The Changing Face Of Retail
As the ongoing recession continues to cut into Americans' discretionary income and unemployment continues to rise, retail continues to be the sector on the front lines of the continuing economic turmoil. Giant discount chains like Walmart, Kmart, and Target are feeling the pinch, and the first major retail domino has fallen as American icon Sears has entered into liquidation. The massive retail chain, which began experiencing a decline in the 1980s which only accelerated in the 90s and beyond, wasn't able to adapt to the changing retail landscape. The Sears catalog, which used to be a window to the retail world for millions of American shoppers, ended its publication run in the mid-90s, and even though iconic company brands such as Craftsman and Kenmore kept shoppers visiting stores, it wasn't enough to keep the company going. With prices that just couldn't compete with rivals, and most of its locations in shopping malls (which themselves have seen better days), Sears was overtaken by its competitors, and the advent of online retail over the past decade was the last nail in the coffin. The early 2000s saw Sears attempting to acquire Target in an effort to save its dying brand, but investors couldn't raise enough capital, and Target, which is now the #2 brick-and-mortar retailer in America, had grown too large to acquire. Sears itself was nearly acquired by online retailer Luminari, a company started in 1997 by businessman Eddie Lampert, but Sears staved off the hostile takeover bid, and Luminari itself filed for bankruptcy last year after once being the #2 online retailer behind Amazon. All Sears locations will be shuttered by the end of the year after liquidating their remaining inventory and fixtures. Meanwhile, the Big Three remain, at least for the moment, somewhat stable despite declines in share prices and overall revenue for all three of them. Kmart had begun to recover from a rocky period in the early 2000s when the recession hit, and now the company is at somewhat of a crossroads, making a small profit but still less than its primary competitors. Kmart went through a restructuring at the beginning of the decade, in which lower performing businesses were closed, remaining stores were remodeled, and most importantly, the company's inventory system underwent a massive overhaul to enable it to better compete with stores like Walmart. The company also acquired a significant online presence, and began promoting online Blue Light Specials in which items would be marked down significantly, similarly to the in-store specials that helped make the company so massive in the 1980s. The company has also been offering significant discounts on hot-ticket items such as brand-name shoes and new release video games, which companies like Walmart don't typically offer. This has allowed Kmart to acquire new customers to replace the ones lost to their competitors, but the company still has a long way to go. Meanwhile, specialty companies such as Borders and Blockbuster have also expanded their online presence in an effort to survive the tough economic times. Blockbuster is now offering movie streaming and subscription packages, while Borders has begun promoting exclusive book series written by in-house authors in an effort to provide products that Amazon can't.
However, many of these special deals and discounts are coming at a cost, and some employees say that those extra special deals are being paid for with money taken out of their paychecks. While retail employees had seen a steady increase in pay due to the minimum wage increases signed into law by the Gore administration, some employees now blame President Huntsman for a freeze in wage increases and new benefits, claiming that the new government has emboldened employers to offer them less in return for their labor. A group of Walmart employees in Corpus Christi, Texas are accusing the company of wage theft, and popular singer Selena has even gotten involved, turning down an invitation to perform at the company's annual shareholder meeting and publicly citing the company's treatment of its employees as her reason while quoting Cesar Chavez in a post on her official website. A few retail companies have admitted that they have been limiting benefits as of late, but blame the ongoing economic difficulties as the primary factor. However, companies such as Costco, which continues to see strong growth during this period and have added 55 new locations over the past three years, are raising their employees' wages this year, and directly cite the current recession as their reason for doing so, with the company's CEO making the following statement: "We at Costco know that our employees and customers are feeling their wallets pinched during this difficult time. However, that does not diminish our commitment to the hard working employees who make our customers happy every day of the year. That's why we're going to be increasing wages for all employees to help them during this difficult time, and as a thank you for the continued work they do to help our customers." Both Costco and its competitor Sam's Club (a subsidiary of Walmart), are seeing increased profits over the past year as more and more consumers look to save money by buying in bulk, and companies such as McDonald's and Burger King are also seeing increased profits, even as fast casual chains such as Olive Garden and TGI Friday's struggle. In fact, seafood chain Red Lobster has also filed for bankruptcy, with most of their locations expected to close by the end of 2010.
As the economy continues to struggle and consumers continue to scrimp, retail companies will face challenges as America enters its next decade. The companies that survive will be the ones that can adapt to consumers' changing habits and decreased discretionary spending, and the ones that can best take advantage of the economy once it recovers.
