July 6, 2020

Jobs Reports Lift Wall St. to Slight Gain

More evidence of improving job growth helped the stock market post slim gains on Thursday, but it weighed on the bond market, where the yield on the Treasury’s 10-year note jumped to 3 percent for the first time in more than two years.

The Labor Department reported that the four-week average of applications for unemployment benefits fell to its lowest point since October 2007, two months before the recession officially began. And a survey from the payroll company ADP showed that American businesses added 176,000 jobs in August.

The encouraging news came a day before the government reports on employment growth in August. Many investors believe that solid growth will prompt the Federal Reserve to start tapering off its economic stimulus program later this month.

The Fed’s stimulus has helped drive a bull market in stocks that has lasted more than four years.

The improving job market means that “the Fed probably lays out a tapering schedule in September,” said Philip J. Orlando, chief equity strategist at Federated Investors.

While stock trading may be volatile in the coming weeks, Mr. Orlando said, investors will ultimately see the reduced stimulus as a positive sign because it means that the economy is strong enough to expand without the Fed’s help. “It should leave stocks in great shape,” he said

The Dow Jones industrial average rose 6.61 points, or less than 0.1 percent, to close at 14,937.48. The Standard Poor’s 500-stock index rose 2 points, or 0.1 percent, to 1,655.08. The Nasdaq composite index gained 9.74 points, or 0.3 percent, to 3,658.78.

Some retail stocks were among the bigger gainers for the day. Costco rose $3.12, or 2.8 percent, to $114.62 after the discount store chain said revenue at stores open at least a year rose 4 percent in August, slightly faster than Wall Street’s expectations. Walgreens rose 70 cents, or 1.4 percent, to $50.19 after reporting a 4.8 percent increase in sales last month.

In government bond trading, the price of the Treasury’s 10-year note fell 26/32, to 95 25/32, while its yield climbed to 3 percent, from 2.90 percent late Wednesday. The 10-year yield is the highest it has been since late July 2011, as bond traders anticipate that the Federal Reserve will cut back on its stimulus. The yield has risen sharply from a recent low of 1.63 percent in early May.

Rising yields on Treasury notes over the last few months have pushed up mortgage rates and other interest rates. The average fixed rate on a 30-year mortgage rose to 4.57 percent this week.

Stocks slumped in August, partly because of investors’ concern that the Fed would start winding down its stimulus program and higher interest rates would harm the economy. The S. P. 500 index fell 3.1 percent in August, its biggest monthly decline since May 2012.

It appears, however, that investors are getting more comfortable with higher borrowing costs.

“We don’t anticipate that a gradual rise in rates will choke off the economy,” said David W. Roda, regional chief investment officer for Wells Fargo Private Bank. “We are still looking at very low rates historically.”

Among the stocks on the move on Thursday, Conn’s fell $7.95, or 12 percent, to $60.36 after the consumer finance company reported second-quarter earnings that missed Wall Street expectations.

Groupon rose 36 cents, or 3.5 percent, to $10.66 after Morgan Stanley raised its recommendation on the stock to “overweight” as the company adjusted its business model.

Article source: http://www.nytimes.com/2013/09/06/business/daily-stock-market-activity.html?partner=rss&emc=rss

Advertising: Vintners Offer Wines in Boxes, Cans and Plastic Cups

PERSUADING consumers to drink anything other than bottled wine is an uphill climb. Glass bottles are the gold standard, so newer brands are turning to sleek, eco-friendly containers and promoting them through social media to reach younger wine drinkers.

Those in the millennial age group, between 21 and 34, are the target because they have grown up drinking from plastic and are less wedded to traditional wine rituals. And some 51 percent of them drink wine at least once a week, according to data from the Wine Market Council.

Already on some shelves is wine in boxes, in aluminum cans and in plastic. Last month, Southwest Wines in Deming, N.M., began selling wine blends in aluminum containers. Constellation Wines is offering its Black Box brand in mass market outlets like Costco.

As the industry broadens its offerings, some of the innovators are not vintners, but packaging experts who are bringing their expertise to the way wine reaches consumers.

