This week, more than 1,000 entrepreneurs, business executives and government officials are in Hyderabad India to discuss ways to empower people to start businesses and build networks. The focus of the 8th annual Global Entrepreneurship Summit is women, who still lag behind men when it comes to founding businesses and getting funding. Michelle Quinn reports from Hyderabad.
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U.S. ethanol producers, looking to relieve a growing domestic glut, are hunting for new international fuel markets to replace China and Brazil after trade disputes slashed exports to those top buyers.
Without new markets, U.S. producers may have to pare output after spending hundreds of millions of dollars on biofuel production plants in recent years. Currently, the most promising potential destinations for U.S. fuel exports appear to be Mexico and India, industry executives said.
China and Brazil accounted for 41 percent of the 1.17 billion gallons the United States exported last year. Shipments to the two shriveled in September, making U.S. exports for that month the smallest in more than a year.
“There are only so many times you can replace your top market,” said Tom Sleight, president of the U.S. Grains Council, which officials said has been calling on potential buyers in Kenya, Ghana and Nigeria.
China’s demand plummeted by more than 100 million gallons this year after it removed a preferential tariff rate. Brazil’s imports tumbled after it put a quota on imports in September to protect its domestic producers.
Selling points
To drum up new customers, Illinois-based ethanol producer Marquis Energy has sent executives to India, China, Thailand and the Philippines, promoting the corn-based fuel additive as a smog- and oil-import fighter.
“I’ve had a lot of people over there almost nonstop over the last three months,” the company’s chief executive, Mark Marquis, said of the hunt for buyers in Asia. Archer Daniels Midland Co and Flint Hills Resources also have stepped up efforts to sell into Mexico, traders said.
U.S. ethanol prices have slid to nearly a two-year low as daily domestic production last week hit a record 45.1 million gallons, making the search for new export markets more urgent.
Output this year could reach about 16 billion gallons, nearly triple that of 2007.
U.S. exports fell since hitting 2.5 million gallons per day in the first eight months this year. Shipments to Brazil sank to 19 million gallons in September, the smallest monthly volume in more than a year. Exports to China through September were just 60,880 gallons, a precipitous drop from 198 million gallons a year earlier, according to U.S. Department of Agriculture data.
The marketing effort could pay off in Mexico, whose energy regulatory commission (CRE) is to vote soon to ease the flow of fuel imports through state-run Pemex facilities to several Mexican states bordering the United States.
If approved, significant new volumes of gasoline blended with 10 percent ethanol could begin flowing in 2018 into Chihuahua, Coahuila, Nuevo Leon and Tamaulipas states, CRE Commissioner Luis Guillermo Pineda told Reuters.
“The largest supplier is logically the United States, but it can be from anywhere,” Pineda said of the ethanol blend.
Import prediction
Ray Young, ADM’s finance chief, last month told analysts Mexico could be importing 200 million gallons annually by 2019.
U.S. ethanol exports to Mexico last year totaled about 30 million gallons.
U.S. inventories reached 920 million gallons in the week ended November 17, up 16 percent from a year earlier, the U.S. Energy Information Administration said. Ethanol futures have fallen to $1.36 per gallon on the Chicago Board of Trade, down 20 percent from their 2017 high in April.
U.S. producers are pitching China and India on ethanol’s smog-fighting potential. This month, United Airlines canceled flights to India’s capital, New Delhi, citing heavy smog as a public health emergency. China ordered Beijing and more than two dozen other cities to start meeting limits on airborne pollution starting this month.
Ted McKinney, a USDA official interviewed during a biofuel-promotion trip to India, expressed optimism that country could import much more U.S. ethanol for cars and trucks. But others were not so sure.
India’s government wants to promote biofuel production using its own agricultural waste, said Jai Asundi, research coordinator at a Bengaluru-based think tank, the Center for Study of Science, Technology and Policy.
“There is a potential for producing ethanol from locally available sources without depending on imports,” Asundi said.
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Eni US could begin work on oil exploration in federal waters off Alaska as soon as next month after the Trump administration on Tuesday approved permits for leases the company has held for a decade, the Interior Department said.
The department’s Bureau of Safety and Environmental Enforcement, issued Eni US, a unit of Italy’s Eni, a permit to explore for oil from an artificial island in the Beaufort Sea. Eni is the first company allowed to explore for oil in federal waters off Alaska since 2015.
The approval is part of the Trump administration’s policy to maximize output of fossil fuels for domestic use and for exporting.
Scott Angelle, the BSEE director, said developing Arctic resources responsibly is a “critical component to achieving American energy dominance.”
Environmentalists say exploring for oil in the Arctic is dangerous.
“The Trump administration is risking a major oil spill by letting this foreign corporation drill in the unforgiving waters off Alaska,” said Kristen Monsell, the legal director for oceans at the Center for Biological Diversity nonprofit group.
Eni wants to drill into the Beaufort from the island using extended wells more than 6 miles (10 km) long. Eni US did not immediately respond to a request for comment about when it would start drilling.
In April President Donald Trump signed a so-called America-First Offshore Energy Strategy executive order to extend offshore drilling to areas in the Arctic and other places that have been off limits.
Eni’s leases, which were set to expire by the end of the year, were outside of an area protected by former President Barack Obama weeks before he left office. The company’s plan to move ahead with risky and expensive drilling in the Arctic comes despite years of low oil prices and plentiful sources of crude in the continental United States.
Royal Dutch Shell Plc quit its exploration quest offshore of Alaska in 2015 after a ship it had leased suffered a gash in mostly uncharted waters and environmentalists discovered an existing law that limited the company’s ability to drill.
Republicans are eager to drill elsewhere in Alaska. A tax bill passed by the Senate budget committee Tuesday contained a provision to open drilling in a portion of Alaska’s Arctic National Wildlife Refuge. Conservationists say the refuge is one of the planet’s last paradises.
The bill, which Republicans hope to pass in the full Senate this week, faces an uncertain future.
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Venezuelan leftist President Nicolas Maduro on Tuesday evening held a ceremony to swear in a military officer as the new head of state oil company PDVSA in the presence of the military’s top brass and cheering red-shirted oil workers.
In a surprise move, the unpopular Maduro on Sunday tapped Major General Manuel Quevedo to lead both PDVSA and the Oil Ministry, giving the already powerful military control of the OPEC nation’s dominant industry.
“He’s a man of the people … and, most importantly, he’s honest!” said Maduro, as workers cheered and chanted that they wanted a “clean up in PDVSA!” after a series of corruption scandals.
Maduro also announced he was naming Ysmel Serrano, the head of the trade and supply division, as vice president of PDVSA, which oversees the world’s largest crude reserves. Maduro said he would seek to name the country’s former energy minister, Ali Rodriguez, as “honorary president” of PDVSA.
More military officers are set to be named to senior management posts as part of a shakeup the government says is aimed at fighting corruption, two company sources told Reuters on Monday.
