Kmart to close its last full-size US store, only 1 location remaining
Another once strong American retail chain is set to fall to one store in the U.S., not dissimilar to the fall of Blockbuster. Discount department store Kmart plans to shut the doors of its last full-size store in the U.S.
The Long Island location will close on Oct. 20, leaving just one smaller Kmart left in the country. In the 1990s, Kmart was a retail giant with about 2,500 stores across the country, known for its famous “blue light specials” and “attention Kmart shoppers” announcements.
As time went on, Kmart struggled to compete with big-box rivals like Walmart and Target. Its slow response to the rise of online shopping and failure to modernize left the chain struggling to keep up.
As financial difficulties piled up, the retailer first filed for bankruptcy back in 2002. After merging with Sears in 2005 in an estimated $11 billion deal, both companies filed for bankruptcy again in 2018, resulting in the closure of many stores.
Although Kmart has nearly vanished from the U.S., it continues to operate hundreds of locations in Australia, where the brand still remains strong.
Dashcam video: 8-year-old takes mom’s SUV for a Target run
An 8-year-old Ohio girl took her mother’s SUV for a Target run, police said, and part of her journey was caught on camera. Dashcam video from another vehicle recorded part of the child’s trip as the concerned driver called authorities about the erratic SUV.
Police said the girl was reported missing from her family’s home around 9 a.m., Sunday, Sept. 15. Ring video from a neighbor later provided to investigators showed the girl getting into the SUV alone and driving off earlier that morning.
As police investigated, they were soon alerted about a small child driving the Nissan Rogue on a roadway. The 911 caller told The New York Times he tried to take a look at who was behind the wheel of the SUV but “could barely see the driver.”
Authorities set out to search for the vehicle. It was eventually spotted at a parking lot of a Target.
Officers located the girl inside the store and reunited the child with her family. Police joked about the impromptu joyride and Target run on Facebook, posting:
“Not sure what she bought, or if she was even able to use her Target app to save 5%. We did let her finish her Frappuccino. We’re not mean.”
Police said no one is facing any charges. Remarkably, no injuries were reported during the girl’s shopping expedition. Though she did admit to police she struck a mailbox along the way.
Target sales bounce back with clothes, beauty and lower prices
Target surprised Wall Street on Wednesday, Aug. 21, with a strong second-quarter performance, beating both earnings and revenue expectations. Customer traffic increased across both in-store and online channels, driven by strategic price cuts and new loyalty initiatives. Despite these gains, the company remains cautious about the future, as economic uncertainties and evolving consumer habits present potential challenges.
Target reported earnings per share of $2.57, surpassing the expected $2.18. Revenue came in at $25.45 billion, exceeding the forecasted $25.21 billion. These positive results were bolstered by a 3% rise in apparel sales and strong demand for beauty products. Digital sales grew by 8.7%, driven by same-day services like curbside pickup and home delivery.
“I think we see an incredibly resilient consumer in the face of high inflation and some of the other challenges they have been facing to manage their household budget,” Cornell said.
The retailer introduced several initiatives to drive customer loyalty, such as its Target Circle Week, which attracted over 2 million new members. Additionally, price cuts on 5,000 frequently purchased items, including groceries and diapers, helped draw more shoppers back to stores.
In response to the strong quarter, Target raised its profit forecast for the year, now expecting earnings per share to range between $9 and $9.70, up from its previous estimate. However, the company remains cautious, forecasting full-year comparable sales to range from flat to 2%, with growth likely on the lower end of that spectrum.
“While we’ve been pleased with our performance so far this year, and our view of the consumer remains largely the same, the range of possibilities and the macroeconomic backdrop in consumer data and in our business remains unusually high,” Chief Operating Officer Michael Fiddelke said.
He emphasized the difficulty in predicting consumer behavior in the coming months, even as Target continues to navigate economic challenges.