Last spring, Stacked Wines, based in California, introduced individually packaged, stemless plastic cups, which stack vertically and contain chardonnay, merlot and other wines. Matt Zimmer, a mechanical engineer who worked in the bottled water industry for more than six years, came up with Stacked Wines’ packaging.

“We see an industry trend to more convenient packaging,” said Mr. Zimmer, Stacked Wines’ chief executive. He began the company, in Anaheim, with M.B.A. classmates from the University of California, Irvine.

Another entrant in the wine business, Eric Steigelman, a graduate of the Rochester Institute of Technology, drew on his background in flexible product packaging to design a pouch for his Bonfire Wines.

“Millennials are interested in convenience and availability, and some areas like soup and baby foods have been moving to pouches,” said Mr. Steigelman, in Chicago. “Wine seemed to be an area that was looking for innovation, but little had been done.”

The biggest challenge to gaining consumer confidence has been overcoming the perception that wine should come only from a bottle. Wine in other packaging has long been lumped into the undrinkable or barely acceptable category, although some boxed wines are becoming more popular.

Wine drinkers tend to be explorers and frequently decide what to purchase while in the store, unlike other buyers of alcoholic beverages, who settle on their brands in advance, according to a study released this month by Nielsen North America Consumer Group.

New brands emphasize packaging for people who want lightweight, portable and easily consumed wine. Stacked Wines, which is expanding its distribution from California to 46 states starting in January, is using its national introduction as an opportunity to revamp its label to better explain its product, according to Jodi Wynn, a co-founder.

Stacked Wines’ consumers simply unseal the package and drink, with no wine glasses or corkscrew required. The four sealed portions, made using the company’s trademarked Vinoware, fit atop one another. Each holds the equivalent of a glass of wine, and the four combined equal a 750-milliliter bottle. There is no spoilage because the wine is packaged in individual amounts. The company charges about $15 for a stack.

For Bonfire Wines, Mr. Steigelman chose a pouch — which prevents air from oxidizing and spoiling wine — made from federally approved food-grade materials. The pouches are black with a broad stripe of vibrant color running horizontally, and were designed by Planet Studio, a design and marketing company in Atlanta.

To arrive at packaging that would be noticed amid the proliferation of bottles, Gene Keserica, Planet Studio’s creative director, said his team chose fluorescent colors because “we saw that as a way for the packaging to be eye-catching — if you can make someone pause, that gives you a split second to get your message over.”

The label’s look “can have significant influence on a purchase,” said David Turner, president of Turner Duckworth, a brand identity and packaging design agency in San Francisco and London. “Beverage packaging is not purely functional, but a way of reaching your buyer.”

Bonfire Wines is highlighting the portability of its pouch for those who like to share the experience of drinking wine with others. To enhance interaction, Mr. Steigelman added a quick response, or QR, code to each pouch for mobile-phone-carrying buyers to react to what they are drinking and keep in touch with the brand.

The Bonfire wines are produced by Kevin McGuire, a California winemaker, said Mr. Steigelman, who has not yet set a price for them.

After tasting Bonfire’s Ember sweet red wine blend or its Ignite sweet white wine blend, buyers can register their preferences for the next type of wine the company will offer.

Engaging the buyer is important because with such a profusion of label choices, wine buyers can be influenced by samples, promotions and advertising, according to the Nielsen study, titled “Exploring the Alcohol Beverage Consumer’s Mind-Set.”

Brands like Stacked and Bonfire (which is not yet on the shelves) have tiny marketing budgets. To generate, and keep, an audience of dedicated buyers, they are focusing on tastings at locations like local arts and music festivals, and on social media like Facebook, Pinterest, Instagram and Twitter.

After spending more than a year choosing his wine, packaging and design, and obtaining his liquor licensing, Mr. Steigelman is missing 2012’s top alcohol sales period and will not be selling his pouches until spring.

“So few companies manufacture pouches,” Mr. Steigelman sighed, “and, for now, they are all booked up.”

