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  • Apple is set to open its first retail store in Mumbai as it bets big on India | CNN Business

    Apple is set to open its first retail store in Mumbai as it bets big on India | CNN Business

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    Hong Kong
    CNN
     — 

    Apple is finally getting ready to open its first physical store in the country as it bets on India as a market and manufacturing base.

    The company teased the opening of its retail outlet in a brief statement Wednesday, saying it was preparing to greet customers in the financial and commercial hub of Mumbai. Its previous plan to open a store in the country in 2021 was derailed by the coronavirus pandemic.

    The company released a photograph of its new boarded-up storefront, located at Jio World Drive Mall, a property owned by Reliance Industries, the conglomerate of Indian tycoon Mukesh Ambani.

    “Hello Mumbai,” the statement said.

    A notice outside the store said it would be “arriving soon.” Apple

    (AAPL)
    did not immediately respond to a request for further details, such as the opening date.

    The launch would come more than 20 years since the California-based giant first entered the Indian market through third-party resellers.

    For years, Apple and other foreign retailers were restricted from setting up shop in the country unless they sourced at least 30% of raw materials locally, forcing them to rely on local partners. That changed in 2019, when the Indian government relaxed some investment rules.

    In 2020, the company launched an online store in India, allowing customers to buy its products and also, for the first time, customize certain devices.

    CEO Tim Cook has previously pointed to the importance of starting its own retail network in the country, saying, “I don’t want somebody else to run the brand for us.”

    More recently, the company has been ramping up manufacturing in India.

    It increased its exports from the country significantly last year, with the number of iPhones made and shipped from India rising 65% in 2022 compared to the previous year, according to Counterpoint Research.

    Apple first began making iPhones there in 2017. But in recent months, it has expanded production after suffering severe supply chain snags in mainland China, which accounts for the bulk of its smartphone manufacturing.

    Two of Apple’s top contract manufacturers, Foxconn and Wistron, were the fastest-growing manufacturers in India during the last quarter of 2022, according to Counterpoint.

    Last month, Foxconn CEO Young Liu spent a week in the country and met Prime Minister Narendra Modi.

    The southern state of Karnataka said Foxconn had announced a major deal during Liu’s visit and that 300 acres of land had been allocated for a facility.

    According to a report from Bloomberg citing unnamed sources, the Taiwanese company plans to invest about $700 million on a new plant in the state capital of Bengaluru to make iPhone parts.

    An Indian government minister said in January that Apple was hoping to boost its output in India to a quarter of its overall total from somewhere between 5% and 7%. Apple did not respond to a request for comment at the time.

    As a market for iPhones, however, India still has a long way to go.

    Apple leads sales of premium smartphones in India, with the iPhone 13 ranking as the country’s overall bestseller in the segment last year, according to Counterpoint.

    But the company lags behind other brands in the overall market, which is led by Xiaomi and Samsung

    (SSNLF)
    , the research firm said.

    Apple accounted for just 1% of India’s smartphone market in 2019, and may notch more than 5% this year, Prachir Singh, a Counterpoint senior analyst, added.

    He said its market share could grow as it opens its own stores in the country, particularly as Mumbai is the second largest Indian market for Apple after Delhi.

    “Apple will be able to control the end-to-end user experience, and this will further take its brand image one level up,” Singh said.

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  • Price hikes are double whammy for pet owners who are crushed by inflation | CNN Business

    Price hikes are double whammy for pet owners who are crushed by inflation | CNN Business

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    Minneapolis
    CNN
     — 

    As head of PAWS Atlanta, Joe Labriola can get a good sense of the region’s economic well-being from the day-to-day activity of the city’s oldest no-kill animal shelter.

    Through the course of the past year, it’s become increasingly clear to him that people in the area are struggling under the weight of inflation and economic uncertainty.

    Practically the entirety of the daily call volume consists of requests to rehome pets. The shelter’s “surrender queue” is full, awaiting adoptions to free up space in the main shelter. And the shelves at PAWS Atlanta’s Pet Food Pantry quickly go bare.

    But perhaps the most heartbreaking indicator is something this particular shelter never had to track before 2022. Last year, 166 pets were found abandoned at the shelter’s front gate.

    “A number of animals are being abandoned that have serious medical issues,” Labriola told CNN. “The only thing we can guess is that people just can’t afford those expenses, and they’re hoping by dropping off [their pets] at our facility that we’re going to be able to pick up the slack. And we do as best we can, but it’s really putting a strain on our resources.”

    Overall inflation remains high across the United States, but has slowly and methodically stepped down since setting a fresh 40-year record of 9.1% in June 2022, as measured by the Consumer Price Index. However, during the past eight months, inflation in pet-related products and services has only worsened, rising in some cases to record-setting levels.

    In February, when annual CPI declined to 6%, the catch-all “pets, pet products and services” index rose to 10.9%, veterinary services jumped nearly 2 percentage points to 10.3% and pet food increased to 15.2%, according to Bureau of Labor Statistics data.

    Those price increases are a double whammy for pet owners whose household finances have been weakened by persistently high inflation and for those who fear for rising instances of “economic euthanasia,” when animals are humanely put to death for financial reasons.

    The recent pet-specific price spikes also are compounding pressures facing organizations tasked with providing a safety net for animals in need.

    Nationwide, shelters are not seeing increases in pets being surrendered, said Kitty Block, chief executive officer and president of the Humane Society of the United States. However, when there are certain communities seeing spikes in abandoned or surrendered pets, that’s a sign of broader societal hardship, she said.

    “When people are having to surrender their animals for economic reasons or because they’re in the middle of a horrible disaster or war zone area, that’s a people problem; this is not some issue that is not relevant to people,” Block said. “This is bigger than dogs or cats in shelters. It’s about the people who love them.”

    At the store level, many pet products saw double-digit average unit price increases during the past year, with several items — including pet food, non-clumping cat litter and bird grooming items — seeing year-over-year price hikes north of 20%, according to Nielsen IQ data for the 52-week period ended January 28, 2023.

    “Throughout 2022, price increases were pretty extensive — all the way up to 20% and almost 30% price hikes versus the year prior — across the pet department,” said Andrea Binder, vice president of NielsenIQ North America. “In early 2023, we have started to see those start to taper off a little bit. Prices are still increasing but at a lower rate than they were in 2022.”

    The price hikes have been attributed to rising input and ingredient costs, she added.

    “The cost of chicken, the cost of beef, the cost of aluminum to make a wet cat food can … a lot of those commodity prices have been rising pretty dramatically throughout 2021 and 2022, which has caused manufacturers to increase their costs, and then therefore a lot of retailers follow suit,” she said.

    Linda Harding's dogs, Lola and Phoebe.

    Pet products, services and food have become “exponentially” more expensive, said Linda Harding, who lives in San Diego with two dogs. She said her pet food costs for Lola, her Australian Shepherd mix, and for Phoebe, her Golden Retriever, have doubled to $250 per month.

    Harding has cut back on her own expenses. She hasn’t turned on the heat much all winter, she’s limited electricity use and she has stopped buying items like clothes and eggs.

    “When you take on a pet, you take on a big responsibility,” she said. “It’s almost like when you buy a car, you’re going to have a lot of responsibility with that car. That car is going to break down, that car’s going to need repairs. It’s an investment.”

    She added: “And they’re our furbabies. We love them to pieces. So it’s not really even a question. I need to find the money to keep them as healthy as possible so we can love them as long as possible.”

    Mary Avila, a disabled veteran who lives on a fixed income, keeps things simple.

    She doesn’t go clothes shopping anymore, she buys cheaper cuts of meat, and she does try to sock away money in case her pets need a small medical procedure.

    “They always give,” said Avila, who lives in Bakersfield, California, with her cat, Jack, and two dogs, Domino and Squirt. “The cat doesn’t give as much, because cats. But the dogs, they always give, they’re always happy, they always want you around. They always are there for you.”

    Patricia Kelvin of Poland, Ohio, said her Social Security benefits and pension can only go so far, so when the cost of utilities, food or trash collection go up, she has to cut back.

    But not for her cat, Jesse.

    Patricia Kelvin's cat, Jesse.

    “If he had some major medical concern, there are a lot of things I would give up so he would get care,” she said. “There’s just no question in my mind. If my diet was going to be more beans than something else, I wouldn’t hesitate. If I had to sell my sterling silver, which I’ve had for 60 years, that would go before my little ‘Whiskers’ would be deprived.”

    The Animal Rescue League of Iowa is the largest nonprofit rescue organization in the Hawkeye State and adopted out 8,400 dogs, cats and small farm animals throughout last year.

    As pet support services manager, Josh Fiala’s role at ARL is to help keep animals out of the shelter by offering programs — such as a pet food pantry, vaccine clinics, veterinary assistance and crisis care — to help keep pets with their people.

    “We definitely, without question, have seen a dramatic increase in pretty much every one of those services,” he said, noting that the pet food pantry in particular has seen spikes in demand.

    Josh Fiala, Animal Rescue League of Iowa's Pet Support Services Manager, helps load pet food into a vehicle during a Pet Food Pantry in January 2022.

    ARL gave out about 40,000 pounds of pet food in both 2020 and 2021. Last year, it distributed 146,000 pounds of food.

    Waggle, a pet-dedicated crowdfunding platform for medical expenses and emergencies, has seen recent spikes in the volume of postings on its website — with some of the biggest increases coming from pet owners in rural communities and areas with high costs of living, said Steven Mornelli, chief executive officer and founder. Additionally, Waggle has also seen a 30% increase in posting for help with medical bills $250 and under, he told CNN.

    “We have taken that as a correlation with the stresses of inflation,” he said.

    In 2022, 4% more animals entered shelters than left, according to Shelter Animals Count, a national database of animal shelter statistics launched by some of the largest animal welfare organizations in the United States.

    That’s the largest gap seen in the past four years and is the result of fewer pets leaving shelters, not increases in surrenders, said Christa Chadwick, vice president of shelter services at the American Society for the Prevention of Cruelty to Animals.

    Adoption levels have remained essentially flat, but there has been a large decline in animals being transferred to other shelters because of staffing and driver shortages, she added.

    Joey, a shelter dog at Baypath Humane Society in Hopkinton, Massachusetts, on April 9, 2021.

    But she also highlighted the economic pressures affecting current and prospective pet owners.

    “It’s heartbreaking to know that there are situations where pet owners are being put in a position where they are making a decision about their pet, whether it’s to surrender that pet to an animal shelter or they have to make a decision about euthanasia because they can’t afford care, she said.

    “People tend to get angry at the pet owner when they [abandon or surrender their pet] but our experience has shown that when pet owners get to that point, it’s the only option they see available to them,” Chadwick. “And that’s real, and that’s hard for everybody involved, and that’s really hard for the animal who’s at the center of that.”

    Chadwick sees a role for shelters and other organizations to provide a safe and welcoming place for owners who may feel like they have no other option.

    Despite the broader economic challenges occurring within the US, PAWS Atlanta’s Labriola has had its share of feel-good success stories this year.

    PAWS Atlanta's staff members take care of pets during a public vaccine clinic on February 23.

    Donations have remained strong as has the volunteer program, he said. The low-cost public vaccination and spay and neuter clinics are sold out, indicating that people are taking advantage of inexpensive ways to care for their pets, he added.

    And just recently, the shelter’s focus of working with dogs who have been there for more than a year, or “long-term guests,” is starting to pay off, he said.

    “We’ve been able to place three long-termers into forever homes recently, freeing up space to rescue more homeless dogs,” he said.