Walmart stock surges past competitors as shoppers turn to essentials
Walmart is thriving as consumers shift their spending habits, propelling its stock to a record high. This year, Walmart’s stock has surged 29%, outperforming competitors like Target and Home Depot.
Walmart’s recent quarterly earnings surpassed Wall Street expectations, reporting $169.3 billion in revenue. Following these results, the company raised its full-year sales growth forecast. They now expect an increase of up to 4.75%, with earnings growth projected between 6% and 9%. The stock rally boosted the broader market, with The Dow Jones Industrial Average and S&P 500 futures rising nearly 1%.
Walmart, the largest retailer in the U.S., reflects broader consumer trends and remains steady through various economic conditions. Last quarter, Walmart’s U.S. sales increased 4.2%, while digital sales surged 22%. Operating income also rose by 8.5%. CEO Doug McMillon attributes this success to Walmart’s focus on value, which is critical as consumers face ongoing financial pressures.
Walmart has leveraged its pricing advantage, with prices averaging 25% lower than traditional supermarkets. The company has also introduced price reductions on 7,200 items to maintain customer loyalty.
“We aren’t experiencing a weaker consumer overall,” McMillon said in an earnings call. “Customers from all income levels are looking for value, and we have it.”
As inflation causes consumers to rethink luxury purchases like $6 Starbucks coffees and $15 McDonald’s meals, many are turning to Walmart for groceries and essentials. While inflation has eased slightly, financial pressures remain high, driving shoppers toward more economical options.
Walmart has also expanded its customer base, gaining market share with higher-income households. The company’s scale and profitability from higher-margin businesses like advertising have allowed it to reduce prices further. Analyst Michael Baker told CNN, “The only place anyone is shopping right now is Amazon, Walmart, and Costco,” emphasizing the retailer’s value-driven strategy.
Walmart’s stock rally has added nearly $50 billion in market capitalization, about three-fourths of rival Target’s total market value. As consumer spending continues to shift, Walmart’s performance remains a key indicator of economic resilience.
Iran begins funeral services for president killed in helicopter crash
Funeral services for Iran’s president following the deadly helicopter crash are underway. The prosecution rests its case in Trump’s trial as the defense begins to call its witnesses. These stories and more highlight The Morning Rundown for Tuesday, May 21, 2024.
Iran begins funeral services for president killed in helicopter crash
Thousands of supporters have taken to the streets as Iran begins its “five days of mourning,” declared by Supreme Leader Ayatollah Ali Khamenei Tuesday, May 21. The first funeral procession drew in thousands of Iranians to the closest major city to the crash site. The recovered bodies will then be taken to a holy city in the afternoon.
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The defense concluded its cross-examination of the prosecution’s key witness, Michael Cohen, before calling its first witness, Cohen’s former legal advisor Robert Costello. Costello, who will retake the stand Tuesday, May 21, previously advised Cohen.
Costello claimed that in past discussions, Cohen asserted he had no incriminating information on Trump and insisted Trump was unaware of the payments made to Stormy Daniels.
During Costello’s testimony, the judge sustained multiple objections from the prosecution and eventually ordered the jury out of the room after Costello talked over the judge, rolled his eyes and muttered comments.
Meanwhile, Trump’s legal team has moved to dismiss the charges, a request on which the judge has yet to decide. The judge also instructed both sides to prepare for closing arguments next week.
Biden rejects International Criminal Court’s claims of Israel committing genocide
President Joe Biden has sharply criticized a request from an International Criminal Court (ICC) prosecutor for an arrest warrant for several Israeli leaders, including Israeli Prime Minister Benjamin Netanyahu. Speaking from the Rose Garden, Biden said Israel is not committing genocide and dismissed the ICC’s comparison of Israeli defensive actions to Hamas’ atrocities.
“Let me be clear, we reject the ICC application for arrest warrants against Israeli leaders,” Biden stated. “Whatever these words may imply, there is no equivalence between Israel and Hamas. But let me be clear, contrary to allegations against Israel made by the International Court of Justice, what’s happening is not genocide. We reject that.”
