Jan 9 (Reuters) – Beverage giants Coca-Cola Co (KO.N) and PepsiCo Inc (PEP.O) are under preliminary investigation by the U.S. Federal Trade Commission (FTC) over potential price discrimination in the soft drink market, Politico reported on Monday citing sources.
The pricing strategies of both companies are being scrutinized under the Robinson-Patman Act, the report said.
The U.S. antitrust law prevents large franchises and chains from engaging in price discrimination against small businesses.
The FTC reached out to large retailers, including Walmart Inc (WMT.N), for at least a month seeking data and other information on how they purchase and price soft drinks, two of the sources told Politico. Walmart is currently not a target in the investigation, according to the report.
FTC, Coca-Cola, Pepsi and Walmart did not immediately respond to Reuters’ request for comments.
Reporting by Shivani Tanna in Bengaluru; Editing by Sherry Jacob-Phillips
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NEW YORK/SAN FRANCISCO, Dec 16 (Reuters) – PepsiCo plans to roll out 100 heavy-duty Tesla Semis in 2023, when it will start using the electric trucks to make deliveries to customers like Walmart and Kroger, the soda maker’s top fleet official told Reuters on Friday.
PepsiCo Inc (PEP.O), which ordered the big trucks in 2017, is purchasing them “outright” and is also upgrading its plants, including installing four 750-kilowatt Tesla Inc (TSLA.O) charging stalls at both its Modesto and Sacramento locations in California, PepsiCo Vice President Mike O’Connell said in an interview. A $15.4 million state grant and $40,000 federal subsidy per vehicle helps offset part of the costs.
“It’s a great starting point to electrify,” said O’Connell, who oversees the company’s fleet of vehicles.
“Like any early technology, the incentives help us build out the program,” he said, adding that there were “lots” of development and infrastructure costs.
PepsiCo is the first company to experiment with the battery-powered Tesla Semis as a way of cutting its environmental impact. read more
United Parcel Service Inc (UPS.N) and food delivery company Sysco Corp (SYY.N) have also reserved the trucks, while retailer Walmart Inc (WMT.N) is testing alternatives.
PepsiCo’s plans to use the Semis have been reported, but O’Connell provided new details on how the company is using them and its timeline for deploying them. Tesla Chief Executive Elon Musk initially said the trucks would be in production by 2019, but that was delayed due to battery constraints.
PepsiCo said it plans to deploy 15 trucks from Modesto and 21 from Sacramento. It is unclear where the others will be based but O’Connell said the firm is targeting rolling out the Semis in the central United States next, and then the East Coast.
The company’s Frito-Lay division sells lightweight food products, making it a good candidate for electric trucks, which have heavy batteries that could limit cargo capacity.
The Semis will haul Frito-Lay food products for around 425 miles (684 km), but for heavier loads of sodas, the trucks will initially do shorter trips of around 100 miles (160 km), O’Connell said. PepsiCo then will also use the Semis to haul beverages in the “400 to 500 mile range as well,” O’Connell said.
“Dragging a trailer full of chips around is not the most intense, tough ask,” said Oliver Dixon, senior analyst at consultancy Guidehouse.
“I still believe that Tesla has an awful lot to prove to the broader commercial vehicle marketplace,” Dixon said, citing Tesla’s unwillingness to offer information on payload and pricing.
PepsiCo has earmarked some of the trucks planned for the Sacramento location to make deliveries to Walmart and grocers such as Kroger Co (KR.N) and Albertsons Cos Inc (ACI.N). The trucks at the Modesto Frito-Lay plant have just gone to PepsiCo distribution centers, O’Connell said.
All of the Semis going to PepsiCo will have a 500-mile (805-km) range. O’Connell added that he is not aware of when Tesla will start deploying 300-mile (480-km) trucks. When Tesla starts building them, PepsiCo “will rotate those up” into its fleet, he said.
PepsiCo declined to share details on the price of the trucks, a figure that Tesla has kept quiet. Competing vehicles sell for $230,000 to $240,000, said Mark Barrott of consulting firm Plante Moran. He added that the 500-mile range Tesla Semi could be priced higher because its 1,000-kilowatt-hour (kWh) battery pack is about twice the size of many of its rivals.
“We keep the trucks for a million miles, seven years,” O’Connell said. “The operating costs over time will pay back.”
The Gatorade maker declined to share specifics on the weight of the trucks, another closely guarded secret by Tesla.
He said Tesla did not help pay for the trucks’ megachargers but provided design and engineering services for the facilities, which come with solar and battery storage systems.
O’Connell said that a 425-mile (684-km) trip carrying Frito-Lay products brings the Semi’s battery down to roughly 20%, and recharging it takes around 35 to 45 minutes.
Reporting by Jessica DiNapoli in New York and Hyun Joo Jin in San Francisco; additional reporting by Joe White and Siddharth Cavale; Editing by Jonathan Oatis and Rosalba O’Brien
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Jessica DiNapoli
Thomson Reuters
New York-based reporter covering U.S. consumer products spanning from paper towels to packaged food, the companies that make them and how they’re responding to the economy. Previously reported on corporate boards and distressed companies.
