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Black Friday draws fewer US shoppers as many shun stores for online

Bargain hunters ventured out in chilly weather to buy Christmas gifts on Black Friday only to discover that many US retailers offered smaller price markdowns this year amid tight supplies.

COVID fears and fewer “doorbuster” sales thinned crowds the day after the US Thanksgiving holiday, which kicks off the year-end holiday shopping season.

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On the same day, the World Health Organization named the newly identified omicron variant of the coronavirus as a “variant of concern,” triggering worldwide alarm and a selloff in the US stock market.
Stores on Black Friday had the lowest level of clearance goods for sale in five years or more, Cowen analysts said in a note. Many shoppers chose to pick up merchandise curbside rather than venturing inside stores.
Black Friday retail sales are up 29.8 percent versus 2020 through 3 p.m. ET, according to Mastercard SpendingPulse.
Consumers spent $6.6 billion up until 9 p.m. ET on Friday, according to Adobe Digital Economy Index, which expected total spending of between $8.8 billion and $9.2 billion for the day.
Walmart and Target stood to outperform other retailers in part because of their buy-online-pick-up-at-store services, Cowen said. Target added more than 18,000 “drive-up” parking spaces, more than doubling spots versus last year. The company said its most popular Black Friday deals included
$219.99 for a KitchenAid professional stand mixer that regularly sells for $429.99, and savings of up to $60 on Apple Watches and AirPods.
Several retailers — including Walmart, Target, and Best Buy — are expected to post lower fourth-quarter profit margins because of tight inventory and higher costs for raw materials, freight and labor. “Even though the holiday season should be okay from a sales standpoint — because retailers are discounting less — the margins won’t necessarily be higher because of inflation,” said Forrester Research analyst Sucharita Kodali.
US consumers are entering the holiday season flush with cash thanks to a still-hefty pile of savings from multiple rounds of government pandemic relief and double-digit wage increases as businesses compete for workers.

Yet retailers had lured shoppers to make holiday purchases as early as September this year, because the supply chain logjam has prevented them from quickly replenishing year-end merchandise.
A Deloitte survey showed people had spent 80 percent -85 percent of their holiday gift budgets even before Black Friday. For November and December, online sales are estimated to hit a record $207 billion, up 10 percent from last year, according to Adobe Digital Economy Index.
The National Retail Federation has forecast combined brick-and-mortar and online holiday sales to reach between $843.4 billion and $859 billion, 8.5% to 10.5 percent higher than last year.
Elver Gomez, a 21-year-old student in Chicago, said he didn’t find the Apple and Microsoft laptops he wanted while shopping at a Best Buy store Friday morning. “It seems like this year it’s either out of stock” or for sale at what he said was “not that great of a price.” Best Buy added a message to its website warning of “limited qualities” and “no rainchecks.”
Electronics – in short supply due to a global chip shortage — had the highest out-of-stock levels, followed by personal care, and home and garden, according to Adobe. Through most of November, out-of-stocks were up 261 percent versus 2019.

Read more: COVID-19 retail impacts on consumer behavior here to stay: Survey

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Ryanair cabin crew in Spain announce 12 new days of strikes in July

Spain-based cabin crew at Ryanair plan to strike for 12 days this month to demand better working conditions, the USO and SICTPLA unions said on Saturday, raising the prospect of travel chaos as the summer tourist season gets under way.

The announcement came on the final day of the crews’ current strike, which began on Thursday and forced Ryanair to cancel 10 flights in Spain on Saturday.

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Cabin crew will strike on July 12-15, July 18-21 and July 25-28 across the 10 Spanish airports where Ryanair operates, the unions said in a statement.

“The unions and crew of Ryanair … demand a change of attitude from the airline,” they said in a statement, calling for Ryanair to resume negotiations on working conditions.

The unions also urged the government “not to allow Ryanair to violate labor legislation and constitutional rights such as the right to strike.”

Airline workers across Europe have been staging walkouts as the sector adapts to a resumption of travel after pandemic lockdowns.

Spain-based cabin crew at easyJet are striking for nine days this month for higher pay. The airline cancelled five flights from Spain on Saturday.

Workers at Paris’ Charles de Gaulle airport went on strike on Friday and into Saturday, forcing the cancellation of about 10 percent of flights.

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Tesla braces for delayed delivery due to China plant shutdown

Tesla Inc. is expected to announce quarterly production and delivery figures this weekend that will likely be among the worst of the year – and break its multi-quarter streak of record-setting results – due largely to an extended shutdown of its factory in Shanghai.

The electric vehicle maker may have delivered more than 261,000 vehicles globally during the three months ended in June, according to nine analysts surveyed by Bloomberg, ending a two-year stretch of consecutive quarterly gains.

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Tesla handed over more than 310,000 vehicles in the first three months of the year, more than any previous quarter.