Sources in the sector also said Quevedo’s appointment could quicken a white-collar exodus from PDVSA and worsen operational problems at a time when production has already tumbled to near 30-year lows of under 2 million barrels per day.
As India starts to use blockchain technology for land deals, it must protect the rights of the most vulnerable with policies for the responsible use of big data, analysts said.
At least two Indian states are testing blockchain — a ledger system tracking digital information — to record land deals and bring transparency to a system that is rife with fraud and leaves the poor at risk of eviction.
Putting India’s land records on blockchain — the technology behind the bitcoin currency — would greatly increase efficiency, reduce corruption and boost economic growth, experts say.
But fears about the misuse of data persist.
“One of the biggest challenges with respect to big data is the fear of discrimination and profiling based on religion, caste or income level,” said Nikhil Narendran, a partner at the law firm Trilegal.
“The government should engage in responsible and ethical big data processing, and have adequate mechanisms to retain ownership and confidentiality,” he said in Blockchain for Property, a handbook for its adoption, released Tuesday.
Land records in most Indian states date to the colonial era, and most land holdings have uncertain ownership. Fraud is rampant, and disputes over titles often end up in court.
Torn maps, old disputes
A national land record modernization program, launched in 2008 to survey lands, update records and establish ownership, has been delayed by torn maps and disputes dating back decades.
Blockchain works by creating permanent, public “ledgers” of all transactions, potentially replacing a mass of overlapping records with one simple database.
It enables real-time updates of records, improving efficiency and transparency, and reducing bribes, analysts say.
But there cannot be a complete switch to a blockchain platform, because millions are still not literate and lack access to smartphones and computers, said Ananth Padmanabhan, a fellow at think tank Carnegie India.
“There needs to exist a dual system, that is, an option to use the online services but also the old process of paper documents submission at the government office,” he said.
It is also important that the data not be used to profile people or discriminate against them — for instance, denying home loans to people from certain backgrounds, Narendran said.
“If used in a responsible and ethical manner, big data can bring about real change, including in the area of land transactions,” he told the Thomson Reuters Foundation. “We need a model that is rights based and accountability based, so there are fewer chances of the misuse of data.”
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Chobani, the company that helped kick-start the Greek yogurt craze, is shrinking those words on its label as it may expand beyond that food in an increasingly crowded yogurt market.
The new look, which will show up in supermarkets this week, removes “Greek Yogurt” from underneath the Chobani name. The yogurt inside will stay the same. Its packaging will be more muted than the current bright white, use a new font and style, and feature watercolor paintings of fruits rather than photographs of strawberries and peaches.
“What this new identity enables us to do is start to seed, if you will, us going into other areas beyond yogurt,” says Peter McGuinness, Chobani’s chief marketing officer. But he wouldn’t say what new foods or products it might make, or when it would happen.
Chobani has grown quickly since its yogurt was first sold at supermarkets 10 years ago. Older food companies scrambled to catch up and offer their own versions of Greek yogurt, but last year Chobani overtook General Mills Inc.’s Yoplait as the best-selling yogurt brand in the U.S., according to market research firm Euromonitor.
McGuinness says the new, thicker font makes Chobani easier to spot in the overcrowded yogurt aisle, and the off-white containers differentiate it from its rivals.
Its Smooth Yogurt, which it launched earlier this year as a less-tart alternative to Greek yogurt, gets a more colorful container and shrinks the Chobani name. A similar treatment was given to Chobani Flip, which has yogurt in one container and mix-ins such as chocolate or dried cranberries in the other. Flip, which was launched nearly four years ago, is on track to become a $1 billion business in about two years, says McGuinness. It gets people to eat yogurt beyond breakfast, he says, and brings people to the brand who may not like yogurt.
He declined to say how much the redesign would cost, but anywhere the logo appears is being updated. “This is a big investment,” he says.
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The coal industry and environmentalists squared off Tuesday at a public hearing over the Trump administration’s planned repeal of an Obama-era plan to limit planet-warming carbon emissions.
The Environmental Protection Agency was holding the only scheduled hearing on the reversal in Charleston, West Virginia, capital of a state heavily dependent on coal mining. The hearing was expected to last two days.
The Clean Power Plan sought to ratchet down use of the dirtiest fossil fuel but never took effect because of lawsuits filed by coal companies and conservative-leaning states. Coal-fired power plants are a major source of the carbon emissions driving climate change.
Among those testifying was Bob Murray, chief executive Murray Energy Corp. He derided the Obama plan as an illegal power grab that has cost coal miners their livelihoods.
“The Clean Power Plan would devastate coal-fired electricity generation in America,” said Murray, whose company employs 5,200 miners and has 14 active coal mines. “This would impose massive costs on the power sector and on American consumers.”
Under the Obama administration, EPA held four multiday public hearings — in Washington, Atlanta, Pittsburgh and Denver — to collect feedback before issuing the Clean Power Plan in 2015. About two dozen conservative-leaning states and a battery of fossil-fuel companies immediately sued, successfully preventing the carbon reduction plan from taking effect before the election of Donald Trump, who as a candidate pledged to repeal it.
To head EPA, Trump appointed Scott Pruitt, a former Oklahoma attorney general who was among those who fought the Clean Power Plan in court. Pruitt has made a priority the delay and reversal of recent environmental regulations negatively impacting the profits of coal and petrochemical companies.
Though Trump, Pruitt and others have blamed environmental regulations for the loss of coal-mining jobs, the accelerating shift of electric utilities using cheaper and cleaner-burning natural gas is a primary culprit.
Pruitt has also sought to cast doubt on the consensus of climate scientists that the continued burning of fossil fuels is the main driver of global warming. Scientists say climate change has already triggered rising seas and more extreme weather, including killer heat waves, worsened droughts and torrential rains.
Pruitt did not attend Tuesday’s public hearing, which was presided over by three EPA employees.
The Sierra Club’s climate-policy director, Liz Perera, told them that the proposed repeal ignores scientific reality.
“This is about the kind of world that we want to leave for our children,” she said.
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Jerome Powell says that if confirmed as the next chairman of the Federal Reserve, he expects the Fed to continue raising interest rates gradually to support its twin goals of maximum employment and stable prices.
Under his leadership, Powell also says, the Fed would consider ways to ease the regulatory burdens on banks while preserving the key reforms Congress passed to try to prevent another financial crisis.
Powell’s comments came in written testimony prepared for his confirmation hearing Tuesday before the Senate Banking Committee.
A member of the Fed’s board since 2012, Powell was nominated by President Donald Trump to succeed Janet Yellen after her four-year term as chair ends in February. Trump decided against offering Yellen a second term.
In his remarks released Monday, Powell sought to send the reassuring message that he would represent a figure of stability and continuity at the nation’s central bank while remaining open to making certain changes as appropriate.
On banking regulations, Powell said in his testimony, “We will continue to consider appropriate ways to ease regulatory burdens while preserving core reforms … so that banks can provide the credit to families and businesses necessary to sustain a prosperous economy.”