Tesla ships first Semi to PepsiCo five years after unveiling it
No details on orders or capacity for electric truck
Semi uses existing Tesla motors, to feature new Supercharger
Dec 1 (Reuters) – Tesla Inc (TSLA.O) Chief Executive Elon Musk delivered the company’s first heavy-duty Semi on Thursday to PepsiCo (PEP.O) without offering updated forecasts for the truck’s pricing, production plans or how much cargo it could haul.
Musk, who appeared onstage at an event at Tesla’s Nevada plant, said the battery-powered, long-haul truck would reduce highway emissions, outperform existing diesel models on power and safety and spin-off a fast-charging technology Tesla would use in its upcoming Cybertruck pickup.
“If you’re a trucker and you want the most badass rig on the road, this is it,” Musk said, noting that it was five years since Tesla had announced it was developing the all-electric truck. Still, industry experts remain skeptical that battery electric trucks can take the strain of hauling hefty loads for hundreds of miles economically.
At Musk’s first Tesla reveal since taking over Twitter – an acquisition some investors worry has become a distraction – the company did not announce pricing for the Semi, provide details on variants of the truck it had initially projected or supply a forecast for deliveries to PepsiCo or other customers. Tesla said it would begin using the Semi to ship parts to its plant in Fremont, California.
In 2017, Tesla had said the 300-mile range version of the Semi would cost $150,000, and the 500-mile version $180,000, but Tesla’s passenger electric vehicle prices have increased sharply since then.
Robyn Denholm, chair of Tesla, recently said the automaker might produce 100 Semis this year. Musk has said Tesla would aim to produce 50,000 of the trucks in 2024.
PepsiCo, which completed its first cargo run with the Tesla truck to deliver snacks for those attending the Nevada launch event, had ordered 100 trucks in 2017.
Brewer Anheuser-Busch (ABI.BR), United Parcel Service Inc (UPS.N) and Walmart Inc (WMT.N) were among other companies that had reserved the Semi. Tesla did not provide details on orders or deliveries to customers, nor an estimate on what the total cost of ownership for future buyers would be compared to diesel alternatives.
‘NOT IMPRESSIVE’
Musk said the Semi has been doing test runs between Tesla’s Sparks, Nevada factory and its plant in Fremont, California. Tesla said it had completed a 500-mile drive on a single charge, with the Semi and cargo weighing in at 81,000 pounds in total.
Tesla did not disclose the weight of an unloaded Semi, one key specification analysts had hoped to learn and an important consideration for the efficiency of electric trucks.
Musk has spoken in the past about the prospect of fully autonomous trucks. Tesla did not provide details on how Tesla’s driver assistance systems would function in the Semi it unveiled on Thursday or future versions.
[1/5] Tesla Chief Executive Elon Musk waves near Tesla Semi electric trucks during a live-streamed unveiling in Nevada, U.S. December 1, 2022, in this still image taken from video. Tesla/Handout via REUTERS
The Semi delivery presentation ended without Musk taking questions, as he often does at Tesla events.
“Not very impressive – moving a cargo of chips (average weight per pack 52 grams) cannot in any way be said to be definitive proof of concept,” said Oliver Dixon, senior analyst at consultancy Guidehouse.
Tesla had initially set a production target for 2019 for the Semi, which was first unveiled in 2017. In the years since, rivals have begun to sell battery-powered trucks of their own.
Daimler’s (MBGn.DE) Freightliner, Volvo (VOLVb.ST), startup Nikola (NKLA.O) and Renault (RENA.PA) are among Tesla’s competitors in developing alternatives to combustion-engine trucks.
Walmart (WMT.N), for instance, has said it has been testing Freightliner’s eCascadia and Nikola’s Tre BEV trucks in California.
‘LIKE A CHEETAH’
The Semi is capable of charging at 1 megawatt and has liquid-cooling technology in the charging cable in an updated version of Tesla’s Supercharger that will be made available to the Cybertruck, Musk said. The Cybertruck is scheduled to go into production in 2023.
Trucks in Semi’s category represent just 1% of U.S. vehicle sales but 20% of overall vehicle emissions, Tesla said.
Tesla said other, future vehicles would use powertrain technology developed for the Semi without providing details. The Semi uses three electric motors developed for Tesla’s performance version of its Model S, with only one of them engaged at highway speed and two in reserve for when the truck needs to accelerate, a feature that makes the truck more energy-efficient, Musk said.
“This thing has crazy power relative to a diesel truck,” Musk said. “Basically it’s like an elephant moving like a cheetah.”
In a slide displayed as part of Musk’s presentation, Tesla showed an image of a future “robotaxi” in development with a mock-up of the future car covered under a tarp.