    • Shelters, veterinarians and local rescue groups can serve as first points of contact.
    • The Humane Society of the United States’ website has a variety of resources for people facing financial challenges and need vet care, food, boarding, supplies and information to help keep pets with their families. The website has a list of national, state and local organizations.
    • Inquire if veterinarians accept Care Credit, ScratchPay or a similar service but be sure to carefully review the terms of repayment and how interest rates would be applied.
    • Ask if your veterinarian has a client-driven donation fund to help other clients in need; consider fundraising platforms such as Waggle and GoFundMe
    • Consider purchasing pet health insurance.

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  • Dollar Tree won’t sell eggs because they’re too expensive | CNN Business

    Dollar Tree won’t sell eggs because they’re too expensive | CNN Business

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    New York
    CNN
     — 

    Eggs have gotten too expensive for Dollar Tree.

    Dollar Tree

    (DLTR)
    , which sells most products for $1.25 and a small selection of items for $3 or $5, will stop selling eggs at stores because the company can’t make money offering them at flat prices.

    Egg prices have surged, fueled by short supply caused by the deadly avian flu, high production costs and egg producers increasing their own profits.

    Egg costs jumped 38% for producers annually in February and 55% for shoppers, although eggs are beginning to get cheaper. The average price for a dozen Grade A large eggs was $4.21 in February, according to data from the Bureau of Labor Statistics.

    Most retailers have raised egg prices on customers to adjust for higher costs, but Dollar Tree doesn’t have as much flexibility to raise prices.

    “Our primary price point at Dollar Tree is $1.25. The cost of eggs is currently very high,” said company spokesperson Randy Guiler. Dollar Tree, which has around 9,000 US stores, will bring back eggs when “costs are more in line with historical levels.”

    But that probably won’t be in time for a key egg-purchasing holiday, Easter, which is April 9 this year.

    Reuters first reported that Dollar Tree would stop selling eggs. Family Dollar, owned by Dollar Tree, will continue selling eggs.

    Shoppers on tight budgets have increasingly turned to dollar stores for food.

    Dollar Tree, Family Dollar and Dollar General, the largest of the three chains, have spread in recent years and added more food basics, although fresh and healthy options are limited. Dollar stores are the fastest-growing food retailers in America, according to a study by Tufts University released this year.

    Dollar Tree used to sell cartons of eight or six eggs for $1. In 2021, Dollar Tree announced it would raise prices to $1.25 because selling everything for $1 was squeezing business.

    Dollar Tree also made the decision to pull eggs because it has a lean staffing model in stores, said David D’Arezzo, a former executive at Dollar General and other retailers who now works as an industry consultant. Workers changing price tags every week on eggs to account for wild swings in the market would be an extra strain on store operations, he said.

    The chain caters to low and middle-income customers and it doesn’t want to offer eggs at sticker shock prices to hurt its price reputation with shoppers, D’Arezzo said.

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  • Camp toy store pleads for help after Silicon Valley Bank collapse | CNN Business

    Camp toy store pleads for help after Silicon Valley Bank collapse | CNN Business

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    New York
    CNN
     — 

    A toy company based in New York has gotten caught up in the collapse of Silicon Valley Bank and is pleading with customers for help keeping it afloat.

    Camp, a venture-backed retailer, sent an email to customers Friday announcing it was slashing prices and would use sales to help fund its continued operations after much of its money was tied up in the bank failure.

    “Unfortunately, we had most of our company’s cash assets at a bank which just collapsed. I’m sure you’ve heard the news,” co-founder Ben Kaufman said in an email to customers.

    He urged customers to use the code “BANKRUN” to save 40% off all merchandise, in an apparent nod to the run on the bank that may have helped bring down the Silicon Valley lender. Camp also said customers could pay full price, which it said would be appreciated.

    Kaufman said the company was “hopeful that this will be resolved soon.”

    CNN has not confirmed if Camp had funds with Silicon Valley Bank when the bank collapsed.

    Silicon Valley Bank was put under control of the US Federal Deposit Insurance Corporation on Friday, capping off a stunning 48 hour period during which fears of a liquidity crisis at the firm prompted some startups to weigh withdrawing funds.

    The sudden collapse of the Silicon Valley lender has pushed tech investors and startups to scramble to figure out their financial exposure to the bank, with founders worrying about getting their money out, making payroll and covering operating expenses.

    The rapidly unfolding fallout at Silicon Valley Bank comes at a challenging moment for startup and tech industries. Rising interest rates have eroded the easy access to capital that helped fuel soaring startup valuations and funded ambitious, money-losing projects.

    Kaufman, a former BuzzFeed executive, founded Camp in 2018. It has nine stores in California, Connecticut, Massachusetts, New York, New Jersey and Texas.

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  • This is the dynamic that could decide the 2024 GOP race | CNN Politics

    This is the dynamic that could decide the 2024 GOP race | CNN Politics

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    CNN
     — 

    The same fundamental dynamic that decided the 2016 Republican presidential primaries is already resurfacing as the 2024 contest takes shape.

    As in 2016, early polls of next year’s contest show the Republican electorate is again sharply dividing about former President Donald Trump along lines of education. In both state and national surveys measuring support for the next Republican nomination, Trump is consistently running much better among GOP voters without a college education than among those with a four-year or graduate college degree.

    Analysts have often described such an educational divide among primary voters as the wine track (centered on college-educated voters) and the beer track (revolving around those without degrees). Over the years, it’s been a much more consistent feature in Democratic than Republican presidential primaries. But the wine track/beer track divide emerged as the defining characteristic of the 2016 GOP race, when Trump’s extraordinary success at attracting Republicans without a college degree allowed him to overcome sustained resistance from the voters with one.

    Though the early 2024 polls have varied in whether they place Trump or Florida Gov. Ron DeSantis in the lead overall (with the latest round tilting mostly toward Trump), that same overriding pattern of educational polarization is appearing in virtually all of those surveys, a review of public and private polling data reveals.

    “Trump does seem to have a special ability to make this sort of populist appeal [to non-college voters] and also have a special ability to make college-educated conservatives start thinking about alternatives,” GOP pollster Chris Wilson said in an email. “I think we’ll continue to see a big education divide in his support in 2024.”

    The stark educational split in attitudes toward Trump frames the strategic challenge for his potential rivals in the 2024 race.

    On paper, none of the leading candidates other than DeSantis himself seems particularly well positioned to threaten Trump’s hold on the non-college Republicans who have long been the most receptive audience for his blustery and belligerent messaging. By contrast, most of the current and potential field – including former Governors Nikki Haley and Chris Christie; current Governors Chris Sununu of New Hampshire and Glenn Youngkin of Virginia; former Vice President Mike Pence; and Sen. Tim Scott – appear better suited to attract the white-collar Republicans who have always been the most skeptical of Trump.

    That could create a situation in which there’s too little competition to Trump for voters on the “beer track” and too many options splintering the voters resistant to him on the “wine track.” That was the dynamic that allowed Trump to capture the nomination in 2016 even though nearly two-thirds of college-educated Republicans opposed him through the primaries, according to exit polls, and he didn’t reach 50% of the total vote in any state until the race was essentially decided.

    While the political obstacles facing Trump look greater now than they were then, his best chance of winning in 2024 would likely come from consolidating the “beer track” to a greater extent than anyone else unifies the “wine track” – just as he did in 2016. In each of the past three contested GOP presidential primaries, the electorate have split almost exactly in half between voters with and without college degrees, analyses of the exit polls have found.

    “Right now, unless somebody cracks that code to get competitive with Trump there [among blue-collar Republican voters], it could fall into the old pattern which is the best scenario for him,” said long-time GOP strategist Mike Murphy, who directed the super PAC for Jeb Bush in the 2016 race.

    Jennifer Horn, the former GOP state chair in New Hampshire, added that while Trump’s ceiling is likely lower than in 2016, he could still win the nomination with only plurality support if no one unifies the majority more skeptical of him. “He isn’t going to need 50% to win,” cautioned Horn, a leading Republican critic of Trump.

    The wine track/beer track divide has been a consistent feature of Democratic presidential primary politics since 1968. Since then, a procession of brainy liberal candidates (think Eugene McCarthy in 1968, Gary Hart in 1984, Paul Tsongas in 1992 and Bill Bradley in 2000) have mobilized socially liberal college-educated voters against rivals who relied primarily on support from non-college educated White voters and racial minorities (Robert F. Kennedy, Walter Mondale, Bill Clinton and Al Gore in those same races). In the epic 2008 Democratic primary struggle, the basic divide persisted in slightly reconfigured form as Barack Obama attracted just enough white-collar White and Black voters to beat Hillary Clinton’s coalition of blue-collar Whites and Latinos. Joe Biden in 2020 was mostly a beer track candidate.

    Generally, over those years, the educational divide had not been as important in Republican primary races. More often GOP voters have divided among primary contenders along other lines, including ideology and religious affiliation. Both the 2008 and 2012 GOP races, for instance, followed similar lines in which a candidate who relied primarily on evangelical Christians and the most conservative voters (Mike Huckabee in 2008 and Rick Santorum in 2012) ultimately lost the nomination to another who attracted more support from non-evangelicals and a broader range of mainstream conservatives (John McCain and Mitt Romney).

    The conservative columnist Patrick J. Buchanan, in his long-shot 1992 and 1996 bids for the GOP nomination, pioneered a blue-collar conservatism centered on unwavering cultural conservatism and an economic nationalism revolving around hostility to foreign trade and immigration. Huckabee and even more so Santorum advanced those themes, clearing a path that Trump would later follow – with a much harsher edge than either.

    In 2008, there was no educational divide in the GOP race: McCain won exactly the same 43% among Republican voters with and without a college degree, according to a new analysis of the exit poll results by CNN polling director Jennifer Agiesta. But by 2012, Santorum’s blue-collar inroads meant Romney won the nomination with something closer to the Republican equivalent of a wine-track coalition: Of the 20 states that conducted exit polls that year, Romney won voters with at least a four-year college degree in 14, but he carried most non-college voters in just 10.

    Wilson, the GOP pollster, said that an educational divide also started appearing around that time in other GOP primaries for Senate, House and governor’s races more frequently though by no means universally.

    “This wasn’t always the driving demographic or ideological difference in primaries before Trump,” Wilson said. “Sometimes a candidate [who] was particularly strong in sounding populist themes would create this type of gap, but often a more traditional issue difference either on social issues or on issues like tax increase votes or support for Obamacare or something adjacent to it would be a stronger signal in a primary.”

    In 2016, Trump turned this traditional GOP axis on its head. He narrowed the big divisions that had decided the 2008 and 2012 races. He performed nearly as well among voters who identified as very conservative as he did among those who called themselves somewhat conservative or moderate, according to a cumulative analysis of all the 2016 exit polls conducted by ABC’s Gary Langer. Likewise, Trump performed only slightly better among voters who were not evangelicals than those who were, Langer’s analysis found.

    Instead, Trump split the GOP electorate along the wine-track/beer-track divide familiar from Democratic primary contests over the previous generation. According to Langer’s cumulation of the exit polls, Trump won fully 47% of GOP voters without a four-year college degree – an incredible performance in such a crowded field. Trump, in stark contrast, carried only 35% of Republican voters with at least a college-degree across the primaries overall. But the remainder of them dubious of him never settled on a single alternative. Sen. Ted Cruz, who proved Trump’s longest-lasting rival, captured only about one-fourth of the white-collar GOP voters, with the rest splitting primarily among Marco Rubio, John Kasich and Trump himself.