Among those reforms, Powell mentioned the stricter standards for capital and liquidity that banks must maintain under the Dodd-Frank financial reform law and the annual “stress tests” that the biggest banks must undergo to show they could withstand a severe downturn.
‘Gradual’ is key
Regarding interest rates, Powell said, “We expect interest rates to rise somewhat further and the size of our balance sheet to gradually shrink.” The Fed has begun gradually shrinking its balance sheet, which swelled after the financial crisis from bond purchases it made to help reduce long-term borrowing rates.
The Yellen Fed has raised rates four times starting in December 2015, including two rate hikes this year. Economists expect a third rate hike to occur in December, and they’re projecting at least three additional rate increases in 2018.
Powell cautioned that while Fed officials want to make the path of interest rate policy as predictable as possible, “the future cannot be known with certainty.” For that reason, he said, it’s important for the Fed to retain the flexibility it needs to adjust its policies in response to economic developments.
In deciding not to offer Yellen another four years as chair, Trump made her the only Fed leader in nearly four decades not to be offered a second term.
Yellen, a Democrat who was nominated by President Barack Obama and became the first woman to lead the Fed, announced last week that she would step down from the Fed board once Powell is confirmed to succeed her as chair. Yellen could have remained on the board even after Powell became chair.
Yellen will leave the Fed in February after a tenure characterized by a cautious stance toward rate hikes, relative transparency about the Fed’s expectations and projections and support for the stricter bank rules that were enacted after the 2008 financial crisis.
A centrist
In his five years as a member of the Fed’s seven-member board of governors, Powell has built a reputation as a centrist. He never dissented from the policies advocated by Yellen or her predecessor, Ben Bernanke.
In his own remarks on rate policies, Powell has so far stuck close to the Yellen line. In a speech in June, he said that while low unemployment argued for raising rates, weak inflation suggested that the Fed should move cautiously in doing so. That wary approach reflected Yellen’s own warnings about the need to raise rates only incrementally, depending on the latest economic data.
Powell’s actions on the Dodd-Frank Act, the law enacted to tighten banking regulations after the 2008 crisis, may turn out to be the area where he will differ most from his predecessor. Yellen rejected arguments that the tighter regulations had hurt economic growth by making banks less likely to lend. Powell, for his part, has suggested that in some areas, the Dodd-Frank restrictions might have gone too far.
In a congressional appearance in June, Powell said that the “core reforms” should be retained but that in some respects there was a need to “go back and clean up our work.” He indicated that two areas where loosening the rules might be considered were in easing regulations on smaller banks and revising the “Volcker rule” curbs on investment trades by big banks.
Ivanka Trump described the hurdles faced by women during a speech Tuesday at a business conference in India, which is treating her trip like a royal visit.
But her solo outing also highlighted questions about whether her message of empowering poor women matches her actions.
Trump’s speech at the Global Entrepreneurship Summit in the southern city of Hyderabad was broadcast live throughout India by major news channels. A buildup worthy of a Bollywood musical included cultural references that ranged from independence leader Mahatma Gandhi to the movie “Slumdog Millionaire.”
The city had cleared away beggars and filled potholes ahead of the visit by Trump, the daughter of President Donald Trump and a senior presidential adviser. She arrived without top officials from the State Department.
“As a former entrepreneur, employer, and executive in a male-dominated industry, I’ve seen firsthand that all too often women must do more than their male counterparts to prove themselves at work, while also disproportionately caring for their families at home,” Trump said in her speech.
But the conference’s focus on female entrepreneurs raises questions about some of the commercial decisions made by Trump and her namesake brand.
Critics have faulted her for failing to use her leadership role to call out labor and human rights abuses, particularly in China, where the bulk of her U.S. merchandise ships from. And they point out that she has failed to take a public stand on alleged abuses in her brand’s own supply chain.
Trump stepped back from day-to-day management of her brand before taking on an official role as White House adviser, but still retains an ownership interest.
“After my father’s election, I saw an opportunity to leave my businesses for the privilege of serving our country, and empowering all Americans to succeed,” she said in the speech.
Abigail Klem, president of the Ivanka Trump brand, has called supply chain integrity “a top priority,” but the brand has not joined the growing number of companies that publicly identify their manufacturers.
A September investigation by The Associated Press showed that Trump’s supply chain has become more opaque than ever since she took on her White House role, making it impossible to know whom her company is doing business with around the world. The brand has said supply chains are the responsibility of its licensees.
Earlier this month, 23 rights groups signed a letter urging Trump, her brand and two licensees to publish the names and addresses of suppliers.
They also urged Trump and her brand to publicly demand that the Chinese government not prosecute three activists detained this past summer while investigating the brand’s supply chain, and allow independent monitoring of factories.
Trump was joined at Tuesday’s conference by Indian Prime Minister Narendra Modi.
“What you are achieving here is truly extraordinary,” Trump said. “From your childhood selling tea to your election as India’s prime minister, you’ve proven that transformational change is possible.”
Modi was scheduled to host Trump for dinner at the luxurious Falaknuma Palace Hotel.
“This event showcases the close ties between the United States of America and India,” Modi said. “It underlines our shared commitment to entrepreneurship and innovation.”
Trump did not spend a lot of time during her speech discussing U.S. politics, although she did say the administration was “laser focused on passing long overdue tax cuts.”
The cleanup of Hyderabad, a southern technology hub, began a month ahead of the conference, when the city began rounding up several hundred homeless people and beggars.
Officials said the drive against begging was launched because two international events were taking place in the city — the entrepreneurship summit and the World Telugu Conference in December. Begging is a criminal offense in India and can be punished by as much as 10 years in prison, although the law is rarely enforced.
Beggars tend to crowd around cars at traffic signals, knocking on windows and asking for food and money. They include children as young as 5, who weave through dangerous traffic and often perform small acrobatic acts.
“It’s cool that she’s coming,” said Amani Bhugati, a medical student, before the speech. “She’s glamorous, beautiful and powerful. It’s like a combination of Hollywood and politics.”
Others marveled at the improvements made around Hyderabad. “All new,” said Gopal, a taxi driver who gave only his first name.
But he also pointed to the potholes that remain on many smaller streets. “She’s not coming here, so they didn’t fix it,” he said.
More than 1,200 people were attending the three-day conference, although not everyone was thrilled about Trump’s presence.
“It’s now being called Ivanka Trump’s summit. It totally overshadows all our work,” said Sangeeta Agarawal, the chief executive of U.S. startup Helpsy Health. “We feel that’s it become more about her.”
The annual entrepreneurship conference has a theme this year of “Women first, prosperity for all,” and involves networking, mentoring and workshops.
Trump was to host at least two panel discussions before leaving Wednesday.
The world economy is growing faster than it has in seven years and more and more people are working — but the high growth isn’t expected to last long, and wages remain stubbornly stagnant.
That’s according to forecasts Tuesday from the Organization for Economic Cooperation and Development, which urged governments to do more to ensure longer-term growth and better living standards across the board.