The presentation took place after Tesla shares closed at $194.70. The stock has fallen about 45% so far this year, losing about $500 billion in market capitalisation, down to about $615 billion.
Among factors cited by investors have been Musk’s sales of Tesla shares to finance his takeover of Twitter, signs that a slowing global economy has started to cut into demand for Tesla’s premium-priced cars, and a warning by the company that it might not meet its target to grow deliveries by 50% this year.
Reporting by Akash Sriram in Bengaluru and Hyunjoo Jin in San Francisco; Editing by Kenneth Maxwell
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Nov 1 (Reuters) – Tesla (TSLA.O) aims to start mass production of its Cybertruck at the end of 2023, two years after the initial target for the long-awaited pickup truck Chief Executive Elon Musk unveiled in 2019, two people with knowledge of the plans told Reuters.
Tesla said last month that it was working on readying its Austin, Texas plant to build the new model with “early production” set to start in the middle of 2023. “We’re in the final lap for Cybertruck,” Musk told a conference call with financial analysts.
A gradual ramp in the second half of next year to full output for the sharp-angled electric truck would mean that Tesla would not be recording revenue until early 2024 for a full-quarter of production on a new model seen as key to its growth.
It would also mean a wait of another year for the estimated hundreds of thousands of potential buyers who have paid $100 to reserve a Cybertruck in one of the most highly anticipated, and closely tracked electric vehicle launches ever.
Tesla did not immediately respond to a request to comment.
It has not announced final pricing on the Cybertruck, showed the production version of the vehicle or specified how it will manage the battery supply for the new model.
In 2019, Tesla had projected an initial price of under $40,000, but prices for new vehicles have shot higher since then and Tesla has raised prices across its lineup.
CRACKED WINDOWS
Tesla’s Cybertruck is displayed at Manhattan’s Meatpacking District in New York City, U.S., May 8, 2021. REUTERS/Jeenah Moon
Musk introduced Cybertruck in a 2019 reveal where the vehicle’s designer cracked the vehicle’s supposedly unbreakable “armor glass” windows. The company has pushed back production timing three times since: from late 2021 to late 2022, then to early 2023 and most recently to the mid-2023 target for initial production.
The launch of the Cybertruck will give Tesla an EV entrant in one of the most profitable segments of the U.S. market and a competitor to electric pickups from the likes of Ford Motor Co (F.N) and Rivian Automotive (RIVN.O), both of which have launched models in still-limited numbers.
In January, Musk had cited shortages in sourcing components as the reason for pushing the launch of Cybertruck into 2023.
In May, Tesla stopped taking orders for the Cybertruck outside North America. Musk said then the company had “more orders of the first Cybertrucks than we could possibly fulfill for three years after the start of production.”
Automakers often ramp production slowly for an all-new model like the Cybertruck.
Analysts have also cautioned that a weakening global economy will start to weigh on sales for Tesla, which has so far been able to sell every car it makes. Musk has said he expected a coming recession would last “probably until Spring of ’24.”
IDRA Group, the Italian company making the Giga Press that will be used for die casting parts for the Cybertruck, said in a LinkedIn post last week that the 9,000-ton machine for truck part production was packed and ready to be shipped.
The post did not name Tesla. Tesla has been using the Giga Press to cut the cost and complexity of production of its Model Y, an innovation other automakers, including Toyota, have studied.
Reporting by Hyunjoo Jin in San Francisco, Zhang Yan in Shanghai; Writing by Kevin Krolicki; Editing by Muralikumar Anantharaman
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Sept 28 (Reuters) – Some major advertisers including Dyson, Mazda, Forbes and PBS Kids have suspended their marketing campaigns or removed their ads from parts of Twitter because their promotions appeared alongside tweets soliciting child pornography, the companies told Reuters.
DIRECTV and Thoughtworks also told Reuters late on Wednesday they have paused their advertising on Twitter.
Brands ranging from Walt Disney Co (DIS.N), NBCUniversal (CMCSA.O) and Coca-Cola Co (KO.N) to a children’s hospital were among more than 30 advertisers that appeared on the profile pages of Twitter accounts peddling links to the exploitative material, according to a Reuters review of accounts identified in new research about child sex abuse online from cybersecurity group Ghost Data.
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Some of tweets include key words related to “rape” and “teens,” and appeared alongside promoted tweets from corporate advertisers, the Reuters review found. In one example, a promoted tweet for shoe and accessories brand Cole Haan appeared next to a tweet in which a user said they were “trading teen/child” content.
“We’re horrified,” David Maddocks, brand president at Cole Haan, told Reuters after being notified that the company’s ads appeared alongside such tweets. “Either Twitter is going to fix this, or we’ll fix it by any means we can, which includes not buying Twitter ads.”
In another example, a user tweeted searching for content of “Yung girls ONLY, NO Boys,” which was immediately followed by a promoted tweet for Texas-based Scottish Rite Children’s Hospital. Scottish Rite did not return multiple requests for comment.
