BUSINESS NEWS AT A GLANCE
c.2013 New York Times News Service
RETAILERS’ SLY MESSAGE: GET YOURSELF A GIFT, TOO
Self-gifters have become a special demographic niche that retailers depend on heavily. But some recent surveys suggest this year that these shoppers may be a feeling a little less indulgent — a worrying prospect for companies heading into a season filled with uncertainty and weak sales projections. Given that impulse-buying promotes self-gifting, retailers will be doing everything they can this year — overtly, subtly and even subliminally — to tempt people. For retailers, the potential for growth is greater with self-gifters because personal wants or domestic needs know fewer limits. And they can be justified as a smart household budget move.
ON THE OTHER SIDE OF THE REGISTER, LITTLE MONEY TO SPEND
In many stores around the country, the workers stocking the shelves and ringing up the gifts are at the heart of this season’s retail lament — many Americans are so financially strapped that projections for holiday sales have grown bleaker by the week. Those still stuck at the bottom economic rung have little choice but to take on extra shifts. Food stamps have been cut, and many were stung by the payroll tax increase. For retail workers nationwide, who earn a median pay of about $9.60 an hour, holiday shopping sprees are most often enjoyed by customers on the opposite side of the counter.
MANY HOLIDAY SHOPPERS BUY FIRST AND EAT LATER
Traditionally, the holiday shopping season kicks off on Black Friday. But every year, more stores are opening on the holiday itself, beginning in the predawn hours, before most turkeys even approach the oven. The holiday season is a critical time of year for retailers, and with many Americans still struggling with stagnant wages, retail executives have warned of a lackluster season. Anxiety about low traffic coupled with tight budgets has spurred competition for the lowest price. In a hurry to get to customers first, retailers shot promotions out of the gate not just a few hours early, but days and even weeks ahead.
SOME BIG PUBLIC PENSION FUNDS ACTING MORE LIKE ACTIVIST INVESTORS
Some of the biggest public pension funds, which have sought to influence companies for years, are starting to emulate activist investors like Carl C. Icahn and William A. Ackman by engaging with, and sometimes seeking to oust, directors of companies whose stock they own. Anne Simpson, director of corporate governance at the California Public Employees’ Pension Fund, the largest U.S. pension plan, says “board coups” this year show “how shareholder activism is evolving from barbarians at the gate to acting like owners.” CalPERS is one of several big U.S. public funds that have played roles in shareholder uprisings in recent years.
MIDDLE EASTERN CARRIERS, LED BY EMIRATES, ARE IN A GROWTH SPURT
There is little doubting the ambitions of the giant Middle Eastern airlines, but recent plane orders demonstrated how aggressively these carriers plan to compete. The airlines — Emirates, Etihad Airlines and Qatar Airways — operate more wide-body airplanes than all the U.S. carriers put together. But last week, they announced plans to buy 350 more long-range planes from Boeing and Airbus, with orders valued at a record $162 billion and deliveries extending into the next decade. The orders provided a sense of the scale the airlines are after and dwarf anything U.S. carriers have planned. Emirates has been the main driver of this growth.
RUSSIAN-BACKED FREE-TRADE ZONE MAY EXPAND ITS BORDERS
After years of fits and starts, a Russian-backed idea to form a free-trade zone in much of the former Soviet Union is closer to fruition today than ever before. Adding to the momentum was the Ukrainian government’s decision last week to hold talks on aligning with this group, called the Customs Union, rather than with the European Union. Belarus and Kazakhstan belong, and Kyrgyzstan and Armenia have committed to joining the group. “The main Russian point here is to formalize a zone in which Russia has preferential economic interests and privileges,” Alexander Kliment, a Russian analyst at Eurasia Group in Washington, said.
BRITAIN SHIFTS FOCUS OF LENDING PROGRAM FROM HOUSING TO BUSINESS
In a surprise step aimed at keeping Britain’s housing market from overheating, the Bank of England on Thursday scaled back a government program that encouraged mortgage lending. Mark J. Carney, governor of the Bank of England, said the central bank and the Treasury agreed that it was best to no longer support new lending for mortgages and other uses through the Funding for Lending program, and to focus on new loans to businesses instead. The changes would be effective at the beginning of the year. Under the Funding for Lending program, banks get access to cheaper funding depending on how much more they lend.
PAPER TYING RAT CANCER TO HERBICIDE IS RETRACTED
A food safety journal has decided to retract a paper that seemed to show that genetically modified corn and the herbicide Roundup can cause cancer and premature death in rats. Food and Chemical Toxicology’s editor said in a letter to the paper’s main author that the study’s results, while not incorrect or fraudulent, were “inconclusive, and therefore do not reach the threshold of publication.” The paper, published 14 months ago, has been cited by opponents of biotech foods and proponents of labeling such foods. But it has been criticized as flawed, sensationalistic and possibly fraudulent by many scientists, some allied with the biotechnology industry.