The group, which recommends policies for leading economies, predicts sustained growth in the U.S. this year and next and a sharper-than-expected increase in the countries that use the euro currency.
For 2019, however, the OECD forecasts “a tempering of growth rather than continued strengthening.”
Chief Economist Catherine Mann urged faster re-training of workers amid drastic technological changes, extending retirement ages, investing in renewable energy and simplified tax rules to reduce risks of a new downturn.
“We’ve got wind under the wings but we’re flying low,” she said at the OECD headquarters in Paris.
The agency slightly raised its global growth forecast to 3.6 percent this year — the highest since the post-crisis upturn in 2010 — thanks to rising industrial production, trade and technology spending.
But that “remains modest by past standards,” the OECD said.
Globally, it forecasts 3.7 percent growth next year with a slight drop to 3.6 percent in 2019.
In the United States, the OECD inched up its outlook, predicting 2.2 percent growth this year and 2.5 percent in 2018 thanks to “buoyant asset prices and strong business and consumer confidence.” It expects U.S. growth to fall back to 2.1 percent in 2019.
The OECD cautioned that its forecasts are clouded by uncertainty over President Donald Trump’s tax policies and risks of protectionist trade moves. Trump campaigned to protect manufacturing jobs in the U.S. and renegotiate international trade deals he sees as unfair.
The long-troubled eurozone enjoyed another boost as the OECD became the latest group to raise its forecasts for the 19-country region. Tuesday’s report foresees 2.4 percent growth this year and 2.1 percent for next year, but predicted growth will sink back below 2 percent in 2019.
The main trouble spot is Britain, whose economy will continue to be hobbled by uncertainty surrounding its exit from the European Union. Economic growth “will continue to weaken” and be just above 1 percent in 2018 and 2019, it said.
Another big concern of the OECD: employment is rising across most rich economies, but people’s wages aren’t.
“It’s against intuition, it’s against basic principles of economics, and normally it should have been otherwise,” OECD chief Angel Gurria said. “Clearly growth has to be made more inclusive.”
“The ongoing digital revolution should be unlocking efficiencies and allowing workers to produce more,” he said. But “nobody will be able to produce more if they don’t have the skills to get the most out of the machine.”
The report also warned of the risks of high corporate debt in China and spiking housing prices in some U.S. cities and rising household debt.
In the United States, it’s Cyber Monday, a day when holiday shoppers could set a new spending record for online purchases from work, home or anywhere with their cellphones.
With rising wages in the U.S., low unemployment and strong consumer confidence, research firm Adobe Analytics predicted shoppers could spend $6.6 billion on Monday, more than a 16 percent jump over last year’s record-setting total.
Online shopping has been increasing steadily in the U.S. for years as many consumers stay away from traditional brick-and-mortar stores in favor of the convenience of shopping from laptop computers, hand-held devices or, to the dismay of their employers, workplace computers.
Black Friday
Black Friday, the day after last week’s Thanksgiving holiday in the U.S., is traditionally the biggest holiday shopping day of the year, coming a few weeks ahead of gift-giving at Christmas and Hanukkah. Equity firm Consumer Growth Partners estimated Friday’s sales, both in stores and online, at about $33 billion, a 4.8 percent advance over 2016.
Even as shoppers, lured by discounted prices, thronged to stores on Friday to buy the latest tech gadgets, toys and clothing, retailers reported that overall, the number of shoppers in their stores dipped a bit, an indication that many buyers were instead shopping online.
The National Retail Federation is predicting that U.S. consumer spending in November and December could climb 4 percent over a year ago to $682 billion, which would make this the strongest holiday shopping season since 2014.
Competition
Two of the biggest online retailers in the U.S., Amazon.com and Wal-Mart Stores, are about even in offering the lowest prices on a large array of consumer items, a Reuters survey showed. A year ago, products bought through Amazon were typically 3 percent cheaper, but the news agency said its survey showed that Wal-Mart has now narrowed the gap to three-tenths of 1 percent.
The boost in consumer spending, which accounts for 70 percent of the U.S. economy, the world’s largest, is buoyed by a falling jobless rate. The unemployment rate was 4.1 percent in October, the lowest level in 17 years, and employers hired another 261,000 workers.
The driest Thanksgiving weekend in five years may have helped holiday shopping, despite an overall decline in foot traffic. But some shoppers just took notes in the hopes of finding an even better deal online.
That’s a consequence of Amazon continuing to squeeze prices, exacerbating the “showrooming” practice of people getting ideas at brick-and-mortar stores, then buying online.
Heather Just and husband Dominic of Rockford, Illinois, brought their twin 11-year-old boys and 13-year-old son to the giant Water Tower Place on Chicago’s Magnificent Mile on Saturday to see “what their eyes get big about.”
The excursion was more recon mission than shopping spree. “We’re watching, we’re watching,” she told her sons, who focused their attention on a Nintendo Switch portable game console.
Amaz-ing prices
Amazon continues to beat prices at other retailers in many cases, according to marketing technology company Boomerang Commerce.
For example, it pointed out that Amazon cut prices on Beats Solo 3 wireless headphones. The Associated Press found them on Amazon selling for $200, $10 below BestBuy.com, and $40 below the Black Friday deal at Target.
But Walmart isn’t far behind in high-tech price matching. Following its purchase of Jet.com last year for $3.3 billion, the company can now quickly ratchet prices down on popular items using machine-learning algorithms, while maintaining profit margins on lesser-trafficked items.
The technology has set up Walmart and Amazon for a “clash of the titans” in online sales where consumer perceptions of prices are formed, according to Boomerang’s vice president of marketing, Gary Liu.
“You can’t compete in the same way you did before,” Liu said.
Online supplements offline
Steve Hagan, a general contractor from Richmond, Kentucky, said his 9-year-old son, Luke, and 8-year-old daughter, Lauren, used their own money and gift cards to buy toys on a Chicago shopping trip from the Star Wars and Bitty Baby brands. But he was keeping track of where Santa could digitally fill in the blanks.
“That baby doll may need some accessories and I had to ask Luke which Star Wars character he was getting and which one he already has,” said Hagan, adding that he’ll shop online later. “I’m taking notes.”
Lisa Stripling, of South Bend, Indiana, said her goal was to see what her 3 1/2-year-old grandson Max liked and buy it online.
“I used to do most of my shopping in stores and now it’s 75 percent online and 25 percent in the stores,” she said.
Weather cooperating
Rainfall from Thanksgiving through the weekend was the lowest since 2013, and snowfall was the lowest in over 20 years, boosting foot traffic to malls and restaurants, according to weather analytics firm Planalytics.
Cold, dry conditions in the populous northeast bolstered the holiday shopping spirit, because it “drives more people to apparel” as they bundle up, according to Planalytics president Scott Bernhardt.
Nationally, it was the warmest Black Friday weekend since 2001.
Despite the favorable conditions, foot traffic to stores nationwide for the Thanksgiving Day through Saturday fell 3.1 percent from a year ago, according to store visitation tracker RetailNext Inc. It partly blamed the creep of sales events into the first week of November for the decline, though foot traffic has fallen four years in a row.