In a statement, Twitter spokesperson Celeste Carswell said the company “has zero tolerance for child sexual exploitation” and is investing more resources dedicated to child safety, including hiring for new positions to write policy and implement solutions.
She added that Twitter is working closely with its advertising clients and partners to investigate and take steps to prevent the situation from happening again.
Twitter’s challenges in identifying child abuse content were first reported in an investigation by tech news site The Verge in late August. The emerging pushback from advertisers that are critical to Twitter’s revenue stream is reported here by Reuters for the first time.
Like all social media platforms, Twitter bans depictions of child sexual exploitation, which are illegal in most countries. But it permits adult content generally and is home to a thriving exchange of pornographic imagery, which comprises about 13% of all content on Twitter, according to an internal company document seen by Reuters.
Twitter declined to comment on the volume of adult content on the platform.
Ghost Data identified the more than 500 accounts that openly shared or requested child sexual abuse material over a 20-day period this month. Twitter failed to remove more than 70% of the accounts during the study period, according to the group, which shared the findings exclusively with Reuters.
Reuters could not independently confirm the accuracy of Ghost Data’s finding in full, but reviewed dozens of accounts that remained online and were soliciting materials for “13+” and “young looking nudes.”
After Reuters shared a sample of 20 accounts with Twitter last Thursday, the company removed about 300 additional accounts from the network, but more than 100 others still remained on the site the following day, according to Ghost Data and a Reuters review.
Reuters then on Monday shared the full list of more than 500 accounts after it was furnished by Ghost Data, which Twitter reviewed and permanently suspended for violating its rules, said Twitter’s Carswell on Tuesday.
In an email to advertisers on Wednesday morning, ahead of the publication of this story, Twitter said it “discovered that ads were running within Profiles that were involved with publicly selling or soliciting child sexual abuse material.”
Andrea Stroppa, the founder of Ghost Data, said the study was an attempt to assess Twitter’s ability to remove the material. He said he personally funded the research after receiving a tip about the topic.
Twitter’s transparency reports on its website show it suspended more than 1 million accounts last year for child sexual exploitation.
It made about 87,000 reports to the National Center for Missing and Exploited Children, a government-funded non-profit that facilitates information sharing with law enforcement, according to that organization’s annual report.
“Twitter needs to fix this problem ASAP, and until they do, we are going to cease any further paid activity on Twitter,” said a spokesperson for Forbes.
“There is no place for this type of content online,” a spokesperson for carmaker Mazda USA said in a statement to Reuters, adding that in response, the company is now prohibiting its ads from appearing on Twitter profile pages.
A Disney spokesperson called the content “reprehensible” and said they are “doubling-down on our efforts to ensure that the digital platforms on which we advertise, and the media buyers we use, strengthen their efforts to prevent such errors from recurring.”
A spokesperson for Coca-Cola, which had a promoted tweet appear on an account tracked by the researchers, said it did not condone the material being associated with its brand and said “any breach of these standards is unacceptable and taken very seriously.”
NBCUniversal said it has asked Twitter to remove the ads associated with the inappropriate content.
CODE WORDS
Twitter is hardly alone in grappling with moderation failures related to child safety online. Child welfare advocates say the number of known child sexual abuse images has soared from thousands to tens of millions in recent years, as predators have used social networks including Meta’s Facebook and Instagram to groom victims and exchange explicit images.
For the accounts identified by Ghost Data, nearly all the traders of child sexual abuse material marketed the materials on Twitter, then instructed buyers to reach them on messaging services such as Discord and Telegram in order to complete payment and receive the files, which were stored on cloud storage services like New Zealand-based Mega and U.S.-based Dropbox, according to the group’s report.
A Discord spokesperson said the company had banned one server and one user for violating its rules against sharing links or content that sexualize children.
Mega said a link referenced in the Ghost Data report was created in early August and soon after deleted by the user, which it declined to identify. Mega said it permanently closed the user’s account two days later.
Dropbox and Telegram said they use a variety of tools to moderate content but did not provide additional detail on how they would respond to the report.
Still the reaction from advertisers poses a risk to Twitter’s business, which earns more than 90% of its revenue by selling digital advertising placements to brands seeking to market products to the service’s 237 million daily active users.
Twitter is also battling in court Tesla CEO and billionaire Elon Musk, who is attempting to back out of a $44 billion deal to buy the social media company over complaints about the prevalence of spam accounts and its impact on the business.
A team of Twitter employees concluded in a report dated February 2021 that the company needed more investment to identify and remove child exploitation material at scale, noting the company had a backlog of cases to review for possible reporting to law enforcement.
“While the amount of (child sexual exploitation content) has grown exponentially, Twitter’s investment in technologies to detect and manage the growth has not,” according to the report, which was prepared by an internal team to provide an overview about the state of child exploitation material on Twitter and receive legal advice on the proposed strategies.
