turn our eyes up north to a lovely red-and-green property in Whitehorse, Yukon that promises the best views in town.

The house has an elegant yet rustic interior that matches the surrounding outdoorsy beauty (just take a look at that cabinetry) with an emphasis on modern comfort. The crown jewel of the property is a second-floor solarium that’s bathed in light from sunup till sundown and leads out to a back deck with a breathtaking mountain view.     

If you feel like some permanent northern exposure would do you some good, view the listing and snatch it up before someone else does.  

The Kardashians aren’t happy about Meta’s moves to make Facebook and Instagram more like TikTok, but not even their clout is powerful enough to stop the pivot to video.

What happened: Kylie Jenner and Kim Kardashian (the second and sixth most-followed users on Instagram) reposted a petition to ‘Make Instagram Instagram Again,’ arguing that the platform should return to its photo-focused roots and “stop trying to be TikTok.”  

• The celeb sisters join a chorus of users that are PO’ed about the TikTok-style Reels page, which incorporates videos from across the platform (and not just people you follow). 

Instagram head Adam Mosseri responded to the critique yesterday, saying–essentially– tough luck, because the platform is changing and “more and more of Instagram is going to become videos over time.” 

Why it’s happening: The people have spoken, and they want video. TikTok is crushing Facebook and Instagram’s user engagement numbers, with users spending 26 hours per month on TikTok versus eight on Instagram. 

• That level of engagement means major ad bucks for social platforms, and TikTok is reaping the rewards with ad revenue expected to triple this year. 

But it’s not good news for IG influencers like the Kardashians, who have built brands (and business empires) that are now at risk of being supplanted by amateur creators who will get boosted into people’s feeds by an algorithm. 

Bottom line: If you just want to look at photos of your friends, maybe get a group chat going because social media is moving full steam ahead towards the algorithm era—where engagement and ad dollars are plentiful.

🏠 7%. Share of Canadian households occupied by multiple generations, more than one family, or a family with unrelated individuals—an increase of 45% over the last two decades.

🏢 59.8%. Share of condos built in Ontario between 2016-2020 that belong to people who don’t live in them—that number sits at 100%(!) in the cities of Woodstock and Norfolk. 

🌭 $150. The cost for 45kg of yellow mustard seeds (which has tripled since July 2021) as droughts in the Canadian Prairies (home of global mustard seed growth) decimated last year’s yields.