Strong results
Daniel Ives, head of technology research for GBH Insights, said Amazon was posting stronger-than-expected sales, and at this pace, it could beat fourth-quarter sales estimates by 5 percent.
Jon Abt, co-president of Glenview, Illinois-based Abt Electronics, said sales from Friday through Sunday were up about 14 percent from a year ago, driven by higher-priced TVs from LG and Sony, video game consoles such as Sony’s PS4 and Microsoft’s Xbox One S and smart speakers from Amazon, Google and Sonos.
A few management decisions have kept the 81-year-old single-location retailer thriving: Abt shuns doorbuster specials with limited-supply items that can run out and disappoint shoppers. It also has resisted the creep of sales starting earlier and earlier (the store is closed Thanksgiving Day).
And Abt says the store has more than 100 terminals to let people price-shop as much as they like, which the store will match.
“We invite people to use the internet if they want to,” Abt said. “If they’re not going to do it in here, they’re doing it at home.”
Wildfires that swept through Northern California in early October killed 42 people, destroyed hundreds of homes, and caused an estimated $6 billion in damage to the region. The fires have also frozen an income stream the region relies on: tourism. VOA’s Kevin Enochs reports.
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Black Friday and Thanksgiving online sales in the United States surged to record highs as shoppers bagged deep discounts and bought more on their mobile devices, heralding a promising start to the key holiday season, according to retail analytics firms.
U.S. retailers raked in a record $7.9 billion in online sales on Black Friday and Thanksgiving, up 17.9 percent from a year ago, according to Adobe Analytics, which measures transactions at the largest 100 U.S. web retailers, Saturday.
Adobe said Cyber Monday is expected to drive $6.6 billion in internet sales, which would make it the largest U.S. online shopping day in history.
Traditional retailers prepared
In the run-up to the holiday weekend, traditional retailers invested heavily in improving their websites and bulking up delivery options, pre-empting a decline in visits to brick-and-mortar stores. Several chains tightened store inventories as well, to ward off any post-holiday liquidation that would weigh on profits.
TVs, laptops, toys and gaming consoles — particularly the PlayStation 4 — were among the most heavily discounted and the biggest sellers, according to retail analysts and consultants.
Commerce marketing firm Criteo said 40 percent of Black Friday online purchases were made on mobile phones, up from 29 percent last year.
No brick-and-mortar data yet
No brick-and-mortar sales data for Thanksgiving or Black Friday was immediately available, but Reuters reporters and industry analysts noted anecdotal signs of muted activity — fewer cars in mall parking lots, shoppers leaving stores without purchases in hand.
Stores offered heavy discounts, creative gimmicks and free gifts to draw bargain hunters out of their homes, but some shoppers said they were just browsing the merchandise, reserving their cash for internet purchases. There was little evidence of the delirious shopper frenzy customary of Black Fridays from past years.
Store traffic bucks predictions
However, retail research firm ShopperTrak said store traffic fell less than 1 percent on Black Friday, bucking industry predictions of a sharper decline.
“There has been a significant amount of debate surrounding the shifting importance of brick-and-mortar retail,” Brian Field, ShopperTrak’s senior director of advisory services, said.
“The fact that shopper visits remained intact on Black Friday illustrates that physical retail is still highly relevant and when done right, it is profitable.”
The National Retail Federation (NRF), which had predicted strong holiday sales helped by rising consumer confidence, said Friday that fair weather across much of the nation had also helped draw shoppers into stores.
The NRF, whose overall industry sales data is closely watched each year, is scheduled to release Thanksgiving, Black Friday and Cyber Monday sales numbers Tuesday.
U.S. consumer confidence has been strengthening over this past year, thanks to a labor market that is churning out jobs, rising home prices and stock markets that are hovering at record highs.
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Who’s the boss? That’s the awkward question after the departing head of a government agency charged with looking after consumer rights appointed a deputy to temporarily fill his spot. The White House then named its own interim leader.
One job, two people — and two very different views on how to do it.
The first pick is expected to continue the aggressive policing of banks and other lenders that have angered Republicans. The second, President Donald Trump’s choice, has called the agency a “joke,” an example of bureaucracy run amok, and is expected to dismantle much of what the agency has done.
So come Monday, who will be leading the Consumer Financial Protection Bureau?
Both say law on their side
Senior Trump administration officials said Saturday that the law was on their side and they expect no trouble when Trump’s pick for temporary director of the CFPB shows up for work. Departing director Richard Cordray, an Obama appointee long criticized by Congressional Republicans as overzealous, had cited a different rule in saying the law was on his side.
In tendering his resignation Friday, Cordray elevated Leandra English, who was the agency’s chief of staff, into the deputy director position. Citing the Dodd-Frank Act that created the CFPB, he said English, an ally of his, would become acting director upon his departure.
Corday’s move was widely seen as an attempt to stop Trump from shaping the agency in the months ahead.
The White House cites the Federal Vacancies Reform Act of 1998. Administration officials on Saturday acknowledged that some other laws appear to clash with Vacancies Act, but said that in this case the president’s authority takes precedence.
Important, though temporary, job
Who prevails in the legal wrangling is seen as important even though this involves just a temporary posting. Getting a permanent replacement approved by the Senate could take months.
The president’s pick for temporary appointee, Mick Mulvaney, had been widely anticipated. Mulvaney, currently director of the Office of Management and Budget, has been an outspoken critic of the agency and is expected to pull back on many of Cordray’s actions in the six years since he was appointed.
Trump announced he was picking Mulvaney within a few hours of Cordray’s announcement Friday.
“The Consumer Financial Protection Bureau, or CFPB, has been a total disaster as run by the previous Administrations pick,” Trump tweeted Saturday from his private Mar-a-Lago club in Palm Beach, Florida, where he is spending a long Thanksgiving weekend. “Financial Institutions have been devastated and unable to properly serve the public. We will bring it back to life!”
The administration officials, speaking on condition of anonymity to discuss the White House’s thinking, called Trump’s appointment of an acting director a “routine move.” They said the Justice Department’s Office of Legal Counsel has already approved Trump’s appointment of Mulvaney and will issue a written legal opinion soon.
The clashing appointments raise the question: What happens when the two new heads show up and try to sit at the same desk and give orders?
One of the administration officials said Mulvaney was expected to start working Monday and that English was expected to also show up — but as deputy director.
Leandra English
English is a trusted lieutenant of Cordray’s who has helped investigate and punish financial companies in ways that many Republicans, Mulvaney in particular, think go too far. In his announcement Friday, Cordray highlighted English’s “in-depth” knowledge of the agency’s operations and its staff. Before joining the CFPB, English served at the Office of Management and Budget and Office of Personnel Management.
“Leandra is a seasoned professional who has spent her career of public service focused on promoting smooth and efficient operations,” Cordray said in the statement.