“Recent reports about Twitter provide an outdated, moment in time glance at just one aspect of our work in this space, and is not an accurate reflection of where we are today,” Carswell said.
The traffickers often use code words such as “cp” for child pornography and are “intentionally as vague as possible,” to avoid detection, according to the internal documents. The more that Twitter cracks down on certain keywords, the more that users are nudged to use obfuscated text, which “tend to be harder for (Twitter) to automate against,” the documents said.
Ghost Data’s Stroppa said that such tricks would complicate efforts to hunt down the materials, but noted that his small team of five researchers and no access to Twitter’s internal resources was able to find hundreds of accounts within 20 days.
Twitter did not respond to a request for further comment.
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Reporting by Sheila Dang in New York and Katie Paul in Palo Alto; Additional reporting by Dawn Chmielewski in Los Angeles; Editing by Kenneth Li and Edward Tobin
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Aug 17 (Reuters) – Elon Musk, the world’s richest person, said early on Wednesday that he was joking when he tweeted hours previously that he was going to buy currently struggling English football club Manchester United Plc (MANU.N).
“No, this is a long-running joke on Twitter. I’m not buying any sports teams,” Musk posted when asked by a user if he was serious about buying the club. “Although, if it were any team, it would be Man U,” he added, “they were my fav (sic) team as a kid.”
Musk originally tweeted: “I’m buying Manchester United ur (sic) welcome,” without offering any details. Some Manchester United fans, disgruntled by their club’s declining fortunes of late, had previously urged Musk on Twitter to consider buying the club.
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The tweet turnaround comes as Musk seeks to exit a $44 billion agreement to buy Twitter (TWTR.N) only four months after announcing on the platform he would buy the social media company, which has taken him to court.
Musk has a history of being unconventional and posting irreverent tweets, making it difficult sometimes to tell when he is joking.
“Next I’m buying Coca-Cola to put the cocaine back in,” he tweeted on April 27, two days after Twitter’s board accepted his unsolicited offer to buy the company.
Referring back to that post, on Wednesday he tweeted: “And I’m not buying Coca-Cola to put the cocaine back in, despite the extreme popularity of such a move.”
Musk’s tweets about potential acquisitions have landed him in hot water with U.S. regulators in the past.
In 2018, he tweeted that there was “funding secured” for a $72 billion deal to take Tesla private, but did not move ahead with an offer. Musk and Tesla each paid $20 million civil fines – and Musk stepped down as Tesla’s chairman – to resolve U.S. Securities and Exchange Commission (SEC) claims that Musk defrauded investors.
The SEC did not immediately respond to a request for comment on Musk’s tweet that he was buying the club outside usual business hours.
Musk’s ambitions range from colonising Mars to creating a new sustainable energy economy, and in the process he has built the most valuable car company in the world, electric vehicle maker Tesla, rocket company SpaceX, and a slew of smaller firms. One is a tunnel maker called the Boring Company.
WIDESPREAD OPPOSITION
Manchester United is one of the most famous names in world football but is currently in crisis on the field amid angry calls from fans for the club’s current owners, the American Glazer family, to pull out.
Clamour from fans and pundits for a change of ownership at the three-time winners of the European Cup, the most prestigious club competition in the global game, is intensifying amid a lengthening run without winning major titles.
British newspaper The Daily Mirror reported last year that the Glazers, who have faced widespread fan opposition to their stewardship since acquiring the club in 2005 for 790 million pounds ($957 million), were prepared to sell but only if they were offered in excess of 4 billion pounds.
In its annual rankings this year, Forbes rated Manchester United, with its huge global fanbase, the third most valuable football club in the world, worth $4.6 billion, behind only Spanish giants Real Madrid and Barcelona.
But shares in the New York-listed football club have slid a quarter in the past 12 months, valuing it at just over $2 billion. The stock has rebounded in the past month, gaining 16% to close at $12.78 on Tuesday.
The northern England-based team has more than 32 million followers on its main Twitter account and Musk’s first tweet about the club had garnered more than 430,000 ‘likes’ on the platform within five hours.
Musk, who is worth $270 billion, according to Forbes, could certainly afford to buy the club.
Last week, filings revealed that Musk had sold $6.9 billion worth of Tesla shares, which he said could be used to finance a potential Twitter deal if he loses a legal battle with the social media platform.
In total, Musk has sold about $32 billion worth of Tesla stock in less than a year partly to pay tax obligations and finance a Twitter deal.
Musk and his lawyer did not immediately respond to Reuters’ request for comment on his original Twitter post before his message that he had been joking. The Florida-based Glazer family did not immediately respond to requests for comment.
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Reporting by Juby Babu in Bengaluru and Hyunjoo Jin in San Francisco; Writing by Peter Henderson, Michael Perry and Sayantani Ghosh; Editing by Aditya Soni, Neil Fullick and Kenneth Maxwell
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Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 21, 2022. REUTERS/Brendan McDermid
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Walmart cuts profit forecast; news hits retailers
McDonald’s up as sales, profit top estimates
Coca-Cola up on forecast raise
Indexes down: Dow 0.8%, S&P 500 1.3%, Nasdaq 2%
NEW YORK, July 26 (Reuters) – U.S. stocks were sharply lower on Tuesday afternoon, with Nasdaq down more than 2%, as a profit warning by Walmart dragged down retail shares and fueled fears about consumer spending.