Article source: http://www.nytimes.com/2012/12/26/business/media/to-reach-younger-buyers-vintners-rethink-their-packaging.html?partner=rss&emc=rss

You’re the Boss Blog: There’s a Great Way Big Businesses Could Help Small Businesses

Carlene O'Garro and Jim Koch inside the kitchen at Boston Beer Company.Gretchen Ertl for The New York Times Carlene O’Garro and Jim Koch inside the kitchen at Boston Beer Company.

The Agenda

How small-business issues are shaping politics and policy.

We have just published an article exploring what appears to be a burgeoning trend among big businesses: helping small businesses — with loans, mentoring, new opportunities and sometimes a combination of all three. While the story focuses on the efforts of Boston Beer Company, large companies across the commercial spectrum, including financial giants and national retailers, have joined in.

But if you ask Matthew Griffin, a small-business owner in Carmel, Ind., what’s the best thing big businesses can do to help small businesses, he would probably say: pay their bills promptly.

Mr. Griffin, owns Baker’s Edge, which makes serpentine baking pans (“The Brownie Pan for Edge Lovers!”) sold at specialty kitchen stores and some catalogs. In 2009, he said, several of the retailers he sells to announced in mid-contract that they were changing their payment terms to 90 days from 30 days, which had been standard. Another one of his retailers, Costco Wholesale, Mr. Griffin said, insisted from the outset that it would pay bills in 60 days.

“I’m burning up my line of credit, paying interest, and they’re dragging their feet,” said Mr. Griffin, who employs two people directly and said he supports the equivalent of another three to six jobs at the contract factory in Minnesota that makes his pans. “You’re the smallest guy on the totem pole, and you feel like you’re carrying the largest amount of risk and debt to feed the larger beast.”

In recent years, giant companies — and not just retailers — have used their size to rewrite the rules for paying the small businesses that supply them with inventory, products for own their use, and services. And though Mr. Griffin first noticed this after the recession hit, many of the companies engaging in this practice are not exactly hard up for cash.

In early 2011, Jeffrey Leonard, a clean-tech private equity fund manager, wrote in the Washington Monthly that Cisco Systems was increasing its payment time from 30 to 60 days, despite handsome profits and nearly $39 billion in cash on its balance sheet. In June, the Wall Street Journal reported that Apple, Wal-Mart, and Ford Motor Company were among corporations that had increased the amount of time they take to pay vendors. And Costco, which takes 60 days to pay Mr. Griffin, has about $5 billion on hand.

Alan Bubitz, a vice president and general merchandise manager at Costco, said that at that store, payment times to vendors are negotiated and are generally tied to the time it takes to sell the merchandise. “We want to sell the merchandise before we have to pay for it, and in essence the vendor will fund the inventory,” Mr. Bubitz said. “So if it takes us 60 days to sell the merchandise, and he wants to be paid in 10, we’re sitting on the cost of money. It’s not a very good way to do business.”

The founder of Boston Beer, Jim Koch, said that when he was starting out, he, too, had difficulty getting customers to pay, which of course rankled him, since many of his customers were “large, well-capitalized businesses, while I was scrounging for money and paying credit card rates.”

His solution? He asked his customers if they would pay him in five days rather than 30, just for the first year. “I would explain to them, I’m just starting out,” he said, “I’m solid — ’cause you don’t want them to think you’re going to go broke — but if you pay me faster, I’m going to put it back into Sam Adams, and you’ll make more money selling it.”

More often than not, Mr. Koch said, simply posing the question worked. If it didn’t, he’d offer a 1- percent discount for a five-day payment. “Every company has standard practices around this sort of thing. It doesn’t mean it’s not negotiable,” Mr. Koch said. “There’s always someone with discretion, to help you out. Most small businesses don’t ask, and if they do, they take the first no. Generally, the first person you deal with doesn’t have the discretion to change the policy. Don’t take no from somebody who’s not authorized to say yes.”

You’re more likely to get that yes, Mr. Koch said, if you couch the proposition in “win-win” terms. “It doesn’t have to be business or financial — it can be a good deed,” he said. “It makes people feel good to say yes. And as a customer, they generally want to see you succeed.”