Mick Mulvaney
Mulvaney was a South Carolina representative to the House before becoming head of the budget office. A founder of the hard-right House Freedom Caucus, he was elected in 2010 as part of a tea party wave that brought many critics of the U.S. budget deficit to office. He has taken a hard line on federal spending matters, routinely voting against increasing the government’s borrowing cap and pressing for major cuts to benefit programs as the path to balancing the budget.
He also has been unsparing in his criticism of the CFPB. In a widely quoted comment, he once blasted the agency as “joke,” saying its lack of oversight by Congress and its far-reaching regulations had gone too far.
“The place is a wonderful example of how a bureaucracy will function if it has no accountability to anybody,” he told the Credit Union Times in 2014. “It turns up being a joke in a sick, sad kind of way.”
Congress weighs in
U.S. Rep. Jeb Hensarling, chairman of the powerful House Financial Services Committee and a longtime critic of Cordray, said Mulvaney would “fight not only to protect consumers from force, fraud, and deception but will protect them from government interference with competitive, innovative markets and help preserve their fundamental economic opportunities and liberties.”
Democrats have seized upon Mulvaney’s words in criticizing his appointment to the agency.
U.S. Rep. Maxine Waters of California, the top Democrat on the Financial Services Committee, issued a statement Saturday calling Mulvaney “unacceptable” to lead the CFPB because of his “noxious” views toward its mission to protect consumers.
“He was also the original co-sponsor of a bill to completely eliminate the Consumer Bureau,” she wrote, “and supported other legislation to harmfully roll back Wall Street reform.”
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The director of the Consumer Financial Protection Bureau resigned Friday and named his own successor, leading to an open conflict with President Donald Trump, who announced a different person as acting head of the agency later in the day.
That means there are now effectively two acting directors of the CFPB, when there should only be one.
Typically an acting director position would be filled according to the Federal Vacancies Reform Act of 1998. But Richard Cordray, along with his resignation, elevated Leandra English, who was the agency’s chief of staff, into the deputy director position.
Under the Dodd-Frank Act that created the CFPB, English would become acting director. Cordray, an Obama appointee, specifically cited the law when he moved English, a longtime CFPB employee and ally of his, into that position.
Trump appoints CFPB critic
Within a few hours, President Donald Trump announced his own acting director of the agency, Mick Mulvaney, who is currently director of the Office of Management and Budget. Mulvaney had widely been expected to be Trump’s temporary pick for the bureau until a permanent one could be found.
Mulvaney is a long-time critic of the CFPB, and has wanted the agency’s authority significantly curtailed. So the difference between English and Mulvaney running the agency would be significant.
Senate confirmation needed
The person nominated to be director of the CFPB requires confirmation by the Senate, and it could be many weeks or months before the person would be able to step into the role permanently. Cordray’s move was aimed at allowing his favored successor to keep running the agency for as long as possible before a Trump appointee is confirmed by the Senate.
Cordray had announced earlier this month that he would resign by the end of this month. There is wide speculation that Cordray, a Democrat, is resigning in order to run for governor in his home state of Ohio.
What CFPB does
The CFPB was created as part of the laws passed following the 2008 financial crisis and subsequent recession. The agency was given a broad mandate to be a watchdog for consumers when they deal with banks and credit card, student loan and mortgage companies, as well as debt collectors and payday lenders. Nearly every American who deals with banks or a credit card company or has a mortgage has been affected by new rules the agency put in place.
Cordray used that mandate aggressively as its first director, which often made him a target for the banking industry’s Washington lobbyists and congressional Republicans who believed Cordray was overreaching in his role, calling the CFPB a “rogue agency.”
As director, he also was able to extract billions of dollars in settlements from banks, debt collectors and other financial services companies for wrongdoing. When Wells Fargo was found to have opened millions of phony accounts for its customers, the CFPB fined the bank $100 million, the agency’s largest penalty to date.
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Overhauling welfare was one of the defining goals of Bill Clinton’s presidency, starting with a campaign promise to “end welfare as we know it,” continuing with a bitter policy fight and producing change that remains hotly debated 20 years later.
Now, President Donald Trump wants to put his stamp on the welfare system, apparently in favor of a more restrictive policy. He says “people are taking advantage of the system.”
Trump, who has been signaling interest in the issue for some time, said this past week that he wants to tackle the issue after the tax overhaul he is seeking by the end of the year. He said changes were “desperately needed in our country” and that his administration would soon offer plans.
Work on new policy begins
For now, the president has not offered details. Spokeswoman Sarah Huckabee Sanders said more specifics were likely early next year. But the groundwork has begun at the White House and Trump has made his interest known to Republican lawmakers.
Paul Winfree, director of budget policy and deputy director of Trump’s Domestic Policy Council, told a recent gathering at the conservative Heritage Foundation that he and another staffer had been charged with “working on a major welfare reform proposal.” He said they have drafted an executive order on the topic that would outline administration principles and direct agencies to come up with recommendations.
“The president really wants to lead on this,” Winfree said. “He has delivered that message loud and clear to us. We’ve opened conversations with leadership in Congress to let them know that that is the direction we are heading.”
Trump said in October that welfare was “becoming a very, very big subject, and people are taking advantage of the system.”
Clinton’s campaign promise
Clinton ran in 1992 on a promise to change the system but struggled to get consensus on a bill, with Democrats divided and Republicans pushing aggressive changes. Four years later, he signed a law that replaced a federal entitlement with grants to the states, placed a time limit on how long families could get aid and required recipients to go to work eventually.
It has drawn criticism from some liberal quarters ever since. During her presidential campaign last year, Democrat Hillary Clinton faced activists who argued that the law fought for by her husband punished poor people.
No evidence of fraud
Kathryn Edin, a professor at Johns Hopkins University who has been studying welfare since the 1990s, said the law’s legacy has been to limit the cash assistance available to the very poor and has never become a “springboard to work.” She questioned what kinds of changes could be made, arguing that welfare benefits are minimal in many states and there is little evidence of fraud in other anti-poverty programs.
Still, Edin said that welfare has “never been popular even from its inception. It doesn’t sit well with Americans in general.”
Robert Rector, a senior research fellow at Heritage, said he would like to see more work requirements for a range of anti-poverty programs and stronger marriage incentives, as well as strategies to improve results for social programs and to limit waste. He said while the administration could make some adjustments through executive order, legislation would be required for any major change.
“This is a good system,” he said. “We just need to make this system better.”
Administration officials have suggested they are eyeing anti-poverty programs. Trump’s initial 2018 budget proposal, outlined in March, sought to sharply reduce spending for Medicaid, food stamps and student loan subsidies, among other programs.
Budget director Mick Mulvaney said this year, “If you are on food stamps and you are able-bodied, we need you to go to work.”
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Retailers worked hard to attract shoppers to stores on Black Friday, offering in-person deals meant to counter the ease of shopping online.
A better economy helped, to be sure, but stores have also tried to improve the store experience and offer better service. They’ve also made a big push toward offering store pickup for online orders.
But online leader Amazon is still the first and only stop for many shoppers. So stores are getting creative with the deals.