Walmart (WMT.N) shares fell 8% after the retailer cut its full-year profit forecast late on Monday. Walmart blamed surging prices for food and fuel, and said it needed to cut prices to pare inventories. read more
Shares of Target Corp (TGT.N) declined 3.8% and Amazon.com Inc (AMZN.O) dropped 5.1%. read more
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Also, Amazon said it would raise fees for delivery and streaming service Prime in Europe by up to 43% a year. read more
Amazon was among the biggest drags on the Nasdaq and S&P 500, while consumer discretionary (.SPLRCD) fell more than 3% and led declines among S&P 500 sectors.
“The majority of companies that reported today beat earnings, and that’s been the case. But of course there have been some warnings, and that’s what the market is focusing on,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
“Walmart basically pulled the plug, and most retailers are lower across the board.”
Meanwhile, Coca-Cola Co (KO.N) gained 1.9% after the company raised its full-year revenue forecast. McDonald’s Corp (MCD.N) rose 3% after beating quarterly expectations. read more
A busy week for earnings includes reports from Alphabet Inc (GOOGL.O) and Microsoft Corp (MSFT.O) after the bell. Microsoft was down 3.4% and Alphabet was down 2.9%.
The Dow Jones Industrial Average (.DJI) fell 239.66 points, or 0.75%, to 31,750.38, the S&P 500 (.SPX) lost 52.28 points, or 1.32%, to 3,914.56 and the Nasdaq Composite (.IXIC) dropped 239.38 points, or 2.03%, to 11,543.29.
The Federal Reserve started a two-day meeting and on Wednesday, it is expected to announce a 0.75 percentage point interest rate hike to fight inflation. read more Investors have worried that aggressive interest rate hikes by the Fed could tip the economy into recession.
Earnings from S&P 500 companies are expected to have risen 6.2% for the second quarter from the year-ago period, according to Refinitiv data.
Among the week’s heavy slate of economic news, data Tuesday showed U.S. consumer confidence dropped to nearly a 1-1/2-year low in July, pointing to slower economic growth at the start of the third quarter. read more
Advance second-quarter GDP data on Thursday is likely to be negative after the U.S. economy contracted in the first three months of the year.
Declining issues outnumbered advancing ones on the NYSE by a 1.82-to-1 ratio; on Nasdaq, a 1.51-to-1 ratio favored decliners.
The S&P 500 posted 1 new 52-week highs and 30 new lows; the Nasdaq Composite recorded 32 new highs and 123 new lows.
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Additional reporting by Shreyashi Sanyal and Aniruddha Ghosh in Bengaluru; Editing by Arun Koyyur, Anil D’Silva and David Gregorio
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June 12 (Reuters) – It might look and smell like McDonald’s but now it’s Vkusno & tochka. The golden arches are gone, the filet-of-fish is simply a fish burger. The Big Mac has left Russia.
A new era for Russia’s fast-food and economic scene dawned on Sunday as McDonald’s (MCD.N) restaurants flung open their doors in Moscow under new Russian ownership and with the new name, which translates as “Tasty and that’s it”.
The rebranding of the outlets, three decades after the U.S. burger giant first opened in Moscow in a symbolic thaw between East and West, is once again a stark sign of a new world order.
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The fortunes of the revamped chain, which McDonald’s sold when it exited the country over the conflict in Ukraine, could provide a test of how successfully Russia’s economy can become more self-sufficient and withstand Western sanctions.
On Sunday, scores of people queued outside what was once McDonald’s flagship restaurant in central Moscow. The outlet sported a new logo – a stylised burger with two fries – plus a slogan reading: “The name changes, love stays”.
The queue was significantly smaller than the thousands of people who thronged to the original McDonald’s opening there in 1990 during the Soviet era.
Vkusno & tochka’s menu was smaller and did not offer the Big Mac and some other burgers. A double cheeseburger was going for 129 roubles ($2.31) compared with roughly 160 under McDonald’s and a fish burger for 169 roubles, compared with about 190 previously.
The composition of burgers has not changed and the equipment from McDonald’s has remained, said Alexander Merkulov, quality manager at the new company.
Sergei, a 15-year-old customer, saw little difference.
“The taste has stayed the same,” he said as tucked into a chicken burger and fries. “The cola is different, but there really is no change to the burger.”
Employees take part in preparations before the opening of a new restaurant, following McDonald’s Corp company’s decision to sell its restaurants in Russia to one of its local licensees that will rebrand them under a new name, in Moscow, Russia June 12, 2022. REUTERS/Evgenia Novozhenina
Read More
MUCH DIFFERENCE?