    In October 2015, I wrote that Trump’s emerging strength in the GOP nomination race could be explained in two sentences: “The blue-collar wing of the Republican primary electorate has consolidated around one candidate. The party’s white-collar wing remains fragmented.” That same basic equation held through the primaries and largely explained Trump’s victory. The question now is whether it could happen again.

    There’s no question that some of the same ingredients are present. Recent national polling by the non-partisan Public Religion Research Institute, according to detailed results shared with CNN, shows that Republicans without a college degree are more likely than those with advanced education to agree with such core Trump themes as the belief that discrimination against Whites is now as big a problem as bias against minorities; that society is growing too soft and feminine; and that the growing number of immigrants weakens American society.

    The educational divide is also appearing more regularly in other GOP primaries for offices such as senator or governor, especially in races where one candidate is running on a Trump-style platform, Republican strategists say. It is also reappearing in polls measuring GOP voters’ early preferences for 2024. Recent national polls by Quinnipiac University, Fox News Channel and Republican pollsters including Whit Ayres, Echelon Insights and Wilson have all found Trump still running very strongly among Republicans without a college degree, usually capturing more than two-fifths of them, according to detailed results provided by the pollsters. But those same surveys all show Trump struggling with college-educated Republican voters, usually drawing even less support among them than he did in 2016, often just one-fourth or less.

    Wilson, for instance, said that in his national survey of prospective 2024 GOP voters, Trump’s support falls from about half of those with a high school degree or less, to about one-third of those with some college experience, one-fourth of those with a four-year degree and only one-fifth of those with a graduate education. In a recent national NPR/PBS NewsHour/Marist poll, half of Republicans without a college degree said nominating Trump again would give the party the best chance of winning in 2024; two-thirds of the Republicans with degrees said the party would have a better chance with someone else.

    State polls are showing the same pattern. The latest University of New Hampshire survey showed Trump attracting about two-fifths of GOP voters there without a high school degree, about one-third of those with some college experience, and only one-sixth of those with a four-year or graduate degree. A recent LA Times/University of California (Berkeley) survey in that state produced very similar results. Trump also ran much better among Republicans without a degree than those with one in the latest OH Predictive Insights primary poll in Arizona, according to detailed results provided by the firm.

    Craig Robinson, the former GOP state party political director in Iowa, said he sees the same divergence in his daily interactions. “The people that I hang out with or have breakfast with on Saturday, it’s the more business, more educated guys, and they are like, ‘Hey, we just want to move on [from Trump],’” Robinson told me. “But if I go back home to rural Iowa, they are not like that. They are looking for the fighter; they are looking for the person that they think will stand up for them and that’s Trump by and large.”

    Republicans who believe Trump is more vulnerable than in 2016 largely point to one reason: the possibility that DeSantis could build a broader coalition of support than any of Trump’s rivals did then. In many of these early state and national polls, DeSantis leads Trump among college educated voters. And in the same polls, DeSantis is generally staying closer to Trump among non-college voters than anyone did in 2016. “DeSantis may be able to do some business there,” said Murphy, referring to the GOP’s blue-collar wing.

    When DeSantis spoke on Sunday at the Ronald Reagan presidential library about an hour northwest of Los Angeles, he smoothly displayed his potential to bridge the GOP’s educational divide. For the first part of his speech, he touted Florida’s economic success around small government principles – a message that could connect with white-collar GOP voters drawn to a Reaganite message of lower taxes and less regulation. In the speech’s later sections, DeSantis recounted his clashes with what he called “the woke mind virus” over everything from classroom instruction about race, gender and sexual orientation, to immigration and crime and his collisions with the Walt Disney Co. Those issues, which drew the biggest response from his audience, provide him a powerful calling card with GOP voters, especially those without degrees, drawn to Trump’s confrontational style, but worried he can’t win again.

    “There is a lot of energy in the party right now around these cultural issues,” said GOP consultant Alex Conant, who served as the communications director for Marco Rubio’s 2016 presidential campaign. “If you watch Fox prime time, they are not talking about tax cuts and balancing budgets. They talk about the same cultural issues that DeSantis is putting at the core of his campaign.”

    The risk to DeSantis is that by leaning so hard into cultural confrontation on so many fronts he could create a zero-sum dynamic in the race. That approach could allow him to cut into Trump’s blue-collar base, but ultimately repel some college educated primary voters, who view him as too closely replicating what they don’t like about Trump. (If DeSantis wins the nomination, that same dynamic could hurt him with some suburban voters otherwise drawn to his small government economic message.)

    That could leave room in the top tier of the GOP race for another candidate who offers a sunnier, less polarizing message aimed mostly at white-collar Republicans. “I think there is absolutely room for more than two candidates, especially two candidates who are both competing very hard for the Fox News audience,” Conant said. Almost anyone else who joins the race beyond Trump and DeSantis (assuming he announces later this year) may ultimately conclude that lane represents their best chance to win.

    In many ways, Trump looks more vulnerable than he did in the 2016 primary. But assembling a coalition across the GOP’s wine-track/beer-track divide that’s broad enough to beat him remains something of a Rubik’s Cube, and the countdown is starting for the field that’s assembling against him to solve it.

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  • Why UK supermarkets are rationing fruit and vegetables | CNN Business

    Why UK supermarkets are rationing fruit and vegetables | CNN Business

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    London
    CNN
     — 

    Major UK supermarkets have started rationing the sale of some staple fruits and salad vegetables, blaming poor weather that has depressed production in Spain and north Africa.

    Tesco

    (TSCDF)
    , the UK’s biggest supermarket, confirmed to CNN Wednesday that it had temporarily capped the number of packs of tomatoes, peppers and cucumbers to three per customer.

    Asda told CNN that it was temporarily limiting purchases of some items to three packs per customer. These include tomatoes, peppers, cucumbers and lettuce.

    “Like other supermarkets, we are experiencing sourcing challenges on some products that are grown in southern Spain and north Africa,” an Asda spokesperson said.

    Morrisons told CNN that it had imposed a cap of two packs per customer on tomatoes, peppers, cucumbers and lettuce. Aldi, a German discount grocery chain, announced Wednesday that it would also introduce a limit of three packs per person on peppers, cucumbers and tomatoes in its UK stores.

    Asda, Morrisons and Aldi are Britain’s third-, fourth- and fifth-biggest supermarket chains respectively, according to market share data from Kantar.

    Sainsbury’s

    (JSAIY)
    , the United Kingdom’s second-largest food retailer, told CNN it had no plans to ration the sale of fruit and vegetables.

    The rationing is another knock for British shoppers already grappling with record grocery price rises, which have inflamed the worst cost-of-living crisis in decades.

    In the four weeks to January 22, food price inflation hit 16.7%, according to Kantar. That’s its highest level since the data company started tracking the indicator in 2008.

    “The more we face shortages, the more it will drive food inflation,” Minette Batters, president of the National Farmers’ Union (NFU), which represents more than 46,000 farming and growing businesses, told the BBC Wednesday.

    A spokesperson for the UK’s Department for Environment, Food and Rural Affairs (Defra) said in a statement: “We understand public concerns around the supply of fresh vegetables. However, the UK has a highly resilient food supply chain and is well-equipped to deal with disruption.”

    So what explains the empty shelves?

    Asda and Morrisons pointed the finger at poor weather in key growing regions as the main driver of the shortages.

    Andrew Woods, a sub-editor at Mintec, a commodities data company, told CNN that hotter-than-average weather in Spain and Morocco last fall, combined with a cold snap over the past two weeks, had hit production.

    The tomato crop in southern Spain is 20% smaller than a year ago, he said.

    The poorer harvests are problematic for UK retailers, reliant as they are on imports to fill their stocks at this time of year.

    According to the British Retail Consortium (BRC), a trade group, UK supermarkets import 95% of their tomatoes and 90% of their lettuce in December, and typically import the same proportions in March.

    James Bailey, executive director of supermarket Waitrose, told LBC radio Monday that snow and hail in Spain, as well as hail in parts of north Africa, had “wip[ed] out a large proportion” of key crops.

    The high-end supermarket chain told CNN that it was “monitoring the situation” but had no plans to introduce rationing.

    “Give it about [two weeks] and the other growing seasons in other parts of the world will have caught up and we should be able to get that supply back in,” Bailey added.

    The BRC also says it expects the current disruption to last a few weeks before home-grown produce arrives to fill the gaps on UK store shelves.

    “Supermarkets are adept at managing supply chain issues and are working with farmers to ensure that customers are able to access a wide range of fresh produce,” Andrew Opie, the BRC’s director of food and sustainability, told CNN.

    High input costs have contributed to the shortages of fruit and vegetables, the NFU says, as well as reduced production across the farming sector more broadly.

    “Labor shortages and soaring energy prices are hitting the poultry industry, already reeling from avian influenza, as well as horticultural businesses and pig farms,” Batters said in a speech Tuesday.

    The price of natural gas — a key input for nitrogen-based fertilizers — shot up following Russia’s invasion of Ukraine last year. Though gas prices have fallen back in recent weeks, they are still triple their historical average, while fertilizer costs are up 169% since 2019, Batters noted.

    Empty fruit and vegetable shelves at an Asda store in London on February 21, 2023.

    According to the NFU, the production of tomatoes and cucumbers is expected to fall to the lowest levels since the union started keeping records in 1985, on the back of crippling input costs.

    Woods at Mintec said processing and storing vegetables, such as tomatoes, was “energy intensive.”

    Europe, too, has wrestled with many of the same problems in recent months.

    “Across Europe, supplies [of tomatoes] are reportedly tight, and growers continue to grapple with higher fertilizer, energy and labor costs,” Mintec said in a note.

    Yet, currently, there are few indications — in media reports or on social media — that retailers in other countries are rationing sales.

    But Defra said in its statement Wednesday that “similar disruption is also being seen in other countries,” and that it was helping UK growers by expanding a visa scheme for seasonal workers to fill labor gaps.

    UK supermarkets have not cited Brexit as a reason for the supply crunch. But the NFU and some campaign groups argue that it has worsened labor shortages.

    Direct subsidy payments to UK farmers from the European Union are being phased out, which has increased uncertainty for farmers, Batters said in her speech. The United Kingdom plans to fully implement its own subsidy scheme by 2024.

    — Julia Horowitz contributed reporting.

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  • Warren Buffett is missing out on this year’s market comeback | CNN Business

    Warren Buffett is missing out on this year’s market comeback | CNN Business

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    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here.


    New York
    CNN
     — 

    Warren Buffett is arguably the most legendary investor of all time. But the Oracle of Omaha has missed out on this year’s stock market rally. So far, at least.

    Shares of Buffett’s Berkshire Hathaway

    (BRKB)
    conglomerate, a company that owns businesses ranging from Geico and the Burlington Northern Santa Fe railroad to consumer brands like Dairy Queen, Duracell and Fruit of the Loom, are down slightly this year — lagging the market, as the S&P 500 is up 6%. (The Nasdaq has done even better, surging 12%.)

    Berkshire Hathaway also has a giant stock portfolio that Buffett helps run. Apple

    (AAPL)
    is now by far the top holding for Berkshire, which also has big stakes in Bank of America

    (BAC)
    , Chevron

    (CVX)
    , American Express

    (AXP)
    and Coca-Cola

    (KO)
    .

    So is Berkshire’s portfolio, dare we say it, a little too boring? After all, if you want exposure to the big blue chips he owns, you could just buy an S&P 500 index fund.