The ICC’s top prosecutor has called for global arrest warrants for Netanyahu and Hamas leaders on charges of crimes against humanity, accusing Israel of deliberately targeting civilians in Gaza. Netanyahu has denied the charges, arguing that the prosecutor is wrongly equating Israel with Hamas.
If the court’s judges approve the warrant, Netanyahu could face arrest in any country that is a party to the court, which includes most of Europe.
Federal judge in Texas blocks Biden rule expanding gun background checks
A federal judge in Texas has temporarily blocked a new rule from the Biden administration that intended to close what is referred to as a “gun show loophole.” The rule would require all firearm sellers to be licensed and mandate background checks for buyers.
The rule was scheduled to go into effect Monday, but the judge ruled that the language of the rule intended to protect gun owners was “inadequate.” As a result, its implementation is on hold in Texas until at least June 2.
At least 22 other states have filed similar lawsuits to block the gun law.
Target cuts prices on 5,000 items to attract more shoppers
The move is in response to consumers’ budgetary constraints amid inflation concerns. These discounts apply both in-store and online via Target’s website and app. Notably, this pricing strategy follows Target’s first annual sales decline in seven years, with a 1.7% drop reported for 2023.
The trend of increased frugality among U.S. consumers persists, despite some easing in inflation and stable consumer spending. Other retailers, including Giant Food and Michaels, are also implementing price reductions
OpenAI responds to Scarlett Johansson, pauses ChatGPT voice ‘Sky’
OpenAI has paused the use of “Sky,” a voice in its ChatGPT projects, because it closely resembles Scarlett Johansson’s voice from the film “Her.” The company stated that Sky is actually the natural voice of another professional actress, not an imitation of Johansson.
The resemblance was highlighted after a product demonstration earlier this month, further intensified by CEO Sam Altman’s tweet that referenced the movie “Her.”
In the U.S., Anheuser-Busch faced a significant 9.9% drop in sales volume, largely due to falling Bud Light sales, impacting both retail and wholesale figures.
Industry consultant Bump Williams noted the boycott’s enduring impact, saying the company lost “a whole generation of hard core Bud Light shoppers.” He warned it could take a decade for Anheuser-Busch to win back their loyalty. The company is now focusing on strategies to appeal to younger consumers as they come of age.
Data from Bump Williams Consulting shows that in the last four weeks, Bud Light sales fell by 27.1% year-over-year, while Miller Lite and Coors Light sales increased by 7.8% and 15.3%, respectively.
Last year’s brand backlash extended to Target. The company addressed the controversy over its Pride Month clothing and marketing this week.
The chain announced it is reducing in-store LGBTQ merchandise during Pride Month in response to last year’s controversy. Bloomberg reported that about half of Target’s stores will carry the Pride collection this year.
Civil rights groups criticized Target for succumbing to pressure from anti-LGBTQ customers angered by Target’s Pride Month marketing and merchandise.
Despite the in-store changes, Target continues to offer comprehensive LGBTQ goods online, reaffirming its commitment to the community.
Organized retail crime is spreading fast. Would these solutions stop it?
People have long called shoplifting a victimless crime. Who gets hurt beyond the big-box retailer? As organized retail crime becomes more prevalent, violent and bolder, claims of it being harmless go out the window.
Along with retailers losing tens of billions of dollars a year to organized retail theft, employees have been attacked during “smash and grabs.” Fear then ripples through the stores, and “retail shrink” can result in higher prices for customers.
“These are not victimless crimes, especially in the case where Angelinos are attacked through force or fear,” Los Angeles Mayor Karen Bass said.
Law enforcement cracks down
Los Angeles is afflicted more than any other city in the country, according to the National Retail Federation. Like many other cities and states, this year Los Angeles launched a task force to tackle organized retail crime. It features 22 full-time investigators dedicated to the crime.
