Rising costs, economic uncertainty, and shifting priorities are reshaping how both shoppers and companies are approaching the holiday season. In today’s edition, we share the latest local economic insights from the Federal Reserve Bank of St. Louis, examine Anthem’s decision to nix plans to limit anesthesia coverage in Missouri, highlight a local startup accelerator, and more.
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St. Louis shoppers are saving their Benjamins this holiday season. DmyTo / iSock / Getty Images Plus
DEEP DIVE
St. Louis Fed: Retail spending falls below expectations
It’s the season of giving—and buying. But businesses are seeing customers pull back.
As the holiday season kicks off and shoppers start their searches for the perfect gifts, regional retailers report that spending is down. That’s according to the Federal Reserve Bank of St. Louis, which this week published its latest Beige Book analyzing economic conditions in the district covering Missouri, Arkansas, Indiana, Kentucky, Mississippi, Tennessee, and parts of Illinois.
The Fed says overall consumer spending has slightly declined since its last report on October 4, with retail spending on small items falling short of expectations. “Consumers seem to be more cautious and less willing to spend discretionary funds,” the report says.
Prices continue to jump. A St. Louis manufacturer reports higher costs of inputs and raw materials, while a local service provider notes that the cost increases are causing some projects to run over budget.
A Missouri-based retailer says that while materials costs have increased, it cannot pass those added costs onto consumers.
Commercial real estate activity is softening. The sector’s main challenges are policy uncertainty, interest rate levels, volatility, and elevated insurance costs.
Why It Matters: This is a crucial time of year for many small businesses, as well as the local economy. At the same time, the holiday slowdown seems to be a symptom of the broader economic struggles felt this year.
What’s Next: The Fed says its contacts expect conditions to “slightly improve” during the next year. In the meantime, uncertainty regarding potential new federal policies is restraining investment, and companies are increasing inventories to brace for potential import tariffs.
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Anthem walks back plan to limit coverage of anesthesia in Missouri (stltoday): After widespread and vociferous criticism of its plan to force Missouri patients to pay out of pocket for anesthesia if a procedure exceeds designated time limits, Anthem says it will not change its policy after all. The plan, which could have affected Anthem’s approximately 2.1 million customers in Missouri, was set to go into effect February 1.
Build-A-Bear eyeing stores in Europe and Mexico, reports record third quarter (stltoday): CEO Sharon Price John told investors Thursday that the St. Louis-based company, which has a presence in nearly two dozen countries, is eyeing more international openings in the coming years. Build-A-Bear reported third-quarter revenues of $119 million, which is up 11 percent.
Kitty Ratcliffe lands seat on St. Louis Airport Commission (SLBJ): St. Louis Mayor Tishaura Jones appointed Ratcliffe, the former president of Explore St. Louis, to the commission before Thanksgiving. Ratcliffe’s term runs through November 2028, and her first meeting with the group is set for January.
Renovations on deck for Terminal 2’s baggage claim (SLBJ): Southwest Airlines will fully finance and fund a project to expand its baggage claim area at St. Louis Lambert International Airport by approximately 5,000 square feet. The project does not include plans for a third baggage carousel.
Trump taps former Missouri Congressman Billy Long to lead IRS (STLPR): Long has worked as a business and tax advisor since leaving Congress in 2022. That last year in office, Long tweeted, “I coined the phrase TrumpTrain in 2015. I recognized the once in a lifetime phenomenon that is Donald J. Trump early on. He does it on 3 hours sleep a night. He's the Energizer Bunny and I'm the EnergizerTurtle. I move slow but I never quit moving.”
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Watercooler
ENTERTAINMENT
City Foundry STL should be getting an escape room in 2025. The St. Louis Board of Adjustment yesterday signed off on interior alterations to allow the construction. The Escape Game, a 10-year-old Tennessee company with locations around the U.S., says it will offer five games on site, including its new Cosmic Crisis.
“Our goal is really to be in more locations. We still believe there is a lot more runway for us. We are in over 20 countries now, but there are plenty more opportunities around the globe.”
— Build-A-Bear CFO Voin Todorovic on the company's plans for future growth.
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