    Buffett, in fact, has promoted that idea to investors many times, arguing that most individual stock pickers will not be able to beat the market. The 92-year-old Buffett, who has a net worth of more than $100 billion according to Forbes, even said that he wants the trustee in charge of his will to put 90% of his wife’s inheritance in index funds.

    Still, investors pay extremely close attention to Buffett every time he speaks. So traders will be poring over every word in his annual shareholder letter, which will be released the morning of Saturday, February 25, along with Berkshire’s latest earnings report.

    Don’t expect any major surprises. Buffett will probably continue to extol the virtues of a long-term, patient approach to investing and give a bullish outlook for the US economy. And to his credit, that usually pays dividends: Berkshire stock was up 3% last year in a down market.

    But market watchers are looking to see what Buffett says about the current inflationary scourge that has had a big impact on consumers and investors. He has lived through a couple of bouts of high inflation, after all.

    “I would like to hear Buffett address what’s going on with interest rates and inflation up as much they are,” said Steve Check, president of Check Capital Management, an investment firm that owns Berkshire shares. “He talked a lot about how concerned he was in the 1970s and 1980s.”

    Buffett has made numerous comments about inflation over the past few decades. And he was particularly nervous during the late 1970s and early 1980s, when soaring oil prices created an inflationary shock that severely hurt the economy.

    “High rates of inflation create a tax on capital that makes much corporate investment unwise,” Buffett said in his 1980 shareholder letter to Berkshire investors. Buffett also described inflation as a gigantic parasitic “tapeworm” for businesses in 1981.

    Buffett may also need to address how top-heavy and concentrated his portfolio has become. Berkshire’s five largest holdings make up about 75% of the company’s stock investments.

    “The portfolio is significantly overweight [in] technology, energy, consumer staples, and financials relative to the S&P 500,” said Bill Stone, chief investment officer with The Glenview Trust Company, another Berkshire shareholder, in a report. Stone noted that Berkshire also has big stakes in Kraft Heinz

    (KHC)
    and oil company Occidental Petroleum

    (OXY)
    .

    Investors also want to hear more about what Buffett plans to do with Berkshire’s massive pile of cash. The company has more than $100 billion on its balance sheet. Are more acquisitions coming?

    Buffett has talked for the past few years about how he’s longing to do an “elephant-sized” deal with Berkshire’s cash. Its most recent big deal was last year’s purchase of insurer Alleghany for $11.6 billion.

    Still, the recent sluggish performance of Berkshire’s stock is unlikely to deter the faithful Buffett fans, many of whom are expected to make the annual pilgrimage to Omaha on May 6 for the company’s shareholder meeting.

    Berkshire vice chairman Charlie Munger will likely be on stage with Buffett. So will Greg Abel, the chairman and CEO of Berkshire Hathaway Energy who Buffett has handpicked to eventually succeed him as Berkshire Hathaway CEO.

    Buffett’s faith in the US economy is well founded. American consumers have proven to be remarkably resilient despite rampant inflation. The surprisingly strong retail sales gains for January is further proof of that.

    Investors will get several more clues about consumer spending this week when several top retailers report earnings.

    Dow components Walmart

    (WMT)
    and Home Depot

    (HD)
    are the highlights. Walmart

    (WMT)
    , which has a massive grocery business, should shed some light on how shoppers are coping with surging grocery prices.

    Walmart could still benefit from its reputation as a place for bargains, though. That could even attract more affluent shoppers looking to save a buck.

    “With inflation remaining elevated in the U.S., we expect Walmart to see continued trade-down benefits…particularly from higher-income customers,” said Arun Sundaram, an analyst at CFRA Research, in a report.

    And investors will be looking for clues about the health of the housing market when Home Depot reports. Placer.ai, a research firm that measures foot traffic at top retailers, said in a recent report that consumers are returning to Home Depot and rival Lowe’s at almost pre-pandemic levels — even despite the housing slowdown.

    One reason? Current homeowners may decide to spend more on renovations if they now plan to stick in their current house longer instead of looking to sell.

    “Although the hot home-buying market is cooling off…foot traffic remains close to pre-pandemic levels due to a shift towards projects aimed at sprucing up a current living space,” said Placer.ai’s Ezra Carmel in a report. “It appears that projects that enhance the prospect of staying in place also have the ability to drive visits.”

    Investors will be keeping close tabs on several other retailers set to report earnings this week, including TJX

    (TJX)
    — the owner of TJ Maxx, Marshalls and HomeGoods — as well as online retailers eBay

    (EBAY)
    , Etsy

    (ETSY)
    , Overstock

    (OSTK)
    , Wayfair

    (W)
    and China’s Alibaba

    (BABA)
    .

    The US government is also set to release personal spending figures for January on Friday, another data point that will give a glimpse of consumers’ financial health.

    Monday: US stock and bond markets closed for Presidents’ Day

    Tuesday: US existing home sales; Eurozone and UK PMI; earnings from Walmart, Home Depot, Medtronic

    (MDT)
    , Fluor

    (FLR)
    , Molson Coors

    (TAP)
    , Caesars Entertainment

    (CZR)
    , Diamondback Energy

    (FANG)
    , Chesapeake Energy

    (CHK)
    , Palo Alto Networks

    (PANW)
    , Coinbase, La-Z-Boy

    (LZB)
    and Hostess Brands

    (TWNK)

    Wednesday: Weekly crude oil inventories; earnings from Stellantis, Baidu

    (BIDU)
    , TJX, Garmin

    (GRMN)
    , Overstock, Wingstop

    (WING)
    , Nvidia

    (NVDA)
    , eBay, Etsy and Bumble

    Thursday: US weekly jobless claims; US Q4 GDP (second estimate); Eurozone inflation; Turkey interest rate decision; earnings from Alibaba, Netease

    (NTES)
    , Keurig Dr Pepper

    (KDP)
    , Wayfair, Newmont, Domino’s

    (DPZ)
    , Papa John’s

    (PZZA)
    , Yeti

    (YETI)
    , Nikola, CNN owner Warner Bros. Discovery, Block

    (SQ)
    , Booking Holdings

    (BKNG)
    , Live Nation

    (LYV)
    , Carvana

    (CVNA)
    , Intuit

    (INTU)
    and Beyond Meat

    (BYND)

    Friday: US personal income and spending; US PCE inflation figures; US new home sales; Japan inflation; Germany Q4 GDP; earnings from CIBC

    (CM)
    , Scripps

    (SSP)
    and Cinemark

    (CNK)

    Saturday: Berkshire Hathaway earnings and Warren Buffett annual shareholder letter

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  • The online shopping upstart that’s quietly become the number one app in the US | CNN Business

    The online shopping upstart that’s quietly become the number one app in the US | CNN Business

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    Hong Kong
    CNN
     — 

    A new online shopping platform linked to one of China’s top retailers has quickly become the most downloaded app in the United States, surpassing Amazon and Walmart. Now it’s looking to capitalize from an appearance on America’s biggest stage.

    Temu, a Boston-based online retailer that shares the same owner as Chinese social commerce giant Pinduoduo, made its Super Bowl debut on Sunday.

    Temu, which runs an online superstore for virtually everything — from home goods to apparel to electronics — unveiled a commercial during the game that encouraged consumers to “shop like a billionaire.”

    The pitch? You don’t have to be one.

    “Through the largest stage possible, we want to share with our consumers that they can shop with a sense of freedom because of the price we offer,” a Temu spokesperson told CNN in a statement.

    The 30-second spot shows the company’s proposition to users: Feel like you’re splurging by buying lots of stuff cheaply. A woman’s swimsuit on Temu costs just $6.50, while a pair of wireless earphones is priced at $8.50. An eyebrow trimmer costs 90 cents.

    These surprisingly low prices — by Western standards, at least — have drawn comparisons to Shein, the Chinese fast fashion upstart that also offers a wide selection of inexpensive clothing and home goods, and has made significant inroads into markets including the United States.

    Shein is considered one of Temu’s competitors, along with US-based discount retailer Wish and Alibaba’s AliExpress, according to Coresight Research.

    Temu, pronounced “tee-moo,” was launched last year by PDD, its US-listed parent company formerly known as Pinduoduo. The company officially changed its name just this month.

    PDD’s subsidiary Pinduoduo is one of China’s most popular e-commerce platforms with approximately 900 million users. It made its name with a group-buying business model, allowing people to save money by enlisting friends to buy the same item in bulk.

    On its website, Temu says it uses its parent company’s “vast and deep network … built over the years to offer a wide range of affordable quality products.”

    Since its rollout in September, the application has been downloaded 24 million times, racking up more than 11 million monthly active users, according to Sensor Tower.

    In the fourth quarter of last year, US app installations for Temu exceeded those for Amazon

    (AMZN)
    , Walmart

    (WMT)
    and Target

    (TGT)
    , according to Abe Yousef, a senior insights analyst at the analytics firm Sensor Tower.

    “Temu soared to the top of both US app store charts in November, where the app still holds the top position now,” he told CNN, referring to iOS and Android mobile app stores.

    Yousef said the company had been particularly successful at acquiring new users by offering extremely low prices and in-app flash deals, such as 89% off certain items.

    The firm is already eyeing new territory. This month, Temu said on Twitter that it plans to expand to Canada.

    Michael Felice, an associate partner at management consulting firm Kearney, said Temu stood out simply by selling products without high markups.

    “Temu might be exposing a white space in the market wherein brands have been producing at extreme low cost, and along the value chain there’s been so much bloated cost passed on for margin,” he told CNN.

    “That said, American consumers might not even be ready to accept some of these price points … There’s always the question, ‘is it too cheap to be good?’”

    Deborah Weinswig, CEO of Coresight Research, has cautioned that it may be too early to tell whether Temu will be able to maintain those extremely low prices, free shipping and other perks.

    “Temu aims to continue to experiment in marketing and offerings, which is possible thanks to its resource-rich parent company,” she wrote in a report.

    Its launch, she said, “comes at an opportune moment, as consumers search for value amid still-elevated inflation and a degree of economic uncertainty.”

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  • 1 dead, 3 injured in shooting at El Paso shopping mall | CNN

    1 dead, 3 injured in shooting at El Paso shopping mall | CNN

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    CNN
     — 

    Four people were shot Wednesday evening at the Cielo Vista Mall in El Paso, Texas, according to police. One person died, said Sgt. Robert Gomez.

    “We have one person in custody. We do believe there could be one outstanding. That’s why the extensive search of the mall is being done right now,” Gomez said.

    Police did not comment on a possible motive and did not provide details on the conditions of the three victims who were hospitalized.

    “It was chaotic. People did flee. They were scared,” said Gomez.

    Earlier, police asked people to avoid Cielo Vista Mall after getting reports that shots have been fired in the food court.

    “Mall scene is still active please avoid the area. Multiple agencies responding to the area,” EPPD said in a tweet Wednesday afternoon.

    The mall is adjacent to a Walmart where a mass shooting in 2019 killed 23 and left nearly two dozen more injured.

    Robert Gonzalez was in the mall and told CNN he “saw people running to the exit.”

    Videos taken by Gonzalez show several mall storefronts closed with their security gates down and police parked outside. He said he was able to make it safely to his car, where he was waiting to leave as he spoke with CNN.

    Gonzalez recalled the 2019 mass shooting, saying today’s experience “just brought back bad memories.”

    This is a developing story and will be updated.