“Those who commit these crimes will be caught, they will be held accountable, and we will work to address this issue,” Bass said.
In South Florida in October, following a nine-month multi-agency investigation, authorities charged 14 people with stealing more than $20 million in merchandise this year alone.
“It is well-organized, it is profitable, it is criminal. This is the modern-day mafia and criminal organizations that we’re taking down,” Florida Attorney General Ashley Moody said.
But crime rings are like weeds: Pull one and another pops up. So any crackdown needs to get to the root of the problem: How to deter the crime in the first place.
Store solutions
Retailers have tried solutions like locking up items that are most often stolen. That’s done to their own detriment, according to top retail consultant Burt Flickinger.
“Locking up the merchandise can reduce sales by anywhere from 12 to 20% or more,” Flickinger said.
Another option for retailers is checking receipts at the door.
Would that stop you? No, not at all. What, some lady’s gonna, ‘Hey sir, sir!’ By that time, I’ve already got the stuff in my car and while they’re trying to pull up the phone, I’m already out of the parking lot.
KGW news report
Portland’s KGW reporter Kyle Iboshi recently interviewed convicted felon and retail crime ring leader Martin Castaway in prison. Castaway is serving a 7-year sentence for theft.
“Does the presence of a security officer or loss prevention change your decision whether to go into a store or not?” Iboshi asked.
“Not really. If I see a security dude with a gun, I know he can’t touch me,” Castaway replied.
Castaway said he would have second thoughts about shoplifting only if there was a police officer on the scene.
Police as retail security
In one year, police in the greater Tampa, Florida, region logged nearly 17,000 calls to Walmarts. That’s two calls an hour, every hour, every day, according to a 2016 Tampa Bay Times analysis.
In Clearwater, Walmart called police after a man drank a 98-cent bottle of sweet tea in the store without paying. The police response and subsequent jail time cost taxpayers $1,230, the Times reported.
For years, Walmart’s been criticized for putting too much of its security burden on police.
“Instead of treating security as an expense the way most of the rest of retail does, in Walmart’s defense, treat security as an investment the way Target and Kroger and the independents do so well,” Flickinger said.
The Times analysis showed local Walmarts generated four times as many calls as nearby Targets.
Target, which recently closed nine stores around the country over organized retail crime, says they’ve made significant investments in hiring more security team staff and third-party guard services as well as using theft-deterrent tools.
Walmart, meanwhile, announced plans to reopen an Atlanta-area store that was hit by arsonists last year. When the store opens in May, it’ll have a new feature: a police workstation inside.
“If you’re thinking about you’re going to go into this Walmart and do some shoplifting or a robbery or whatever, you see this APD logo, and you’ll say, ‘Eh, not today,’” Atlanta Mayor Andre Dickens said.
It’s not a solution for every store, and one possible solution isn’t at the store at all.
The online crackdown
The bipartisan INFORM Consumers Act took effect in June. The new law requires online marketplaces to verify and share identifying information on high-volume third-party sellers.
“These scammers are having a heyday, particularly online,” Rep. Jan Schakowsky (D-IL) said. “We want to make sure that we eliminate the opportunity for these…defrauders and scammers to be able to sell online and hold these platforms accountable for checking out who the sellers are.”
“It can make a modest difference on the rogue sellers,” Flickinger said, “but no material changes in reducing crime today.”
Community solutions
Flickinger said the real solutions come from the community, like East Harlem’s Abyssinian Development Corporation, a nonprofit born out of the Abyssinian Baptist Church.
The group helped bring Pathmark to a relative food desert and used profits from the lease to reinvest in housing, economic development and social services.
“An area that everybody said was not saveable because the junkies had wrecked it for 40 or 50 years, and in a matter of a few years, it was first a requiem and then a whole East Harlem Renaissance,” Flickinger said.
The renaissance would last less than two decades. Following a building sale, bankruptcy and a spat between development partners, Pathmark shuttered in 2015, leaving residents with few affordable food options.