The flagship Moscow restaurant is among 15 rebranded outlets that will initially open in and around the capital on Sunday. Oleg Paroev, chief executive of Vkusno & tochka, said the company was planning to reopen 200 restaurants in Russia by the end of June and all 850 by the end of the summer.
The chain will keep its old McDonald’s interior but will expunge any references to its former name, said Paroev, who was appointed Russia McDonald’s CEO weeks before Moscow sent tens of thousands of troops into Ukraine on Feb. 24.
“Our goal is that our guests do not notice a difference either in quality or ambience,” Paroev told a media conference in the restaurant. He said the chain would keep “affordable prices” but did not rule out slight rises in the near term.
McDonald’s closed its restaurants in Russia on March 14 and said in mid-May it decided to leave the market.
“For three months we did not work,” said Ruzanna, manager of a Moscow branch that will open in July. “Everyone is very pleased.”
Alexander Govor, the new owner of the chain, said up to 7 billion roubles ($125.56 million) would be invested this year in the business, which employs 51,000 people.
“The corporation asked me to, first of all, keep the headcount, to provide people with work. That’s what I’m going to do,” he added.
Govor said the company was looking for new suppliers of soft drinks as Coca Cola (KO.N), which has said it was suspending its business in Russia.
Moments after the press conference finished a man stood up in front of the cameras holding a sign that read “Bring back the Big Mac”. He was swiftly escorted out by restaurant staff.
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Reporting by Reuters; Editing by Pravin Char
Our Standards: The Thomson Reuters Trust Principles.
May 16 (Reuters) – McDonald’s Corp (MCD.N) on Monday became one of the biggest global names to exit Russia, laying out plans to sell all its restaurants after operating for more than 30 years in the country following its invasion of Ukraine.
The world’s largest burger chain, which owns about 84% of its nearly 850 restaurants in Russia, will take a related non-cash charge of up to $1.4 billion.
McDonald’s had in March decided to close its restaurants in the country, including the iconic Pushkin Square location in central Moscow – a symbol of flourishing American capitalism in the dying embers of the Soviet Union.
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In the Russia of the early nineties, the burger chain became a way to sample Western food and spirit for millions of people, even though the cost of one burger was several times bigger than many city dwellers’ daily budgets.
“Some might argue that providing access to food and continuing to employ tens of thousands of ordinary citizens is surely the right thing to do,” Chief Executive Chris Kempczinski said in a letter to employees. “But it is impossible to ignore the humanitarian crisis caused by the war in Ukraine.”
Though a vast majority of the stores in Russia are closed, a few franchised stores have stayed open, cashing in on its skyrocketing popularity. It generated about 9%, or $2 billion, of its revenue from Russia and Ukraine last year.
A logo of the McDonald’s restaurant is seen in the window with a reflection of Kremlin’s tower in central Moscow, Russia March 9, 2022. REUTERS/Maxim Shemetov
Over the weekend, long, snaking queues were seen at the restaurant in Moscow’s Leningradsky Station, one of the capital’s only branches that has remained open, social media footage showed.
McDonald’s said it was looking to sell its restaurants in Russia to a local buyer, but will retain its trademarks.
“Given the circumstances of the sale, the financial challenges faced by potential Russian buyers, and the fact that McDonald’s will not license its brand name or identity, it is unlikely the sale price will be anywhere near the pre-invasion book value of the business,” Neil Saunders, managing director of GlobalData, said.
McDonald’s said it would ensure its 62,000 employees in Russia continue to be paid until the close of any transaction and that they have future jobs with any potential buyer.
After McDonald’s decision to close stores in March, several American brands including Starbucks Corp (SBUX.O), PepsiCo Inc (PEP.O) and Coca-Cola Co (KO.N) followed suit, scrambling to comply with sanctions and deal with threats from the Kremlin that foreign-owned assets may be seized. read more
“I would not be surprised to see other companies follow McDonald’s lead of exiting the market,” Edward Jones analyst Brian Yarbrough said.
Earlier in the day, French carmaker Renault (RENA.PA) said it would sell its majority stake in Avtovaz (AVAZI_p.MM) to a Russian science institute. read more
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Reporting by Uday Sampath and Deborah Sophia in Bengaluru; Editing by Sriraj Kalluvila and Arun Koyyur
Our Standards: The Thomson Reuters Trust Principles.
OMAHA, Neb., April 30 (Reuters) – Warren Buffett on Saturday used the annual meeting of Berkshire Hathaway Inc (BRKa.N) to reveal major new investments including a bigger stake in Activision Blizzard Inc (ATVI.O), while also railing against Wall Street excess and addressing the risks to his conglomerate of inflation and nuclear war.
The meeting in downtown Omaha, Nebraska was Berkshire’s first welcoming shareholders since 2019, before COVID-19 derailed America’s largest corporate gathering for two years.