“We cut our second-quarter deliveries estimate by 65,000 to 245,000 units, reflecting a prolonged Covid 19-related shutdown and logistical challenges in the Shanghai factory,” wrote Emmanuel Rosner of Deutsche Bank in a research note to clients. “Recall that during the first-quarter call, CEO Elon Musk had provided directional guidance of sequentially flat deliveries for the quarter but the situation in China worsened subsequently,” only improving in early June.

Shares of Tesla rose 1.2 percent to close trading Friday at $681.79, but the stock is down about 35 percent so far this year.

Deliveries are one of the most closely watched metrics at Tesla. They underpin the Austin, Texas-based company’s financial results and are widely seen as a broad barometer of consumer demand for EVs amid a wider shift away from the internal combustion engine.

Many large automakers will announce US sales results Friday but Tesla, which reports global totals, hasn’t specified a release date.

Dan Levy, an analyst with Credit Suisse, reduced his delivery estimate for the period to 242,000 units. “In aggregate, we believe the Shanghai shutdown accounted for about 90,000 units of lost production in the second quarter,” Levy wrote in a note to clients.

Tesla makes the Model S, X, 3 and Y vehicles at its plant in Fremont, California. It also produces Models 3 and Y at a factory near Shanghai. The company has begun delivering the first Model Ys from its new plant near Berlin and held a “Cyber Rodeo” event for 15,000 people in April to celebrate a new factory in Austin.

‘Money Furnaces’

However, both Berlin and Austin have been slow to ramp up production, with Musk warning in a late May interview that both plants are “gigantic money furnaces.”

Analysts and investors are also worried that the price hikes automakers are imposing to combat soaring raw material costs will weigh on demand. Tesla had boosted its sticker prices by as much as $6,000 a car earlier this month, according to Electrek.

A stronger-than-expected delivery number could provide a boost to Tesla’s stock, which is down more than 35 percent this year amid wider market concerns about rising energy costs, inflation and a potential recession.

Musk shares many of those concerns and is in the process of laying off 10 percent of Tesla’s salaried work force while pushing others to return to the office.

Earlier this week, Tesla laid off roughly 200 people on its Autopilot team, mostly hourly employees who worked as data annotation specialists.

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Regulator urges Germans to prepare for possible gas shortage

Fearing Russia might cut off natural gas supplies, the head of Germany’s regulatory agency for energy called on residents Saturday to save energy and to prepare for winter, when use increases.
Federal Network Agency President Klaus Mueller urged house and apartment owners to have their gas boilers and radiators checked and adjusted to maximize their efficiency.
“Maintenance can reduce gas consumption by 10 percent to 15 percent,” he told Funke Mediengruppe, a German newspaper and magazine publisher.
Mueller said residents and property owners need to use the 12 weeks before cold weather sets in to get ready. He said families should start talking now about “whether every room needs to be set at its usual temperature in the winter – or whether some rooms can be a little colder.”
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The appeal came after Russia reduced gas flows to Germany, Italy, Austria, the Czech Republic and Slovakia earlier this month, as European Union countries scramble to refill storage facilities with the fuel used to generate electricity, power industry and heat homes in the winter.
Russian state-owned energy company Gazprom blamed a technical problem for the reduction in natural gas flowing through Nord Stream 1, a pipeline which runs under the Baltic Sea from Russia to Germany.
The company said equipment getting refurbished in Canada was stuck there because of Western sanctions over Russia’s invasion of Ukraine.
German leaders have rejected that explanation and called the reductions a political move in reaction to the European Union’s sanctions against Russia after it invaded Ukraine.
Vice Chancellor Robert Habeck, who is also Germany’s economy and climate minister and responsible for energy, has warned a “blockade” of the pipeline is possible starting July 11, when regular maintenance work is due to start. In previous summers, the work has entailed shutting Nord Stream 1 for about 10 days, he said.
The question is whether the upcoming regular maintenance of the Nord Stream 1 gas pipeline will turn into “a longer-lasting political maintenance,” the energy regulator’s Mueller said.
If the gas flow from Russia is “to be lowered for a longer period of time, we will have to talk more seriously about savings,” he said.
According to Mueller, in the event of a gas supply stoppage, private households would be specially protected, as would hospitals or nursing homes.
“I can promise that we will do everything we can to avoid private households being without gas,” he said, adding: “We learned from the coronavirus crisis that we shouldn’t make promises if we’re not entirely sure we can keep them.”
He said his agency “does not see a scenario in which there is no more gas coming to Germany at all.”
Also on Saturday, German chemical and consumer goods company Henkel said it was considering encouraging its employees to work from home in the winter as a response to a possible supply shortage.
“We could then greatly reduce the temperature in the offices, while our employees could heat their homes to the normal extent,” Henkel CEO Carsten Knobel told daily newspaper Rheinische Post.
Earlier this month, Habeck activated the second phase of Germany’s three-stage emergency plan for natural gas supplies, warning that Europe’s biggest economy faced a “crisis” and storage targets for the winter were at risk.
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