This is the final installment of a 3-part series on organized retail crime. Here is Part 1 and Part 2.
The FDA updated the list of eye drop products on Monday, Oct. 30, to include a brand sold by Walmart. According to the FDA Walmart is removing the product from store shelves and its website.
The FDA said using these products could lead to eye infections and result in vision loss or blindness, although there have been no reported cases of infections so far.
The FDA advised manufacturers to recall the products on Oct. 25 after investigators found “unsanitary conditions” and harmful bacteria in the facility that manufactures the eye drops.
“These products are intended to be sterile,” the FDA said. “Ophthalmic drug products pose a potential heightened risk of harm to users because drugs applied to the eyes bypass some of the body’s natural defenses.”
Anyone affected by the latest recalls is urged to contact the FDA.
“FDA encourages health care professionals and patients to report adverse events or quality problems with any medicine to FDA’s MedWatch Adverse Event Reporting program,” an update from the FDA said.
House Republicans propose $14.3 billion in aid to Israel, cut IRS funding: The Morning Rundown, Oct. 31, 2023
House Republicans unveil their plans to send aid to Israel with a bill cutting funding for the IRS. And have you purchased your Halloween candy yet? You might have some sticker shock when you do. These stories and more highlight The Morning Rundown for Tuesday, Oct. 31, 2023.
House GOP unveils $14.3 billion Israel aid bill; cuts IRS funding
Biden’s Inflation Reduction Act, which focused on climate change, health care costs and, taxes, allotted $80 billion in funding for the IRS, for the agency to hire thousands of agents, improve taxpayer services and target wealthy tax evaders.
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In an interview with Fox News on Monday, Oct. 30, Johnson defended the GOP’s bill, saying he knows it will be unpopular with Democrats in the Senate and plans to speak with Senate Majority Leader Chuck Schumer, D-N.Y.
“I understand their priority is to bulk up the IRS. But I think if you put this to the American people and they weigh the two needs, I think they’re going to say standing with Israel and protecting the innocent over there is in our national interest and is a more immediate need than IRS agents,” Johnson said.
Johnson has said he would want aid for Israel and Ukraine to be handled separately.
The House Rules Committee is expected to consider the Republican’s Israel funding bill on Wednesday, Nov. 1. If it passes the House, it would most likely be rejected by the Democratic-controlled Senate and White House.
In a statement, White House Press Secretary Karine Jean-Pierre called the bill a “non-starter.”
Netanyahu rejects calls for ceasefire; Israel frees hostage
Israel’s Prime Minister, Benjamin Netanyahu, said he is rejecting calls for a ceasefire in its ongoing war with Hamas. At a news conference in Tel Aviv on Monday, Oct. 30, Netanyahu said, “Israel will fight until this battle is won…The future of our civilization is at stake.”
Earlier in the day, the Israeli army said during a ground raid in Gaza, it had freed one of the more than 230 hostages taken by Hamas in the deadly terror attacks more than three weeks ago.
Officials said the Israeli soldier was found to be in good condition, and she was reunited with her family. Netanyahu said the soldier’s release a turning point in the war and called for the immediate release of all hostages.
Bankman-Fried is accused of defrauding FTX customers and investors of billions of dollars. In one instance, the prosecution brought up statements he made on social media, promising that customers’ assets would be safe.
Bankman-Fried responded multiple times throughout the questioning with a one-word answer of “yep” or “no.”
He has pleaded not guilty to all fraud and conspiracy charges. If convicted, Bankman-Fried could face decades in prison. The judge in the case has told jurors the trial might wrap up this week.
FDA warns certain over-the-counter eye drops may be contaminated
The Food and Drug Administration is warning consumers to stop using certain over-the-counter eye drops that could cause eye infections. The warning covers 27 eye drop products and includes some marketed under store brands like CVS Health, Rite Aid, Target’s Up and Up and Walmart’s Equate, in addition to drops from Rugby and Velocity Pharma brands.