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  • Bed Bath & Beyond was a retail pioneer. Here’s what went wrong | CNN Business

    Bed Bath & Beyond was a retail pioneer. Here’s what went wrong | CNN Business

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    New York
    CNN
     — 

    Bed Bath & Beyond, America’s quintessential home furnishings’ chain, is fighting to stay in business.

    The company has avoided a bankruptcy filing for now by completing a complex stock offering that will give it an immediate injection of $225 million in funds and a pledge for $800 million in the future to pay down its current debt load.

    Bed Bath & Beyond is also shrinking to save money. The company said it plans to close around 400 of its roughly 760 Bed Bath & Beyond stores. It will keep open its most profitable stores in key markets.

    The moves are a lifeline for Bed Bath & Beyond. They will give the company time to pursue a turnaround without a bankruptcy filing, which can be costly, out of its control and wind up in a liquidation.

    “They are essentially doing a reorganization outside of bankruptcy court,” said Daniel Gielchinsky, an attorney at DGIM Law specializing in bankruptcy. “Slow the cash burn is the name of the game for the next 6 to 12 months and allow the company to pivot into a profitable position.”

    It will be a complicated turnaround and the company’s future remains uncertain. If Bed Bath & Beyond comes up short in the current version of its turnaround plan, the likelihood of a liquidation increases.

    Here’s how Bed Bath & Beyond, once a retailer pioneer, veered to the edge of bankruptcy and where it turns next.

    Bed Bath & Beyond had been a crown jewel of the era of so-called “category killers”: chains that dominated a category of retail, such as Toys “R” Us, Circuit City and Sports Authority. Those companies, too, ultimately filed for bankruptcy.

    Bed Bath & Beyond became known for pots and pans, towels and bedding stacked from the floor to the ceilings at its cavernous stores — and for its ubiquitous 20%-off coupons. The blue-and-white coupons became something of a pop culture symbol, and millions of Americans wound up stashing them away in their cars, closets and basements.

    The retailer attracted a broad range of customers by selling name brands at cut-rate prices. Brands coveted a spot on Bed Bath & Beyond’s shelves, knowing it would lead to big sales. Plus, the open-store layout encouraged impulse buying: Shoppers would come in to buy new dishes and walk out with pillows, towels and other items.

    Stores were a fixture for shoppers around the winter holidays and during the back-to-school and college seasons, and Bed Bath & Beyond also had a strong baby and wedding registry business.

    Founded in 1971 by two veterans of discount retail in Springfield, New Jersey, the chain of small linen and bath stores — then called Bed ‘n Bath — first grew around the northeast and in California selling designer bedding, a new trend at the time. Unlike department stores, it didn’t rely on sales events to draw customers.

    “We had witnessed the department store shakeout and knew that specialty stores were going to be the next wave of retailing,” co-founder Leonard Feinstein reportedly said in 1993. “It was the beginning of the designer approach to linens and housewares and we saw a real window of opportunity.”

    In 1987, the company changed its name to Bed Bath & Beyond to reflect its expanded merchandise and bigger “superstores.” The company went public in 1992 with 38 stores and around $200 million in sales.

    By 2000, those figures leaped to 241 stores and $1.1 billion in sales. The 1,000th Bed Bath & Beyond store opened in 2009, when the chain had reached $7.8 billion in sales.

    The company was something of an iconoclast. It spent little on advertising, relying instead on print coupons distributed in weekly newspapers to attract customers.

    “Why not just tell the customer that we’ll give you a discount on the item you want — and not the one that we want to put on sale? We’ll mail a coupon, and it will be a lot cheaper,” Bed Bath & Beyond co-founder Warren Eisenberg, now 92, said in a 2020 New York Times interview.

    The chain was known for giving autonomy to store managers to decide which products to stock, allowing them to customize their individual stores, and for shipping products directly to stores instead of a central warehouse.

    But as brick-and-mortar began to give way to e-commerce, Bed Bath & Beyond was slow to make the transition — a misstep compounded by the fact that home decor is one of the most commonly bought categories online.

    “We missed the boat on the internet,” Eisenberg said in a recent Wall Street Journal interview.

    Online shopping weakened the allure of Bed Bath & Beyond’s fan-favorite coupons, too, because consumers could find plenty of cheaper alternatives on Amazon or browse a wider selection on sites like Wayfair

    (W)
    .

    It wasn’t just Amazon and online shopping that sank Bed Bath & Beyond, however.

    Bed Bath & Beyond's ubiquitous coupons lost some of their appeal.

    Walmart

    (WMT)
    , Target

    (TGT)
    and Costco

    (COST)
    have grown over the past decade, and they have been able to draw Bed Bath & Beyond customers with lower prices and a wider array of merchandise. Discount chains such as HomeGoods and TJ Maxx and have also undercut Bed Bath & Beyond’s prices.

    Without the differentiators of the lowest prices or widest selection, Bed Bath & Beyond’s sales stagnated from 2012 to 2019.

    The company was hit hard during the pandemic, closing stores temporarily during 2020 while rivals remained open. Sales sunk 17% in 2020 and 15% in 2021.

    What’s more, Bed Bath & Beyond has rotated through several different executives and turnaround strategies in recent years.

    Former Target executive Mark Tritton took the helm in 2019 with backing from investors and a bold new strategy. He scaled back coupons and inventory from national brands in favor of Bed Bath & Beyond’s own private-label brands.

    But this change alienated customers who were loyal to big brands. The company also fell behind on payments to vendors and stores did not have enough merchandise to stock shelves. Tritton left as CEO in 2022.

    As of late November the company had 949 stores, including 762 Bed Bath & Beyond stores and 137 buybuyBaby stores.

    It said Tuesday that it will ultimately have about half that number – 360 Bed Bath & Beyond stores and 120 buybuyBaby locations.

    Bed Bath & Beyond will close stores that drain the most cash out of its business.

    But the closures will mean Bed Bath & Beyond will give up on stores that brought in $1.2 billion in annual sales, Michael Lasser, an analyst at UBS, said in a note to clients Tuesday. Bed Bath & Beyond will recapture a portion of those sales from its other stores and online, Lasser said, but the majority will go to other retailers.

    But, to survive, the company needs to grow sales at its remaining stores. Otherwise, too much of Bed Bath & Beyond’s revenue will go toward repaying debt that it won’t be able to turn a profit.

    Reversing sales declines won’t be easy given challenges with waning customer demand, online traffic and rising competition in Bed Bath & Beyond product categories, Lasser said. Bed Bath & Beyond will have to overcome its significant hurdles to become a healthy, profitable company.

    Bankruptcy lawyer Daniel Gielchinsky, however, said it was an encouraging sign that Bed Bath & Beyond was able to raise enough cash through a public offering to stay afloat. The offering was reportedly backed by investment firm Hudson Bay Capital. (Hudson Bay did not respond to a CNN Business request for comment.)

    Still, liquidators will be watching closely, he said, eager to pounce.

    “They are assuredly waiting on the sidelines to dismantle the company at the ready.”

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  • Beyoncé is going on tour. Will Ticketmaster be able to handle it? | CNN Business

    Beyoncé is going on tour. Will Ticketmaster be able to handle it? | CNN Business

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    New York
    CNN
     — 

    Good news: Beyoncé’s Renaissance tour is happening. Bad news: Fans are already gearing up for a difficult time getting tickets, especially following Ticketmaster’s botched ticket rollout for Taylor Swift’s Eras tour.

    Beyoncé announced the tour — which had been previously rumored — on Wednesday. In an Instagram post, the superstar posted simply “RENAISSANCEㅤ ㅤWORLD TOUR 2023.” Her website shows tour dates from May to September. Beyoncé will perform in cities around the world, making several stops in the United States.

    Ticketmaster published a blog post on Wednesday with instructions on how to get tickets for the tour.

    People who want access to the North American leg of the tour have to be registered as Verified Fans, the post explained.

    “Demand for this tour is expected to be high,” the page said. “If there is more demand than there are tickets available, a lottery-style selection process will determine which registered Verified Fans get a unique access code and which are placed on the waitlist,” the company said, adding that the access code doesn’t guarantee a ticket.

    Fans have been eagerly awaiting news of the tour, but many are already bracing themselves for a Ticketmaster disaster, following the recent Swift ticket debacle.

    “Hey @Ticketmaster you better have you servers ready!!!” one person tweeted. “Don’t screw this up,” said another.

    The Swift concert drama started even before tickets officially went on sale. In mid-November, Ticketmaster’s site overloaded when fans tried to purchase pre-sale tickets for just a handful of dates. Demand was so high that Ticketmaster ultimately canceled the public sale of the tickets. Swift was furious, calling the debacle “excruciating for me.”

    Ticketmaster had to contend with more than just the ire of Swift and her fans. The fiasco prompted a US Senate Judiciary Committee hearing, designed to examine the lack of competition in the ticketing industry (and give senators an opportunity to quote their favorite T-Swift song lyrics.) The hearing gave members of the committee and others a chance to call out Ticketmaster’s power within the industry.

    Over a decade ago, the company merged with Live Nation, despite fears that the conglomerate would create a monopoly in the ticketing sector. In 2010, a court filing that raised objections to the merger said that Ticketmaster had over 80% share among major venues. Ticketmaster disputes that market share estimate, and says it holds at most just over 30% of the concert market, according to CFO Joe Berchtold, who spoke about the business on NPR.

    Today, it’s widely criticized for holding too much power in the sector — effectively barring fans and artists from buying or selling tickets through a competitor.

    Renaissance, which dropped this summer, has been widely acclaimed and was nominated for album of the year at the Grammys Feb. 5.

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  • Biden proposes ‘junk fee’ bill to cut hidden fees for credit cards and concert tickets | CNN Business

    Biden proposes ‘junk fee’ bill to cut hidden fees for credit cards and concert tickets | CNN Business

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    CNN
     — 

    President Joe Biden announced new progress Wednesday on his administration’s “competition agenda,” specifically taking aim at junk fees while calling on Congress to pass legislation targeting hidden fees across multiple industries.

    These costs can “drain hundreds of dollars a year from the pockets of hardworking American families, especially folks who are already struggling to make ends meet — but not anymore after today,” Biden said at the fourth meeting of the Presidential Competition Council on Wednesday.

    The proposed legislation in partnership with the Consumer Financial Protection Bureau, called the Junk Fee Protection Act, would target four types of excessive fees:

    • excessive online concert, sporting event and entertainment ticket fees
    • airline fees for families sitting together on flights
    • exorbitant early termination fees for TV, phone and internet services
    • surprise resort and destination fees

    In brief remarks before the meeting, Biden had called out credit card late fees in particular as “a junk fee if there ever was one,” saying the new guidance from the CFPB would reduce these fees.

    “Today’s rule proposes to cut those fees from $31 on average to $8,” he added. “That change is expected to save tens of millions of dollars for Americans, roughly $9 billion a year in total savings.”

    Biden called on Congress to pass the junk fee legislation, saying it would give “hardworking Americans just a little bit more breathing room.” It’s part of a plan, he added, to build “an economy that’s competitive and an economy that works for everyone.”

    Rohit Chopra, director of the CFPB, noted before the announcement that “over a decade ago, Congress banned excessive credit card late fees.”

    “But companies have exploited a regulatory loophole that has allowed them to escape scrutiny for charging an otherwise illegal junk fee,” he added in a statement to CNN. “Today’s proposed rule seeks to save families billions of dollars and ensure the credit card market is fair and competitive.”