-from an article on The Business Beagle, posted on August 1, 2009
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Jon Huntsman entered the second half of 2009 with a series of successes, both foreign and domestic, but also facing a number of challenges as he continued to try and get his agenda through a friendly but conflicted Congress. He'd helped make peace in Latin America, a peace that would benefit his country economically, and had also guided his country through a major infrastructural disaster, the biggest blackout in world history up to that point. Now, he faced an ongoing fight over health care, and his massive bill was primarily being blocked by one intransigent senator. Nevada's libertarian senator Penn Jillette minced absolutely no words when criticizing the bill, which would require all Americans to get health insurance or face a fine. "Let's face it," said Jillette in an interview on the July 19, 2009 episode of 60 Minutes. "This bill is bullshit." Jillette's use of profanity was bleeped, but the message was crystal clear, and as the Senate got ready to vote on the bill, Jillette let his colleagues know in no uncertain terms that he'd be filibustering Romneycare. And on August 24th, that's what Jillette did. In a marathon 17 hour filibuster, Jillette laid out his reasons why the bill was unconstitutional and why he wouldn't allow it to come to a vote. He used surprisingly little profanity, and when he did, it seemed that it might have just been a slip of the tongue. He was, for the most part, quiet and articulate, but occasionally raised his voice when he was making a point that he was particularly passionate about. However, even as he spoke, he knew that his fight was a lost cause. Republicans in the Senate had the votes. Even with numerous Republicans siding with Jillette and most of the Democrats against the bill, enough Democrats came across the aisle to pass the bill into law, thanks to the large Medicaid expansion which would help people get into high risk pools for those with pre-existing conditions. While the bill's supporters had enough votes for cloture, they agreed to let Jillette say everything he wanted to say, then, by a 64-36 vote, passed the bill. The House had already passed it by a 278-157 margin, and now all it needed was Jon Huntsman's signature, which it got on August 28, 2009. The official name for the bill was the Health Care Access Expansion Act, but many of its detractors and a few of its supporters continued to refer to it as "Romneycare", which Mitt Romney actually admitted to being proud of in an interview soon after the bill's passage. The biggest reform in the bill was the fact that it allowed people to purchase insurance across state lines, and open enrollment for those cross-state exchanges would begin in 2010. The Medicaid expansion would add a massive new financial burden on the government, one that Huntsman would seek to relieve by cutting programs elsewhere.
Huntsman began stressing the need for entitlement reform, something that most Republicans in Congress were on board with, but something that deeply distressed many Democrats. Huntsman claimed that he wouldn't be cutting welfare, merely "streamlining" it, while ensuring that people who benefited from federal programs had a job or were in training to acquire one. His opponents claimed that imposing new work requirements during a time of rapidly rising unemployment was bordering on heartless, but Huntsman responded that these reforms would jump-start the economy by allowing him to pass major tax cuts to allow companies to invest more in new workers, training, and technology. Huntsman clearly had the votes to push his proposals through, but the American people would be far tougher to convince, and if Huntsman wanted to avoid an electoral bloodbath in 2010, he'd have to tread lightly. His proposal to cut military spending, on the other hand, was more popular amongst the American people but less popular in Congress. However, he did find an ally in Penn Jillette, who saw eye to eye with Huntsman on the issue and began leaning on other more libertarian-minded Republican senators to rally up support for the spending cuts. Huntsman stressed that servicemembers' pay and benefits would remain unaffected, and that veterans programs could potentially see an increase in funding if other military spending were cut. Huntsman claimed that the world had become a more peaceful place over the past few years, with Al-Queda nearly destroyed and the threat from groups like the TTP also fading. He cited the warming of relations with Venezuela as a sign that countries that had been traditionally hostile to America were starting to come around to Western ideals, and he even began extending diplomatic feelers toward countries like Iran, which he claimed would be "key to the ongoing efforts at achieving a lasting peace in the Middle East". Iran's current president, the recently elected reformer Mehdi Karroubi, had made improved relations with the West as a major plank of his campaign. A few years ago, after Mahmoud Ahmadinejad had won election in 2005, it had seemed impossible that someone like Karroubi could achieve power in Iran, but a relative lack of anti-American sentiment during the last several years of the Gore administration had opened the door for a reformer to gain power, and Karroubi and his millions of supporters had seized on the moment. It wasn't quite the "revolution" some Western news organizations had claimed it to be: women's rights were still severely curtailed, and patrols of enforcers still beat and arrested those who defied the country's strict religious laws. However, it was the start of reform in a country that for the last thirty years had been gripped by oppression, and perhaps the beginning of the process of re-instating diplomatic relations between the United States and Iran.
Despite promising signs that the Huntsman administration had improved things for many Americans, the economy was still suffering: the Dow Jones Industrial Average had yet to make it back above 10,000, unemployment had reached 11 percent, and inflation, though slowed by the lowering oil prices, still remained somewhat high, putting a damper on consumer purchasing power. It looked to be another season of holiday misery for many of the worst-off Americans, who saw the Huntsman administration not as a promising sign that things were getting better, but as a sign that the rich were continuing to empower themselves at the expense of the poor and working class. While optimism continued to reign throughout Huntsman's first year in office, there was a growing discontent among many, and if things didn't change, that discontent would continue to worsen.