As for the terms Boston Beer sets for its own vendors, a spokesman e-mailed to say that payment is on average 45 days, “but there is a significant range around that average.” In our conversation, Mr. Koch said that payment varied by the type of transaction. “Some people you E.F.T.” — electronic funds transfer — “money right away, some you pay in 30 days, some we pay in 60 days.”

But, he said, the distinction is not based on the vendor’s size. And “if somebody asks us to pay them early, then we’ll pay them faster,” he continued. “We might ask for a 1-percent discount. But like most things, it’s ultimately negotiable.”

What’s been your experience? Are you having problems getting big companies to pay quickly? Have you tried to negotiate with them? And what do you make of Boston Beer’s efforts to help small food and beverage businesses?

Article source: http://boss.blogs.nytimes.com/2012/11/14/theres-a-great-way-big-businesses-could-help-small-businesses/?partner=rss&emc=rss

An October Lift for Retailers, but Storm’s Effects Will Come Next Month

Results tallied Thursday from the 18 national retailers tracked by Thomson Reuters showed an average increase of 2.7 percent in sales at stores open at least a year. The results largely excluded the effects of the hurricane.

Without the Rite Aid drugstore chain, though, that figure would have been 4.7 percent, above analysts’ expectations of a 4.3 percent increase. Rite Aid saw a decline mainly because of a shift toward cheaper generic drugs.

“You’re seeing solid single-digit numbers not just one month but consistently for the past few months,” said Madison Riley, managing director at the retail consulting firm Kurt Salmon. “It reflects a steadily improving economy and therefore, steadily improving consumer confidence.”

Still, all retailers’ eyes were on the impact of Hurricane Sandy. Most retailers’ fiscal October ended on Saturday, so while a few stock-up trips made it into the October results, most of those, along with poststorm spending and the impact of store closures, were not included in October results.

Some analysts have said that consumers may direct their money toward home repairs in the storm’s wake, rather than toward early holiday shopping. However, home improvement retailers and discounters might benefit from shopping for storm supplies.

Categories as various as department stores, discounters and apparel retailers all posted good results. “What I find intriguing and encouraging is it’s not isolated,” Mr. Riley said, “but it’s across the industry.”

Stores for those on a budget continued to shine, like Costco, with a 7 percent increase, and the Nordstrom Rack division of Nordstrom, which posted its highest same-store sales increase of the year. The Rack’s same-store sales rose 10.5 percent, while Nordstrom over all posted a 9.8 percent increase.

Kohl’s, which had been struggling to meet analysts’ sales expectations this year, surpassed them on Thursday, with sales increasing 3.3 percent, versus analysts’ estimates of a 1.1 percent gain. The company said sales of children’s merchandise were stronger than everything else.

Macy’s also exceeded analysts’ expectations, with a 4.1 percent increase versus the 3.1 percent analysts had projected. The company raised its same-store sales guidance for the second half of this year to about 4 percent, up from 3.7 percent, despite the storm’s impact. Macy’s noted that about 200 Macy’s and Bloomingdale’s stores had to close anywhere from a few hours to multiple days as a result of the storm, but added that “the company is confident that it can make up some or most of the lost sales through the remainder of the quarter.”

Target had a rare miss, with a 2.4 percent increase versus the 3.2 percent analysts had expected. The company did not give a clear reason for the results, saying in a release that they were “near the low end of our expected range.”

The biggest decline came from the teenage-apparel retailer Wet Seal, which was troubled by management churn and sliding sales. Same-store sales declined 7.6 percent, which was actually less steep than the 10.5 percent drop that analysts had expected.

Same-store sales at Rite Aid dropped 1.1 percent, largely because customers chose cheaper generic prescriptions over name-brand ones. (Walgreens, the other drugstore chain reporting monthly same-store sales, will do so next week.)

Retail analysts were already looking ahead to the storm’s effect on November sales. A Citi analyst, Deborah Weinswig, wrote in a research note that discounters could see a slight lift as people restocked supplies after the storm. But department stores that depend on New York City will be hit, she said — she estimated that Saks derives 22 percent of sales from its Manhattan flagship, and Macy’s gets 8 percent of sales from its New York City-area stores. Ms. Weinswig wrote that “the cost of cleanup and repairs from the hurricane could take money away from holiday purchases, which puts early holiday sales at risk.”