Victor Moore said he arrived about two hours ahead of Best Buy’s 8 a.m. opening in Nashville and scored one of the about 14 “doorbuster” deals on a 55-inch Toshiba smart TV for $280, a $220 savings. Moore said he’s done some online shopping, but the allure of in-store-only deals drew him out from behind the computer.
“This is the first successful doorbuster that I’ve ever been a part of,” Moore said. “I’ve been in lines before, but never actually got the items that I was waiting for.”
Annette Peluffo usually avoids Black Friday and buys online. But a $250 gift card reward for buying an iPhone 8 plus at a Target store in Miami was hard to resist. She plans to use the money to buy toys for her nephews and nieces in the coming weeks. “I just came here for the iPhone. I am not going to any other store,” she said.
Not just one day
Still, Black Friday isn’t what it used to be. It has morphed from a single day when people got up early to score doorbusters into a whole month of deals. That has thinned out the crowds. And brick-and-mortar stores face plenty of challenges.
With the jobless rate at a 17-year-low of 4.1 percent and consumer confidence stronger than a year ago, analysts project healthy sales increases for November and December. The National Retail Federation trade group expects sales for that period to at least match last year’s rise of 3.6 percent and estimates online spending and other nonstore sales will rise 11 to 15 percent.
But analysts at management consultancy Bain & Company say Amazon is expected to take half of the holiday season’s sales growth.
Amazon said Friday that Thanksgiving continued to be one of its busiest shopping days, with orders through its app up over 50 percent from a year ago. Overall, online sales on Black Friday rose 18.4 percent to $640 million, from a year ago, as of Friday morning, said Adobe Analytics. Thanksgiving generated a total of $2.87 billion in online spending, up 18.3 percent from a year ago, the data firm said.
About 69 percent of Americans, or 164 million people, intend to shop at some point during the five-day period from Thanksgiving to Cyber Monday, according to a survey released by the NRF. It expected Black Friday to remain the busiest day, with about 115 million people planning to shop then.
“The consumer still likes to go to the stores,” said Charles O’Shea, Moody’s lead retail analyst. “I’ve seen a lot of traffic. Yes, there’s going to be a lot of online shopping. But I think the brick-and-mortar stores have done a nice job so far in attracting shoppers.”
That’s true of Karre Wagner, 20, a University of Minnesota student from St. Paul who was shopping at Mall of America in Bloomington with her boyfriend. She bought a Blu-ray player at the mall’s Best Buy store. She says she started holiday shopping on Black Friday, but she likes to go to the mall to shop.
Hands-on experience
“I like to see what I’m buying. I like to touch it, feel it, know exactly what I’m getting, and part of it is the experience,” she said. “I mean, sitting online is fine, but there’s just something about starting the holiday season with Black Friday.”
The shift to online buying is a major factor as industry analysts watch how the nation’s malls fare this holiday shopping season. The Mall of America in Minnesota says that 2,500 people were in line at the 5 a.m. opening Friday, in line with a year ago. Shoppers started queuing up as early as 5:45 p.m. on Thanksgiving. Jill Renslow, Mall of America’s executive vice president of business development, said stores like Nordstrom, Macy’s and Best Buy were crowded. She said the items that caught shoppers’ attention included voice-activated devices like Amazon Echo, nostalgic toys, clothing and shoes.
Macy’s CEO Jeff Gennette said customer counts were higher and business was better in the North and Northeast, even with fewer promotions from a year ago.
But much depends on whether people are buying or just looking, and if they’re buying things that aren’t on sale as well.
Chuck Boyd said he and his son arrived at 4 a.m. to be among the first five or six in line at Best Buy in Nashville to get one each of about 14 “doorbuster” deals. He said he prefers online shopping, but his son wanted a TV for his apartment at school, so Boyd came along to get one, too.
“I’d much rather do online,” Boyd said. “But this was the deal you could only do in the store.”
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Workers at a half dozen Amazon distribution centers in Germany and one in Italy walked off the job Friday, in a protest timed to coincide with Black Friday to demand better wages from the American online giant.
In Germany, Ver.di union spokesman Thomas Voss said some 2,500 workers were on strike at Amazon facilities in Bad Hersfeld, Leipzig, Rheinberg, Werne, Graben and Koblenz. In a warehouse near Piacenza, in northern Italy, some workers walked off the job to demand “dignified salaries.”
The German union has been leading a push since 2013 for higher pay for some 12,000 workers in Germany, arguing Amazon employees receive lower wages than others in retail and mail-order jobs. Amazon says its distribution warehouses in Germany are logistics centers and employees earn relatively high wages for that industry.
The strikes in Germany are expected to end Saturday.
The Italian action, a one-day strike, was hailed by one of the nation’s umbrella union leaders, the UIL’s Carmelo Barbagallo, as having “enormous symbolic value because it’s clear that progress, innovation and modernity can’t come at the expense and the interests of workers.”
The chief of the CISL umbrella labor syndicate, Annamaria Furlan, called on Amazon to work with unions for “proper industrial relations, employment stability and dignified salaries.”
The Italian strike was called for permanent workers. The unions advised workers who are on short-term, work-on-demand contracts to stay on the job, so they wouldn’t risk losing future gigs.
Amazon says it has created 2,000 full-time jobs in Italy, where unemployment remains stubbornly high.
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Black Friday, the day after Thanksgiving, traditionally has started the holiday shopping season in the United States. It refers to the day when retailers hope to turn a profit — go from “being in the red,” or being in debt, to being “in the black,” or making money.
Many stores opened in the early hours of Friday morning to lure shoppers with big bargains. Some stores even opened on Thanksgiving Day to get a head start on the season.
Black Friday is usually the busiest shopping day of the year in the U.S.
WATCH: US Retailers Look to Profitable Black Friday Weekend
The National Retail Federation estimates that 69 percent of Americans, or 164 million, people will take advantage of the deals retailers offer on a vast variety of goods in stores and online.
A recent study said Amazon is the top destination for people beginning their holiday shopping.
“I buy pretty much what I can on Amazon,” Lam Huynh told the Associated Press news agency.
Analysts say online giant Amazon is expected to capture half of the holiday season’s sales growth.
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Toys and TVs at J.C. Penney, Barbies at Best Buy, kitchen appliances like wine refrigerators at B.J.’s. As the holiday shopping season officially kicks off Thursday, shoppers may find some surprises at their favorite stores.
Even as retailers are counting on a lift from a better economy, they’re looking beyond economic data and mapping out ways to pick up sales from other retailers as Amazon expands its reach. That can mean opening earlier than rivals on the holidays or even jumping into new product categories. The fight for market share comes as analysts at Bain say Amazon is expected to take half of the holiday season’s sales growth. And Amazon is the top destination for people to begin holiday shopping, according to a September study by market research firm NPD Group.
“The retailers are in survival mode. It’s about stealing each other’s market share,” said Marshal Cohen, chief industry analyst at NPD. “Amazon is the Grinch. They’re stealing the growth.”