It allowed shareholders to ask five hours of questions directly to Buffett and Vice Chairman Charlie Munger, and some questions to Vice Chairmen Greg Abel, who would become chief executive if Buffett could not serve, and Ajit Jain.
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Buffett said Berkshire, long faulted for holding too much cash, boosted its combined stakes in oil company Chevron Corp (CVX.N) and “Call of Duty” game maker Activision Blizzard Inc (ATVI.O) nearly six-fold to more than $31 billion. read more
Berkshire also said first-quarter operating profit was little changed at $7.04 billion, as many of its dozens of businesses withstood supply chain disruptions caused by COVID-19 variants, the Ukraine invasion and rising costs from inflation. read more
Buffett, 91, said it “really feels good” to address shareholders in person, after holding the last two meetings without them. Attendees included JPMorgan Chase & Co (JPM.N) Chief Executive Jamie Dimon and the actor Bill Murray.
Buffett had in his annual shareholder letter in February bemoaned the lack of investment opportunities.
That prompted a shareholder to ask what changed in March, when Berkshire bought 14.6% of Occidental Petroleum Corp (OXY.N) and agreed to buy insurer Alleghany Corp (Y.N) for $11.6 billion.
Buffett said it was simple: he turned to Occidental after reading an analyst report, and to Alleghany after its chief executive, who once led Berkshire’s General Re business, wrote to him.
“Markets do crazy things, and occasionally Berkshire gets a chance to do something,” he said. “It’s not because we’re smart…. I think we’re sane.”
Berkshire spent $51 billion on equities in the quarter, and its cash stake sank more than $40 billion to $106 billion.
But the conglomerate has many cash-generating resources, including its insurance operations, and Buffett assured that reserves won’t run dry.
“We will always have a lot of cash,” he said. “It’s like oxygen, it’s there all the time but if it disappears for a few minutes, it’s all over.”
Buffett and Jain stumbled for answers when asked about whether the Ukraine conflict could degenerate into nuclear war.
Jain, who has drawn Buffett’s praise for decades, said he had a “lack of ability” to estimate Berkshire’s insurance exposure.
Buffett added that there was a “very, very, very low” risk of a nuclear attack, though the world had “come close” during the 1962 Cuban Missile Crisis.
“The world is flipping a coin every day,” Buffett said. “Berkshire does not have an answer.”
Buffett also picked on a favored target in saying stock markets sometimes resembled a casino or gambling partner.
“That existed to an extraordinary degree in the last couple of years, encouraged by Wall Street,” he said.
For his part, Munger, 98, echoed Nancy Reagan in criticizing bitcoin, saying that if an advisor suggested you put your retirement account there, “just say no.” Munger also criticized trading firm Robinhood Markets Inc. (HOOD.O) read more
He and Buffett munched their familiar candies from See’s, which Berkshire owns, and drank soda from Coca-Cola, a big Berkshire investment, at the meeting.
Abel defended Berkshire’s BNSF railroad, saying there was “more to be done” to improve operations and customer service, and compete against rival Union Pacific Corp (UNP.N).
Buffett also said Berkshire is designed to assure shareholders that the company and its business culture will survive his and Munger’s departures.
“Berkshire is built forever,” he said.
Shareholders also rejected proposals requiring Berkshire to disclose more about how its businesses promote diversity and address climate risks, and install an independent chairman to replace Buffett in that role. read more
Buffett has run Berkshire since 1965, and Mario Gabelli, chairman of Gamco Advisors and a prominent Berkshire investor, opposed ending his chairmanship.
“It’s not inappropriate for companies to look at separating the chair and CEO,” he said. “It doesn’t make sense in the case of Berkshire Hathaway because this guy has done a fantastic job for 50 years. We like the idea, but not here.”
Thousands of people massed outside the downtown arena housing the meeting before doors opened at 7 a.m. (1200 GMT).
Berkshire had projected lower attendance than in 2019, and about 10% to 15% of seats in the normally-full arena were empty.
As at other Berkshire-sponsored events this weekend, nearly all attendees did not wear masks, though all needed proof of COVID-19 vaccination. CNBC.com webcast the meeting.
“I bought a chair from Walmart so I could sit down,” said Tom Spain, founder of Henry Spain Investment Services in Market Harborough, England, who arrived at 3:15 a.m. for his third meeting. “Everyone has been using it. Next year I might bring a massive container of coffee and give it out.”
Lauritz Fenselau, a 23-year-old owner of a software startup from Frankfurt, Germany, showed up at 4 a.m. for his first meeting. “It’s like a pilgrimage,” he said.
Also sleep-deprived was Andres Avila, who arrived in Omaha from Boston just five hours before getting in line at 4:45 a.m., carrying an umbrella to fend off the rain.
“I have a bunch of my idols here,” he said.
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Reporting by Jonathan Stempel and Carolina Mandl in Omaha, Nebraska; editing by Megan Davies, Ros Russell and Diane Craft
Our Standards: The Thomson Reuters Trust Principles.