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Katie Couric: On tonight's broadcast, a nightmare in one of the most luxurious hotels in the world, as Caesars Palace in Las Vegas experiences a horrific fire that tore through much of the building's shops and restaurants. Dozens are dead, including world famous Michelin starred chef Gordon Ramsay, and hundreds are injured in the worst disaster the city has experienced since the 1980 MGM Grand fire. Also tonight, a massive terrorist attack averted in Indonesia, with police finding four large explosive devices and foiling an attack that could have rivaled 2006's Islamabad bombing. And also in international news, sentiment for an independent Kurdistan is growing, leading to tensions between Turkey and Iraq, as Iraqi dictator Qusay Hussein launches a fresh round of threats against his country's Kurdish minority and their Turkish supporters. Nightly News begins now.
*Images are shown of people fleeing Caesars Palace as a fire is seen engulfing a large section of the ground floor.*
Couric: It was one of the worst fire disasters in decades, and it happened in seemingly the most unlikely of places: a hotel known for fun and luxury, now the site of a terrible tragedy. Caesars Palace is perhaps the most famous hotel and casino in the world, and for years, it's played hosts to huge concerts, major sporting events, and millions of tourists from around the world. But the fun was tragically interrupted today as a fire broke out in one of the building's restaurants, and spread quickly throughout the complex, catching thousands of people off guard. Dozens are dead, the count currently stands at 58, but hundreds more could have been killed if not for the quick thinking of the building's employees and the numerous off-duty emergency workers who helped people escape the inferno. And now we have late breaking news that Gordon Ramsay, world famous chef known for his bombastic demeanor in the kitchen and for shows such as Hell's Kitchen and The F Word, has died, apparently having been killed in a flashover after helping some of his employees escape the rapidly growing blaze. With more on the disaster and the ongoing efforts to find survivors, here's Susan Lopez, reporting live from Las Vegas, Nevada.
-the opening minute of the August 14, 2009 broadcast of The NBC Nightly News
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Wolf Blitzer: We're going to interrupt our coverage of Senator Jillette's filibuster for a moment, because we have late breaking news out of Indonesia about an assassination attempt on President Megawati Sukarnopatri, recently re-elected after a narrow victory over former president Susilo Yudhoyono. We have word that Sukarnopatri was actually shot and wounded as she exited a hotel she had visited to attend a conference of business executives, she was shot but her wound was not severe and that she's actually just been discharged from the hospital. We're going now to our correspondent in Indonesia, Shawn Atlinger, who actually witnessed the attempt on the president's life as she exited that conference, is that correct?
Atlinger: Wolf, that's correct, I was actually getting ready to ask her a question as she exited the building, and all of a sudden, a man yelling very loudly rushed at the president with a small handgun and fired at her twice before being tackled by her guards.
Blitzer: He yelled before firing?
Atlinger: He yelled and then fired immediately afterward, I saw her get hit in the side and fall to one knee but the bullet didn't actually go through her or even into her, according to authorities the bullet actually hit her and then bounced and hit the building itself, and the other bullet they're saying also went into the building.
Blitzer: Was anyone else hurt? Were you in any danger?
Atlinger: I was actually pretty close to where the shooter came in from, but he fired in a direction completely opposite from me, no one else was hurt by either of the bullets and she actually got up after the bullet hit her, she went down and her guards rushed to her, then she went up and they kind of helped her back down, they didn't want her to stand up because they were worried... we were all worried there might be a second or even a third attacker.
Blitzer: So it sounds to me like she wasn't badly hurt even at the scene, that the bullet might have just grazed her.
Atlinger: I couldn't really see what she was saying after being shot, because her guards swarmed around her, nobody could see her after that and they pushed most of us completely away, so I couldn't see if she was talking at all. No one's telling us anything about what she said immediately after being shot, I asked but no one was willing to tell me.
Blitzer: We're actually showing some footage right now of her coming out of the hospital, and she seems to be in good spirits.
Atlinger: You know, that's what I'm hearing too, that she was treated very quickly and didn't seem to be in any sort of distress while she was being taken to the hospital, but I'm still trying to figure out what exactly she said after being shot.
Blitzer: This of course comes after several weeks of turmoil in Indonesia following her election, we've seen sixteen people killed in recent protests, we've seen attempted terrorist attacks, and this is quite troubling news considering reports that Pakistan's violence has also been flaring up as of late.
Atlinger: You know, President Sukarnopatri is fairly popular here, but there is a very small but very devoted group of people opposed to her, and there's been increased security concerns primarily because of that small group of people. Not necessarily even supporters of her opponent Susilo Yudhoyono, but just radical people who were sort of content with Yudhoyono but believe that Sukarnopatri will bring reforms to the country that they don't want to see put into place.
Blitzer: This latest attack is certainly extremely troubling, and a sign that Indonesia is experiencing a lot of turmoil right now even as a lot of people are celebrating the results of this recent election.
-from an August 24, 2009 broadcast of CNN at 10:17 PM