    Another fee category that frustrates many customers is event tickets sold online, for which additional fees are frequently high — and typically appear late in the checkout process when a customer is about to make the purchase.

    For example, earlier this year, lawmakers grilled Live Nation president and CFO Joe Berchtold following a ticket sales debacle over exorbitant ticketing fees. Although the company said Wednesday it supports reform, it also said it opposes the proposed legislation.

    “We stand ready to work with the President and Congress on many common sense ticketing reforms, while also speaking out against proposed legislation that would benefit scalpers over artists and fans,” the company said in a statement.

    Biden’s Transportation Department also took steps last fall during the previous meeting of the Competition Council to reduce “unnecessary hidden fees,” from airline and travel sites that the the President warned were “weighing down family budgets.”

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  • Trader Joe’s asked customers to rank their nine top products. Here they are | CNN Business

    Trader Joe’s asked customers to rank their nine top products. Here they are | CNN Business

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    New York
    CNN
     — 

    Trader Joe’s asked its customers a simple question: If you were to spend the rest of your life on a deserted island, which nine Trader Joe’s products would you take with you?

    More than 18,000 customers responded to its 14th annual survey ranking the grocery store’s most popular items in nine different categories.

    There were some caveats this year: Gone from the running were five products that have won many times in the past (think Mandarin Orange Chicken and dark chocolate peanut butter cups), and instead are featured in its Product Hall of Fame.

    The first Trader Joe’s opened in Pasadena, California, in 1967. Its founder Joe Coulombe (yes, Joe was a real guy), was a convenience store owner who wanted to open a grocery chain to appeal to a niche market of well-educated, well-traveled consumers. The idea led him to create a cult-favorite grocery empire.

    Here are the products customers voted their favorites, in categories from cheese to entrees.

    Chili & Lime Flavored Rolled Tortilla Chips, spicy corn chips, swept the competition this year, taking home the top prize. Runners-up included the hash browns, chicken soup dumplings, Everything but the Bagel sesame seasoning blend, and chocolate croissants.

    See the all-time favorites included in Trader Joe’s Hall of Fame

    The chips also won in the poll’s favorite snack category. Customers were also fans of the Organic Elote Corn Chip Dippers, Organic Corn Chip Dippers, World’s Puffiest White Cheddar Corn Puffs and Crunchy Curls, which were all among the top vote-getters.

    The Sparkling Honeycrisp Apple Juice was the fans’ favorite beverage, though it is seasonal. The canned drink is a simple three-ingredient blend of apple juice, water and bubbles.

    Following is the Triple Ginger Brew, Sparkling Peach Black Tea with peach juice, Sparkling Cranberry & Ginger Beverage and the Non-Dairy Brown Sugar Oat Creamer.

    Trader Joe's Cheddar Cheese with Caramelized Onions

    Now that Hall of Famer Unexpected Cheddar is no longer an option in the poll, the store’s cheddar cheese with caramelized onions took home top accolades.

    See the full list of customer choice award winners

    Runners-up included Syrah Soaked Toscano, seasonal Baked Lemon Ricotta, Blueberry & Vanilla Chèvre and its various bries.

    Replacing the longtime Mandarin Orange Chicken is Trader Joe’s Butter Chicken – spiced chicken in a tomato and cream sauce with basmati rice.

    Indian is popular with Trader Joe’s customers. Second runner-up was Chicken Tikka Masala, followed by Kung Pao Chicken, Butternut Squash Mac & Cheese and BBQ Teriyaki Chicken.

    Seasonal candles won out in this category. Its seasonal scents include Peony Blossom, Cedar Balsam, Honeycrisp Apple and Vanilla Pumpkin.

    Runners-up: Daily Facial Sunscreen, Ultra-Moisturizing Hand Cream, Tea Tree Tingle Shampoo & Conditioner, and Shea Butter & Coconut Oil Hair Mask.

    Unsurprisingly, customers voted bananas as their top choice. The chain is known for its 25-cent organic bananas and 19-cent regular bananas. Following choices were Teeny Tiny Avocados, Honeycrisp Apples, Brussels Sprouts and Organic Carrots of Many Colors.

    The tiny and crunchy Hold the Cone! Mini Ice Cream Cones won top dessert, followed by Danish Kringle, Sublime Ice Cream Sandwiches, Chocolate Lava Cakes and Brookie.

    Trader Joe's Vegan Kale, Cashew & Basil Pesto spread onto a grilled Portabella mushroom burger, topped with roasted red peppers and fresh greens

    Among its many vegan and vegetarian options, the Vegan Kale, Cashew & Basil Pesto came out on top. Vegetable Fried Rice, Beefless Bulgogi, Palak Paneer, Cauliflower Gnocchi followed.

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  • Madison Square Garden CEO doubles down on use of facial recognition tech | CNN Business

    Madison Square Garden CEO doubles down on use of facial recognition tech | CNN Business

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    CNN
     — 

    The chief executive of the Madison Square Garden Entertainment Corporation has doubled down on using facial recognition at its venues to bar lawyers suing the group from attending events.

    Speaking to Fox 5 on Thursday, MSG Executive Chairman and CEO James Dolan said Madison Square Garden is a private company and therefore entitled to determine who is allowed to enter its venues for events.

    “At Madison Square Garden, if you’re suing us, we’re just asking of you – please don’t come until you’re done with your argument with us,” he said. “And yes, we’re using facial recognition to enforce that.”

    His comments come after New York Attorney General Letitia James on Wednesday sent a letter to MSG Entertainment requesting information regarding its use of facial recognition technology to prohibit legitimate ticketholders from entering venues. The letter said the attorney general’s office has reviewed reports MSG Entertainment has used facial recognition to identify and deny entry to multiple lawyers affiliated with law firms involved in ongoing litigation with the company. The letter indicates thousands of attorneys from around 90 law firms may have been impacted by the policy, and said the ban includes those holding season tickets.

    The attorney general’s letter raised the concern that banning individuals from accessing venues over ongoing litigation may violate local, state, and federal human rights laws, including laws prohibiting retaliation. The letter also questions whether the facial recognition software used by MSG Entertainment is reliable and what safeguards are in place to avoid bias and discrimination.

    In a press release, James said, “MSG Entertainment cannot fight their legal battles in their own arenas. Madison Square Garden and Radio City Music Hall are world-renowned venues and should treat all patrons who purchased tickets with fairness and respect. Anyone with a ticket to an event should not be concerned that they may be wrongfully denied entry based on their appearance, and we’re urging MSG Entertainment to reverse this policy.”

    MSG Entertainment owns and operates several venues in New York, including Madison Square Garden, Radio City Music Hall, the Hulu Theater, and the Beacon Theatre. Madison Square Garden is the home of the New York Knicks, Rangers, professional boxing, and college basketball teams.

    In a statement Thursday, an MSG spokesperson told CNN, “To be clear, our policy does not unlawfully prohibit anyone from entering our venues and it is not our intent to dissuade attorneys from representing plaintiffs in litigation against us. We are merely excluding a small percentage of lawyers only during active litigation.”

    “Most importantly,” the spokesperson added, “to even suggest anyone is being excluded based on the protected classes identified in state and federal civil rights laws is ludicrous. Our policy has never applied to attorneys representing plaintiffs who allege sexual harassment or employment discrimination.”

    In the Fox 5 interview Thursday, Dolan said when the attorneys suing MSG finish their litigation, they will be welcome back to the venues. “If your next door neighbor sues you, if somebody sues you, right, that’s confrontational. It’s adversarial and it’s fine, people are allowed to sue,” he said. “But at the same time, if you’re being sued, right, you don’t have to welcome the person into your home, right?”

    Dolan defended the use of facial recognition technology, saying it’s useful for security and noting that he believes Madison Square Garden to be one of the safest venues in the country. “Basically, anytime that you go out in public, you’re on camera,” he said. “Believe me, you walk down the street, you’re on camera, you’re on 10 cameras. What facial recognition does is looks at, you know, recognizes your face, and says you know, are you someone who’s on this list.”

    Dolan claimed the State Liquor Authority has threatened MSG’s license over its use of facial recognition technology. The New York State Liquor Authority told CNN it issued a “letter of advice” to MSG, after receiving a complaint in mid-November over attorneys engaged in litigation against the company not being allowed to enter its premises.

    “After receiving a complaint, the State Liquor Authority followed standard procedure and issued a Letter of Advice explaining this business’ obligation to keep their premises open to the public, as required by the Alcoholic Beverage Control Law,” Joshua Heller, a State Liquor Authority spokesperson, told CNN.

    The SLA told CNN an investigation into the matter is “ongoing”.

    During the Fox interview, Dolan apparently threatened to shut down sales of liquor during an unspecified upcoming New York Rangers game, and said he would direct any upset patrons to the liquor authority to complain.

    Dolan also pushed back at the suggestion that he’s being “too sensitive.”

    “The Garden has to defend itself,” Dolan said. “If you sue us, right, you know we’re going to tell you not to come.”

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  • How Google’s long period of online dominance could end | CNN Business

    How Google’s long period of online dominance could end | CNN Business

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    Washington
    CNN
     — 

    For the better part of 15 years, Google has seemed like an unstoppable force, powered by the strength of its online search engine and digital advertising business. But both now look increasingly vulnerable.

    This week, the Justice Department accused Google of running an illegal monopoly in its online advertising business and called for parts of it to be broken up. The case comes a couple of years after the Trump administration filed a similar suit going after the tech giant’s dominance in search.

    Google said the Justice Department is “doubling down on a flawed argument” and that the latest suit “attempts to pick winners and losers in the highly competitive advertising technology sector.” If successful, however, both blockbuster cases could upend a business model that’s made Google the most powerful advertising company on the internet. It would be the most consequential antitrust victory against a tech giant since the US government took on Microsoft more than 20 years ago.

    But even though the lawsuits drive at the heart of Google’s revenue machine, they could take years to play out. In the meantime, two other thorny issues are poised to determine Google’s future on a potentially shorter timeframe: The rise of generative artificial intelligence and what appears to be an accelerating decline in Google’s online ad marketshare.

    Just days before the DOJ suit, Google announced plans to cut 12,000 employees amid a dramatic slowdown in its revenue growth, and as it works to refocus its efforts partly around AI.

    Google has long been synonymous with online searches; it was one of the first modern tech companies whose name would become a verb. But a new threat emerged late last year when OpenAI, an artificial intelligence research company, publicly released a viral new AI chatbot tool called ChatGPT.

    Users of ChatGPT have showcased the bot’s ability to create poetry, draft legal documents, write code and explain complex ideas, with little more than a simple prompt. Trained on a vast amount of online data, ChatGPT can generate lengthy responses to open-ended questions, though it’s prone to some errors, or answer simple questions – “Who was the 25th president of the United States?” – which one might have previously had to scroll through search results on Google to find.

    ChatGPT is trained on vast amounts of data and uses this to generate responses to user prompts. While ChatGPT’s underlying technology has existed for some time, the fact that anyone can create an account and experiment with the tool has led to loads of hype for generative AI and made the technology’s potential instantly understandable to millions in a way that was only abstract before. It has also reportedly prompted Google’s management to declare a “code red” situation for its search business.

    “Google may be only a year or two away from total disruption. AI will eliminate the Search Engine Result Page, which is where they make most of their money,” Paul Buchheit, one of the creators of Gmail, tweeted last year. “Even if they catch up on AI, they can’t fully deploy it without destroying the most valuable part of their business!”