But Mr. Riley, the retail consultant, said the storm had arrived early enough to give people plenty of time to shop for holiday items. “It’s a timing issue, as opposed to ‘It’s going to affect the holiday season,’ ” he said.

Article source: http://www.nytimes.com/2012/11/02/business/economy/retailers-report-an-upbeat-october.html?partner=rss&emc=rss

Bucks: Customer Service, Ranked Either ‘Naughty’ or ‘Nice’

For a second year, Consumer Reports has compiled a holiday report card of customer service policies that it deems either “naughty” or “nice.”

The warehouse store Costco and the outdoor outfitter Orvis make encore appearances on the “nice” list, while other companies have been moved to the “naughty” category (Southwest Airlines). And this year’s list contains some, well, counterintuitive entries. Live Nation, the ticket seller, and the cable provider Cablevision, for instance, made the “nice” list. (Verizon Wireless, meanwhile, was again deemed “naughty.”)

The list is not meant to be a “thumbs up or thumbs down” on the companies as a whole, said Tod Marks, senior editor and resident shopping expert at Consumer Reports. “It’s a list that’s compiled based on specific policies that we thought were particularly customer friendly — or not,” Mr. Marks said.

Here’s the full list, along with an explanation of the reasoning behind the company’s inclusion, starting with the “naughty” roster:

  • AirTran The discounted coach and sale fare flights on the Orlando-based airline don’t include the price of selecting the seat. If you want to select your seat when you book online, AirTran charges $6 to $20 –each way.
  • RadioShack When a Consumer Reports reader shopped for an HDMI audio-video cable, Mr. Marks said, the store price was nearly double the online price. A customer service supervisor said he couldn’t do anything about the discrepancy, and directed the reader to the fine print on RadioShack’s Web site. (The company acknowledges that it sometimes charges different prices for the same item.)
  • American Apparel The retailer, based in Los Angeles, has two different return policies. Online customers have 45 days to return an item for a full refund or credit; store customers have 30 days and receive a merchandise credit.
  • Verizon Wireless. The company has told the Federal Communications Commission that it voluntarily provides ample warning to customers who seem about to exceed their monthly allotment of minutes, messages or data, so a rule requiring it to issue such alerts isn’t necessary. But Consumer Reports says two staff members who are Verizon customers recently were notified only after they went over their allotment, at which time the company tried to sell them a pricier plan. (It now looks as if protection from “bill shock” is on its way. Under a mid-October deal with the Federal Communications Commission, members of CTIA-The Wireless Association, a trade group representing 97 percent of wireless carriers, agreed to begin issuing alerts of impending overages. But the companies are not required to fully apply the alert system until April 2013.)
  • Liberty Travel It offers a three-night Disney vacation package, including air fare, theme park ticket and some food, starting at $559 a person. But the tiny type at the bottom of the advertisement says the price excludes taxes and fees of up to $250, baggage fees or other fees charged by the airline. And if someone needs to switch a flight? It’ll cost as much as $200 extra.
  • The Swiss Colony. Like many businesses, the 85-year-old mail-order food firm, based in Wisconsin, ties its delivery fees to the dollar amount of an order rather than the size and weight of the package — a practice Consumer Reports has criticized before. So if an order totals $25, shipping and processing is $5.95. But if the order costs a penny more, the freight jumps to $7.95. Plus, Swiss Colony asks customers to pay another $2.99 per shipping address, for unspecified reasons. When Consumer Reports called the company for an explanation, the customer service representative said the surcharge reflects the cost of a mailing label.
  • Southwest Airlines Want to complete online check-in earlier than the usual 24 hours before takeoff? Improve your boarding group position? Get a better seat (Southwest doesn’t assign seats; it’s first come, first served)? Sure, but any of those options will cost you an extra $10.
  • SiriusXM If a subscriber to this satellite radio provider wants to receive a bill in the mail and pay by check, he or she will face a $2 surcharge every month. (The penalty can be avoided if the customer gives Sirius credit card information and elects to be billed electronically on a recurring basis.)
  • GameStop This video game software and hardware merchant has a laundry list of conditions governing returns and exchanges. And in the end, GameStop proclaims, “We reserve the right to refuse any return.”