The FDA advised manufacturers to recall the products on Oct. 25 after investigators found “unsanitary conditions” and harmful bacteria in the facility that manufactures the eye drops.
Cost of Halloween candy rises amid drought conditions
Tonight, Tuesday, Oct. 31, trick-or-treaters will be heading to house after house for some candy and chocolate, free of charge. But those same treats are costing shoppers much more at the grocery store this year.
According to the latest data from the Bureau of Labor Statistics, candy prices are up 7.5% compared to last year. Cocoa prices are trading at a 44-year-high, and global sugar prices are at 12-year highs.
Mexico saw its sugar production fall more than 15% this year due to drought.
Shoppers are expected to spend $3.6 billion on Halloween candy this year, up 16% from last year, per the National Retail Federation. Our business correspondent Simone del Rosario has more spooky stats in her latest Five For Friday.
How old is too old to go trick-or-treating?
If you live in Jacksonville, Illinois, it’s unlawful to trick or treat if you are 13 or older. The law is the same if you’re in Rayne, Louisiana. Until a few years ago, there was a law in Chesapeake, Virginia, from the 1970s threatening jail time for teens who went trick or treating.
The law was never enforced and eventually tossed in 2019, though an amendment did pass saying trick-or-treaters should be 14 years old or younger. Anyone older could be fined up to $250 — but no jail time.
According to a recent NBC News survey, 46% of parents believe children are never too old for trick or treating. The next highest number, 16% of adults, felt the trick or treating should stop around age 17 or 18.
Criminals making millions from running organized retail crime rings
When people think about organized crime, names like Al Capone, Frank Costello and Joe Colombo come to mind. However, brazen mobs plundering stores is the organized crime that is plaguing retailers nationwide.
Organized retail crime is not your average shoplifting transgression. While shoplifting usually refers to small-scale theft for personal gain, organized retail crime involves large-scale crime rings.
“It’s bad for the community, it’s bad for the store, bad for the employers and bad for raising prices,” Burt Flickinger, a top consultant in retail and managing director of Strategic Resource Group, said.
“A relatively smart criminal can make $200,000 a year or more in cash just by selling what that person steals from one store every day,” Flickinger said. “Or if that person steals from a few to five stores every day, that person could net close to half a million or more on an annual basis from store crime and street resale.”
Florida drug recovery pastor Robert Dell is accused of preying on his flock to run a retail theft crime ring, targeting Home Depots in the region five to six times a day.
Prosecutors said Dell sold the scores on his eBay account. Home Depot suspects he’s been targeting stores for a decade to the tune of $5 million in losses.
“There aren’t that many more criminals, it’s just easier to steal more per criminal per day, and that’s why the numbers have gone up so much,” Flickinger said.
Executives are sounding the alarm on organized retail crime, with mentions of “shrink” in second-quarter earnings calls — nearly double what they were the quarter before and four times what it was one year ago, according to a Bloomberg analysis of Russell 3000 companies.
The National Retail Federation (NRF) says shrink is a $112 billion problem in fiscal year 2022, up significantly over the past decade. However, when looking at the percentage of total retail sales, 2022’s 1.6% is in line with 2019 and 2020.
Shrink numbers consist of much more than organized retail crime (ORC). External theft, including ORC, accounts for 36% of a retailer’s shrink figure. Internal (employee) theft is 29%, while retailer process, control failures and errors account for 27%, according to NRF data.
That doesn’t mean organized retail crime isn’t a big ordeal. More than two-thirds of responding retailers told the NRF these criminals are more violent than one year ago.
“We cannot continue operating these stores because theft and organized retail crime are threatening the safety of our team and guests,” Target said in a statement.
In May, Target said worsening organized retail crime would result in $500 million more in losses this year than last, putting total losses at an estimated $1.2 billion or more for the year.