    If more users begin to rely on AI for their information needs, the argument goes, it could undercut Google’s search advertising, which is part of a $149 billion business segment at the company. Media coverage of ChatGPT has doubled down on this notion, with some outlets pitting ChatGPT against Google in head-to-head tests.

    There are some reasons to doubt this nightmare scenario might play out for Google.

    For one thing, Google operates at a vastly different scale. In November, Google’s website received more than 86 billion visits, compared to less than 300 million for ChatGPT, according to the traffic analysis website SimilarWeb. (ChatGPT was released publicly in late November.) For another, even in a world where Google provides specific, AI-generated responses to user queries, it could still analyze the queries to provide search advertising, just as it does today.

    Google has its own investments in highly sophisticated artificial intelligence. One of its AI-driven chat programs, LaMDA, even became a flashpoint last year after an engineer at the company claimed it had achieved sentience. (Google has disputed the claim and fired the engineer for breaches of company policy.)

    Google CEO Sundar Pichai has reportedly told employees that even though Google has similar capabilities to ChatGPT, the company has yet to commit to giving out AI-generated search responses because of the risk of providing inaccurate information, which could be detrimental to Google in the long run.

    Google’s stance highlights both its incredible influence, as the most trusted search engine on earth, and one of the core problems of generative AI: Due to the technology’s black-box design, it’s virtually impossible to find out how the technology arrived at a specific result. For many people, and for many years to come, being able to evaluate different sources of information for themselves may trump the convenience of receiving a single answer.

    All this has taken place against the backdrop of what seems to be an extended, multi-year decline in Google’s online advertising marketshare. Google’s position in digital advertising peaked in 2017 with 34.7% of the US market, according to third-party industry estimates, and is on pace to account for 28.8% this year.

    Google isn’t the only advertising giant to experience this trend. One-off factors like the pandemic and the war in Ukraine, as well as fears of a looming recession, have broadly affected the online advertising industry. Others, like Facebook-parent Meta, have been particularly susceptible to systemic changes such as Apple’s app privacy updates restricting the amount of information marketers can access about iOS users.

    But the decline also comes as Google faces new competition in the market. Rivals including Amazon, TikTok and even Apple have been attracting an increasing share of the digital advertising pie.

    Whatever the cause, Google’s advertising business, which is still massive, seems to face growing headwinds. And those headwinds could be exacerbated if some of the predictions about generative AI come to pass, or if the Justice Department’s lawsuits ultimately weaken Google’s grip on digital advertising.

    As part of the case, the US government has asked a federal court to unwind two acquisitions that allegedly helped cement a Google monopoly in advertising. Dismantling Google’s tightly integrated ads machine will restore competition and make it harder for Google to extract monopoly profits, according to the US government.

    This and other antitrust suits — though threatening in their own right — simply add pressure to the broader dilemma facing Google as it stares down a new era of potentially tumultuous technological change.

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  • Bed Bath & Beyond says it can no longer pay its debts | CNN Business

    Bed Bath & Beyond says it can no longer pay its debts | CNN Business

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    CNN
     — 

    The end could be near for struggling retailer Bed Bath & Beyond, as it warned in a regulatory filing Thursday that it received a notice of default from its lender, JPMorgan Chase. Shares of Bed Bath & Beyond (BBBY) plunged more than 20% on the news, to about $2.56 a share.

    The company said in its SEC filing Thursday that “at this time, the Company does not have sufficient resources to repay the amounts under the Credit Facilities and this will lead the Company to consider all strategic alternatives, including restructuring its debt under the U.S. Bankruptcy Code.”

    Bed Bath & Beyond defaulted “on or around” January 13, according to the Securities & Exchange Commission filing. As a result, creditors are demanding immediate payment.

    Bed Bath & Beyond could be forced to file for Chapter 11 bankruptcy reorganization due to its financial woes.

    The company added that it is also cutting costs, lowering capital expenditures and closing stores and distribution centers.

    Founded in 1971, Bed Bath & Beyond became a staple for affordable home decor, kitchenware and college dorm room furniture. The retailer became known for its ubiquitous 20% off blue coupons, and cavernous stores with merchandise stacked high to the ceilings.

    But the company struggled to make the transition to online shopping and fend off larger chains such as Walmart (WMT) and Target

    (TGT)
    (TGT). Many shoppers switched to those competitors as the novelty of Bed Bath & Beyond’s coupons faded – consumers can find plenty of cheaper alternatives on Amazon

    (AMZN)
    (AMZN) and other online sites.

    The company was also hit hard during the pandemic, closing stores temporarily during 2020 while rivals remained open. The company lost 17% of its sales in 2020 and 14% in 2021.

    Bed Bath & Beyond has rotated through several different executives and turnaround strategies in recent years, including former Target executive Mark Tritton, who left the company last year after less than three years as CEO.

    As of February 2022, Bed Bath & Beyond had 950 stores and 32,000 workers. The company also owns chidren’s retailer buybuy Baby.

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  • Ticketmaster gets grilled: 6 takeaways from hearing over Taylor Swift concert fiasco | CNN Business

    Ticketmaster gets grilled: 6 takeaways from hearing over Taylor Swift concert fiasco | CNN Business

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    CNN
     — 

    Lawmakers grilled a top executive of Ticketmaster’s parent company, Live Nation Entertainment, on Tuesday after the service’s inability to process orders for Taylor Swift’s upcoming tour left millions of people unable to buy tickets late last year.

    During the three-hour hearing, senators pressed Live Nation president and CFO Joe Berchtold and some other witnesses on whether his company was too dominant in the industry, thereby harming rivals, musicians and fans.

    “I want to congratulate and thank you for an absolutely stunning achievement,” Sen. Richard Blumenthal said to Berthtold. “You have brought together Republicans and Democrats in an absolutely unified cause.”

    Here’s a look at the big takeaways from the hearing:

    When tickets for Swift’s new five-month Eras Tour went on sale on Ticketmaster in mid November, heavy demand snarled the ticketing site, infuriating fans who couldn’t snag tickets. Unable to resolve the problems, Ticketmaster subsequently canceled Swift’s concert ticket sales to the general public, citing “extraordinarily high demands on ticketing systems and insufficient remaining ticket inventory to meet that demand.”

    In his testimony Tuesday, Berchtold partly blamed the Swift ticketing incident on the bots.

    Ticketmaster, he said, was “hit with three times the amount of bot traffic than we had ever experienced” amid the “unprecedented demand for Taylor Swift tickets.” The bot activity “required us to slow down and even pause our sales. This is what led to a terrible consumer experience that we deeply regret.”

    Berchtold also went on defense more broadly about his company. He emphasized that Ticketmaster does not set ticket prices, does not determine the number of tickets put up for sale and that “in most cases, venues set service and ticketing fees,” not Ticketmaster.

    He also rejected suggestions that its dominance has allowed for soaring fees, citing data from the market intelligence firm Pollstar showing that Live Nation controls about 200 out of approximately 4,000 venues in the United States, or about 5%.

    The venues controlled by Live Nation set fees that are “consistent with the other venues in the marketplace,” he said.

    Members of the entertainment industry and one rival spoke out against Ticketmaster’s dominance in the industry.

    Jack Groetzinger, CEO of SeatGeek, alleged that many venue owners “fear losing Live Nation concerts if they don’t use Ticketmaster” and its services, and argued the company must be broken up.

    “Live Nation controls the most popular entertainers in the world, routes most of the large tours, operates the ticketing systems and even owns many of the venues,” he told lawmakers. “This power over the entire live entertainment industry allows Live Nation to maintain its monopolistic influence over the primary ticketing market.”

    He continued: “As long as Live Nation remains both the dominant concert promoter and ticketer of major venues in the US, the industry will continue to lack competition and struggle,” he said.

    Bandmate Jordan Cohen, right, listens as singer-songwriter Clyde Lawrence, left, testifies before a Senate Judiciary Committee hearing to examine promoting competition and protecting consumers in live entertainment.

    Clyde Lawrence, a singer-songwriter on the witness panel, explained how the company acts as a promoter, a venue and the ticketing company, which eats into performing artists’ revenues. Artists, he said, have no leverage over Live Nation.

    “Since both our pay and theirs is a share of the show’s profits, we should be true partners aligned in our incentives — keep costs low while ensuring the best fan experience,” he said. “But with Live Nation not only acting as the promoter but also the owner and operator of the venue, it seriously complicates these incentives.”

    Lawrence also said with Ticketmaster, “we’ll see a 40%-ish or closer to 50% fee added on top” of the base ticket price.

    The fallout from the ticketing fiasco once again cast a harsh spotlight on Ticketmaster and its power in the industry, more than a decade after it completed its merger with Live Nation despite concerns the deal would create a near monopoly in the ticketing sector.

    “To have a strong capitalist system, you have to have competition,” Sen. Amy Klobuchar, a Democrat from Minnesota, said during her opening remarks. “You can’t have too much consolidation — something that, unfortunately for this country, as an ode to Taylor Swift, I will say, we know ‘all too well.’”

    Kathleen Bradish, vice president for legal advocacy at the American Antitrust Institute, called Ticketmaster “a very traditional monopoly” and told lawmakers the lack of competition in the live entertainment industry results in consumers having to pay higher prices.

    “Its dominance in markets up and down the live entertainment supply chain creates the incentive and the ability to limit competition and protect its market position,” she explained. “Customers pay the price for these monopolistic acts with higher ticket prices and fees, lower quality, less choice and less innovation.”

    On the concert side, the company excludes “smaller or independent concert promoters and venues. In digital ticketing, it includes excluding ticket resellers and brokers who provide important competition via the secondary ticketing market,” she said.

    Lawmakers repeatedly questioned the US government’s past handling of the Live Nation merger with Ticketmaster. It involved a legally binding consent agreement that allowed the company to merge with Ticketmaster so long as the combined company abided by a number of behavioral conditions.

    A 2019 Justice Department review found that Live Nation was not meeting its commitments under the order, but instead of suing, the Department modified the agreement and extended it for another five years, according to Bradish at the American Antitrust Institute.

    “DOJ should pursue new enforcement action to obtain effective structural relief,” said Bradish, calling for a breakup of Live Nation under either Section 7 of the Clayton Act or Section 2 of the Sherman Act.

    A Senate Judiciary Committee hearing on Tuesday examined promoting competition and protecting consumers in live entertainment on Capitol Hill

    Sen. Mike Lee said the way that history has unfolded since the Live Nation merger raises “very serious doubts” about the usefulness of consent agreements imposed by the federal government.

    If the current Justice Department concludes that the consent decree has been violated, “unwinding the merger ought to be on the table,” Blumenthal said.

    In response to Berchtold’s explanation about the bot problem, some lawmakers questioned the company’s security practices, noting many small businesses can determine when bad actors are infiltrating their systems.

    Republican Senator Marsha Blackburn suggested Berchtold strengthen its cyberprotections, get better advice and hire new IT workers to better protect its systems. (Berchtold said the company has poured billions of dollars into security to protect its systems over the years.)

    Another Republican, Sen. John Kennedy, went further in criticizing the company over the Swift ticketing issue. He said whoever at Live Nation was in charge of the incident “ought to be fired.”

    In the back half of the hearing, some of the focus shifted to possible solutions – but there were no easy answers.

    Some lawmakers focused on the ability to resell tickets. While this option can be useful for customers who need to change plans, it can also help prop up the scalping market.

    When senators discussed whether restricting the ability to transfer tickets would help, Live Nation’s exec was in favor of it. But the SeatGeek CEO said this might only entrench Live Nation’s dominance, as it holds the kind of market share that would force consumers to solely transact there in the absence of other resale market options.