And now, the “nice” list:

  • Bi-Lo Most supermarkets will refund the purchase price of a product that doesn’t meet expectations. This Southern chain offers a double money-back guarantee on every item it sells, whatever the reason for the return.
  • Cablevision Telecommunications companies are a frequent target of consumer displeasure, but this industry giant offers more to subscribers who sign up for its Optimum Triple Play — Internet, phone, and television service. Perks include free movie tickets on Tuesdays and deeply discounted tickets on other days. Plus, customers who sign up for Cablevision’s free Optimum Rewards program get discounted popcorn and soda at participating theaters.
  • Live Nation The live-entertainment promoter, ticket distributor and artist-management firm gives fans three days to cancel their ticket order and get a refund at participating venues (typically until one week before the event). Live Nation also lets customers exchange seats for better ones that become available after a purchase.
  • American Express  If a cardholder buys a covered item with his or her American Express card and unsuccessfully tries to return it within 90 days, American Express can refund the full purchase price, up to $300 ($1,000 per account per year).
  • Orvis This seller of fishing gear and outdoorsy clothes offers help if an online customer lingers on a product long enough, initiating dialogue via live chat.
  • Crutchfield The electronics merchant offers help with installation, setup and troubleshooting around the clock, and technical support at no extra charge, for the life of the gear purchased.
  • Costco The chain automatically extends the manufacturer’s original warranty on TVs and computers to two years from the date of purchase.
  • Amazon.com Has taken a stand against wasteful and hard-to-open product packaging. It encourages customers to share photographs and feedback with manufacturers, who can then modify their package designs and submit them to Amazon’s engineers to see if they qualify as frustration-free. If so, the companies can use the “Certified Frustration-Free” logo as a marketing tool.
  • Microsoft If someone buys and installs software on his or her computer, most retailers won’t give a refund, no matter how much the customer hates the product. But consumers dissatisfied with a Microsoft software or hardware purchase from any retailer can send it back to the company within 45 days for a refund and reimbursement of shipping costs up to $7.
  • REI The outdoor outfitter has one of the most liberal return policies around. It accepts returns or exchanges at any time for any reason, and makes the process simple. Customers can return any item by mail or to any REI store, whether they bought online, by mail or in an REI store. The policy even applies to goods bought from REI’s online outlet.

Do you have your own candidates for the “naughty” or “nice” list? Let us know why in the comments section.

Article source: http://feeds.nytimes.com/click.phdo?i=f29bbcadfce6323817a00286bc45c893

Economic Reports This Week

CORPORATE EARNINGS Companies reporting will include Campbell Soup (Monday); Medtronic (Tuesday); Costco Wholesale and Hormel Foods (Wednesday); and Tiffany (Thursday).

IN WASHINGTON A Senate Banking subcommittee will conduct a hearing about derivatives clearinghouses; a House Judiciary subcommittee will hold a hearing about digital security; (Wednesday). A House Financial Services subcommittee will conduct a hearing about oversight of the Federal Deposit Insurance Corporation; the Senate Banking Committee will hold a hearing on proposals for the future of housing finance; and a House Judiciary subcommittee will hold a hearing on the competitive effects of the proposed merger of ATT and T-Mobile (Thursday).

OVERSEAS President Nicolas Sarkozy will host technology leaders in Paris (Tuesday and Wednesday). Secretary of State Hillary Rodham Clinton, Mr. Sarkozy and Chancellor Angela Merkel of Germany will attend the annual forum of the Organization for Economic Cooperation and Development in Paris (Wednesday and Thursday). Group of 8 leaders will meet in Deauville, France (Thursday and Friday).

Article source: http://feeds.nytimes.com/click.phdo?i=c9c5a54bbde9a1c0baeadde5acbc3ee3