WATCH: Black Friday shoppers
With the jobless rate at a 17-year-low of 4.1 percent and consumer confidence stronger than a year ago, analysts project healthy sales increases for November and December. The National Retail Federation trade group expects sales for that period to at least match last year’s rise of 3.6 percent and estimates online spending and other non-store sales will rise 11 percent to 15 percent.
Amazon is expected to be a big beneficiary as it cements loyalty among its Prime members and moves into new services and private-label merchandise. The company has introduced more than 20 such brands in the past two years in clothing, electronics, groceries and more, says Bain.
That leaves stores looking at rivals to see where they can pick up sales. There are extra dollars up for grabs this year, after thousands of store locations have closed and several retailers including Gymboree and Toys R Us filed for bankruptcy protection.
Jordan Ascencio, who has sons aged 1, 7, and 8, plans to bypass Toys R Us on Black Friday after being turned off by what she says are dirty stores and skimpy supplies. The latest problem: Her online order was canceled following a large-scale coupon glitch.
“I am not a fan anymore,” said the resident of Sapulpa, Oklahoma. Instead, she plans to buy toys at J.C. Penney and Target.
And with Gymboree shuttering a quarter of its stores, Ascencio is buying more of her children’s clothing at Target, which has launched a number of new private label brands.
Target CEO Brian Cornell recently highlighted that up to $60 billion in consumer spending will be up for the taking in the next few years, and said the chain has been picking up market share in such areas as clothing.
A weekend of shopping
The Thanksgiving weekend, when stores go all-out to attract shoppers, can be an indication of how well they’ll do through the season. About 69 percent of Americans, or 164 million people, intend to shop at some point during the five-day period from Thanksgiving to Cyber Monday, according to a survey released by the National Retail Federation. It expects Black Friday to remain the busiest day, with about 115 million people planning to shop then.
Stores like Macy’s, Target and Kohl’s are set to open Thursday evening as they try to woo early shoppers. Walmart starts deals in its stores at 6 p.m. J.C. Penney is opening its doors at 2 p.m., an hour earlier than last year and at least three hours ahead of its department store rivals.
Some retailers are using the weekend to test new product areas before committing to them year-round: Penney says it will have TVs and consumer electronics like game consoles as doorbusters for Thanksgiving and Black Friday only. Penney has also added year-round toy shops and increased its selection of work pants as an apparent move to grab market share from Sears, after last year going back to selling major appliances.
Penney’s Senior Vice President James Starke called these moves “market share plays.”
Both Walmart and Target have been expanding their exclusive toys offerings. Walmart is throwing parties in its stores including ones where kids can play with new toys. Best Buy created its first toy booklet for the holidays. And in its Black Friday ad, the chain features Barbies among smart TVs and other electronics.
Chris Baldwin, CEO of BJ’s Wholesale Club, says it is offering more toys and clothes. In clothing, it’s been able to offer key national brands in areas like casual athletic wear amid rampant store closures. And he says clothing sales are up by at least 10 percent as people don’t go to the mall as much.
“There’s no question that consumer spending has started to tick up and confidence is a little bit better, which is terrific, but we are also seeing some benefit from other retailers,” he said.
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When Gonzalo Perez bought the Castlewood Restaurant last December, it was one of the few outposts among the nearby corn and soybean fields hungry farmers could depend as a place to dine out.
It could become much more than that for Perez.
“It’s my lottery ticket,” he told VOA.
That’s because one of the largest economic development projects in the United States is moving in… right next door.
Taiwanese company Foxconn plans to build a massive flat screen manufacturing and technology facility in nearby Mount Pleasant, employing thousands of workers when completed.
It’s only a few kilometers away from Perez’s restaurant, and he hopes to start cashing in… soon.
“I hope I get a lot of business from construction people in the beginning,” he told VOA from the dining room of another restaurant he owns in a neighboring town which could also benefit from the economic boom the project could bring to the entire region.
WATCH: Foxconn deal
“You are going to probably bring a lot of hotels to the area, bring a lot of chain restaurants to the area. This is a big industry,” Perez explained.
“As they build this facility they are going to require 10,000 construction employees, plus around another 6,000 indirect employees,” says Mark Hogan, Secretary and CEO of the Wisconsin Economic Development Corporation, or WEDC.
“When this ecosystem is up and running in the state of Wisconsin it will be an additional 13,000 employees to the state, and another upwards of 20,000 indirect or induced jobs.”
Hogan’s WEDC is one of the chief institutions in the state that worked on the deal to attract Foxconn to Wisconsin.
“We passed special legislation which really created a pathway for the company to be successful in the state. And that had to do with environmental regulations. It had to do with incentives. It had to do with a lot of different things that just kind of cleared a pathway. All things that every other company in the state would have to comply with, but we wanted to create a faster lane for the company to be able to operate under.”
In the package offered to Foxconn is approximately $3 billion dollars in tax incentives if the company invests around $10 billion dollars in its facility and workforce. But those incentives meant to entice the company were also a concern among its critics.
“This is the largest in U.S. history, and it was somewhat surprising because Wisconsin does not generally play this game,” says Steven Deller, Professor of Applied Economics and an Economic Development Specialist with the University of Wisconsin, Madison.
Deller says one of his concerns, not just as an academic but also as a taxpayer, is the potential for the state to actually owe money to Foxconn.
“But there is the Wisconsin Agricultural and Manufacturing Tax Credit,” he explained to VOA. “The way that the taxpayers may be on the hook for paying some money, if Foxconn is not paying taxes, and they have a tax credit, that means the state is paying Foxconn. So a lot of it is going to hinge on how big that facility becomes. Right not its starting at 3,000 – it could go up to 13,000. We have no idea how big it will actually become.”
For Gonzalo Perez, who came to the U.S. from Mexico 30 years ago and worked his way up from being a laborer in restaurants to now owning two of them, his biggest concern isn’t the size of the plant’s workforce or the tax incentives … it’s the potential increase in the number of his customers.
Right now he says about 200 people visit his restaurant on a good day.
“I hope to triple that,” he says.
He may not have to wait long to see an uptick in business.
Groundbreaking on the new facility is planned for 2018, and as many as 1000 Foxconn employees could be working in the state later that year.
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The U.S. holiday shopping season shifts into high gear this week after the Thanksgiving Day Holiday on Thursday. Black Friday, as it’s called, has become an important day for retailers because for some stores – the start of the holiday shopping season marks the transition, in accounting terms – from red, meaning debt – to black, for profitability. Based on the improving outlook for the US economy, retailers may be in for an early Christmas treat. Mil Arcega has more.
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The $10 billion-dollar deal to bring a Taiwanese-based electronics manufacturer to Wisconsin is raising questions from critics despite the promise that the investment could provide tens of thousands of new American jobs and other long term benefits. The deal’s critics say Wisconsin taxpayers could lose money in what is the largest U.S. state tax incentive package ever offered to a foreign company. VOA’s Kane Farabaugh has more from Racine, Wisconsin.
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