    – CNN’s Brian Fung and Aditi Sangal contributed to this report

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  • DOJ sues Google over its dominance in online advertising market | CNN Business

    DOJ sues Google over its dominance in online advertising market | CNN Business

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    CNN
     — 

    The Justice Department and eight states sued Google on Tuesday, accusing the company of harming competition with its dominance in the online advertising market and calling for it to be broken up.

    The move marks the Biden administration’s first blockbuster antitrust case against a Big Tech company. The eight states joining the suit include California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee and Virginia.

    The fresh complaint significantly escalates the risks to Google emanating from Washington, where lawmakers and regulators have frequently raised concerns about the tech giant’s power but have so far failed to pass new legislation or regulations that might rein in the company or its peers.

    For years, Google’s critics have claimed that the company’s extensive role in the ecosystem that enables advertisers to place ads, and for publishers to offer up digital ad space, represents a conflict of interest that Google has exploited anticompetitively.

    In Tuesday’s complaint, a copy of which was viewed by CNN, the Justice Department alleged that Google actively and illegally maintained that dominance by engaging in a campaign to thwart competition. Google gobbled up rivals through anticompetitive mergers, the US government said, and bullied publishers and advertisers into using the company’s proprietary ad technology products.

    As part of the lawsuit, the US government called for Google to be broken up and for the court to order the company to spin off at least its online advertising exchange and its ad server for publishers, if not more.

    Google, the US government alleged, “has corrupted legitimate competition in the ad tech industry by engaging in a systematic campaign to seize control of the wide swath of high-tech tools used by publishers, advertisers, and brokers, to facilitate digital advertising. Having inserted itself into all aspects of the digital advertising marketplace, Google has used anticompetitive, exclusionary, and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies.”

    The suit was filed in the US District Court for the Eastern District of Virginia.

    Tuesday’s suit marks the federal government’s second antitrust complaint against Google since 2020, when the Trump administration sued over Google’s alleged anticompetitive harms in search and search advertising. That case is still ongoing. Google has also been the target of antitrust litigation by state and private actors.

    In a statement, Google said the DOJ suit “attempts to pick winners and losers in the highly competitive advertising technology sector.”

    “DOJ is doubling down on a flawed argument that would slow innovation, raise advertising fees, and make it harder for thousands of small businesses and publishers to grow,” a Google spokesperson said, adding that a federal judge last year knocked down a claim that Google colluded with Facebook in a separate antitrust suit led by the state of Texas. That judge also ruled, however, that a number of monopolization claims in the Texas case could move forward.

    The lawsuit is a frontal assault against Google’s massive, primary business of advertising. Google generated $209 billion in advertising revenue in 2021, according to its annual report, a figure representing more than 80% of its total revenue. By comparison, the next largest giant in online advertising, Facebook-parent Meta, generated $115 billion in 2021.

    Third-party estimates suggest that Google and Facebook accounted for the majority of US digital ad revenues, hitting a peak around 2017, with Google taking about a third of the market. Since then, however, others including Amazon have begun encroaching on that business.

    The US complaint echoes concerns that have prompted similar antitrust investigations in the United Kingdom and in the European Union.

    Google not only controls the platform publishers use to sell online ad inventory, the Justice Department alleged Tuesday, but also the advertising tools marketers use to claim that inventory and the exchange that facilitates those transactions.

    “Google’s pervasive power over the entire ad tech industry has been questioned by its own digital advertising executives,” the complaint said, “at least one of whom aptly begged the question: ‘[I]s there a deeper issue with us owning the platform, the exchange, and a huge network? The analogy would be if Goldman or Citibank owned the NYSE.’”

    Tuesday’s complaint marks an opening salvo against Big Tech by DOJ’s antitrust chief, Jonathan Kanter. Kanter has spent months laying the groundwork for a broader offensive against the tech industry’s most dominant companies, reflecting commitments by President Joe Biden and others in the US government to hold powerful firms accountable. Under Kanter, Justice Department antitrust officials have pushed to bring more cases to trial as well as to prosecute cases involving unconventional legal theories.

    In 2020, House lawmakers released a 450-page report finding that Google, along with Amazon, Apple and Facebook, hold “monopoly power” in key business segments. The report was the result of a 16-month investigation in which congressional staff reviewed corporate documents and interviewed the tech industry’s many customers and rivals. It concluded, among other things, that Google was uniquely positioned to benefit from its powerful role in the online ad industry.

    “With a sizable share in the ad exchange market and the ad intermediary market, and as a leading supplier of ad space, Google simultaneously acts on behalf of publishers and advertisers, while also trading for itself,” the report said.

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  • Abandoned shopping carts cost taxpayers thousands of dollars | CNN Business

    Abandoned shopping carts cost taxpayers thousands of dollars | CNN Business

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    New York
    CNN
     — 

    Santa Fe, New Mexico, paid a local contractor $47,000 to round up about 3,000 shopping carts around the city in 2021 and 2022.

    Fayetteville, North Carolina, spent $78,468 collecting carts from May 2020 to October 2022.

    Shopping carts keep wandering away from their stores, draining taxpayers’ coffers, causing blight and frustrating local officials and retailers.

    Abandoned shopping carts are a scourge to neighborhoods, as wayward carts block intersections, sidewalks and bus stops. They occupy handicap spots in parking lots and wind up in creeks, ditches and parks. And they clog municipal drainage and waste systems and cause accidents.

    There is no national data on shopping cart losses, but US retailers lose an estimated tens of millions of dollars every year replacing lost and damaged carts, say shopping cart experts. They pay vendors to rescue stray carts and fork over fines to municipalities for violating laws on shopping carts. They also miss out on sales if there aren’t enough carts for customers during peak shopping hours.

    Last year, Walmart paid $23,000 in fines related to abandoned shopping carts to the small town of Dartmouth, Massachusetts, said Shawn McDonald, a member of the town’s Select Board.

    Dartmouth public workers spent two years corralling more than 100 Walmart carts scattered around town and housed them in one of the city’s storage facilities. When Walmart applied for a new building permit, the company was told it had to pay the town thousands of dollars in daily storage fees, McDonald said.

    “It’s a safety issue with these carts careening down the hill. I had one that was left in the road as I was driving,” he said. “I got to the point where I got pissed.”

    More municipalities around the country are proposing laws cracking down on stray carts. They are imposing fines on retailers for abandoned carts and fees for retrieval services, as well as mandates for stores to lock up their carts or install systems to contain them. Some localities are also fining people who remove carts from stores.

    The city council in Ogden, Utah, this month approved an ordinance fining people who take store carts or are in possession of one. The measure also authorizes the city to charge retailers a fee of $2 a day for storage and handling fees to retrieve lost carts.

    “Abandoned shopping carts have become an increasing nuisance on public and private properties throughout the city,” the council said in its summary of the bill. City officials “are spending considerable amounts of time to pick up and return or dispose of the carts.”

    Matthew Dodson, the president of Retail Marketing Services, which offers cart retrieval, maintenance and other services to leading retailers in several western states, said lost shopping carts is a growing problem.

    During the busy 2022 holiday season, Retail Marketing Service leased extra carts to retailers, and got back 91% of its approximately 2,000 carts, down from 96% the prior year.

    Dodson and others in the shopping cart industry say the rise in lost carts can be attributed to several factors, including unhoused people using them to hold their belongings or as shelter. Homelessness has been rising in many major cities due to skyrocketing housing prices, lack of affordable housing, and other factors. There have also been incidents of people stealing carts for scrap metal.

    Some people, especially in cities, also use supermarket carts to bring their groceries home from the store. Other carts drift away from parking lots if they aren’t locked up during rough weather or at night.

    To be sure, the problem of wayward shopping carts is not new. They began leaving stores soon after they were introduced in the late 1930s.

    “A new menace is threatening the safety of motorists in stores,” the New York Times warned in a 1962 article. “It is the shopping cart.” Another New York Times article in 1957 called the trend “Cart-Napping.”

    There’s even a book, “The Stray Shopping Carts of Eastern North America: A Guide to Field Identification,” dedicated to the phenomenon and a system of identification for stray shopping carts, much like guides for bird-watching.

    Edward Tenner, a distinguished scholar in the Smithsonian’s Lemelson Center for the Study of Invention and Innovation, said the misuse of everyday items like shopping carts is an example of “deviant ingenuity.”

    It’s similar to talapia fishermen in Malaysia stealing payphones in the 1990s and attaching the receivers to powerful batteries that emitted a sound to lure fish, he said.

    Tenner hypothesized that people take shopping carts from stores because they are extremely versatile and aren’t available elsewhere: “There’s really no legitimate way for an individual to buy a supermarket-grade shopping cart.”

    Supermarkets can have 200 to 300 shopping carts per store, while big-box chains carry up to 800. Depending on the size and model, carts cost up to $250, said Alex Poulos, a sales director at R.W. Rogers Company, which supplies carts and other equipment to stores.

    Stores and cart makers over the years have increased the size of carts to encourage shoppers to buy more items.

    Stores have introduced several cart safety and theft-prevention measures over the years, such as cart corrals and, more recently, wheels that automatically lock if a cart strays too far from the store. (Viral videos on TikTok show Target customers struggling to push around carts with wheeled locks.)

    Gatekeeper Systems, which offers shopping cart control measures for the country’s largest retailers, said demand for its “SmartWheel” radio-frequency locks has increased during the pandemic.

    At four stores, Wegmans is using Gatekeeper’s wheel locks.

    “The cost of replacing carts as well as the cost of locating and returning missing carts to the store led to our decision to implement the technology,” a Wegmans spokesperson said.

    Aldi, the German grocery chain that’s rapidly expanding in the United States, is one of the few US retailers to require customers to deposit a quarter to unlock a cart.

    Coin-lock shopping cart systems are popular in Europe, and Poulos said more US companies are requesting coin-lock systems in response to the costs of runaway shopping carts.

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  • Walgreens removes online purchasing limits for children’s fever medications | CNN

    Walgreens removes online purchasing limits for children’s fever medications | CNN

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    CNN
     — 

    After weeks of high demand that stretched supply, Walgreens removed its online purchasing limits for children’s pain- and fever-reducing medications on Monday morning, spokesperson Zoe Krey told CNN.

    Walgreens only had limits in place on medicines purchased online. It did not have limits on medication purchased in stores.

    “So currently, we have no purchase limits either in-store or online,” Krey said.

    The change comes after high demand for children’s pain and fever medications led some stores, including CVS and Rite Aid, to limit purchases. A brutal respiratory virus season fueled the sales of kids’ medications to treat pain and fever to 65% higher than what was typical the year before.

    CVS on Monday told CNN there is currently a two product limit on all children’s pain relief products at its stores and online. A spokesperson for the chain said the limits were in place “to ensure equitable access for all our customers,” and said CVS was working with its suppliers to ensure continued access to the items.

    CNN has also reached out to Rite Aid for comment.

    Last month, the Consumer Healthcare Products Association, which represents makers of over-the-counter medicines, said manufacturers were running 24/7 to supply more medications to stores, but there was no timeline for when supply could catch up to demand.

    Since then, flu and RSV activity have peaked in the US, according to data from the US Centers for Disease Control and Prevention. Covid-19 cases are still on the rise.

    Still, flu and other respiratory virus activity remains “high” or “very high” in about half of states, according to CDC data updated Friday, and the US continues to contend with multiple respiratory viruses that are circulating at high levels.

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