Holy Moly Guacamole! Why are Avocados So Expensive?

It’s no secret that American’s love avocados.

Restaurant’s have quickly figured out that their customers crave the juicy fruit. Nowadays you can find avocados on almost any menu across the country whether it is on your toast, burger, or even as ice cream!

According to the Hass Avocado Board, American’s consumption of avocados has been increasing rapidly over the past 15 years. Furthermore, Hass avocado’s account for 95% of all consumed in the United States, reaching nearly 4.25 billion avocados in 2014.

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The growth in popularity for avocados over the last two decades is due largely in part to trade restrictions between the US and Mexico that were lowered in the late 1990s. Before this, fruits (avocados) were prohibited from being shipped to the US, which meant that all of the avocados in America had to come from California. However, the state’s climate was not able to support year round production of the fruit and therefore only specific areas of the country were able to receive the product at certain times of the year. This meant that only supermarkets in close proximity to producers could sell avocados due to their short shelf life.

By lowering the restrictions in the 1990s, the avocado market in the US was revolutionized. As seen in the graph below, by 2000, 40% of all avocados sold in the US were produced out of the country and that number has now risen to over 80%.

 

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So what’s happening now?

There are two forces that are contributing to the sharp increase in avocado prices that have been seen and made headlines over the past year: environmental change and US consumers’ increased appetite.

In the wake of California’s dramatic drought in 2015, avocado prices have almost doubled in the past year.

In early October, a Santa Ana-based Ingardia Bros. Produce. Inc. claimed that avocado prices reached $76 a case, which was the highest the company had seen in three decades.

Another contributing factor is the decreased number of avocado’s being shipped to the US from Mexico. The reason for this is unclear, although according to Ingardia produce buyer Cruz Sandoval, he argues that, “Mexican growers are holding out for more money because the California season is running dry, and there’s no other sources.”

For retailers, they are feeling the pressure immensely, as the Hass Avocado Board reports that the average unit price of avocados has gone up nearly 20 cents since December 2015.

It is also important to consider how the increase in prices will affect the fruits two key consumer groups: shoppers and restaurants.

For consumers going into the grocery store, they are more likely to notice the change in price and can make an instinctive decision on whether or not to buy more expensive avocados. For restaurants, however, the decision is more challenging as their customers still expect to have the ingredient on their menus despite the higher costs. Restaurants must then decide whether or not they will take the loss or increase prices for valuable customers.

SOURCES:

http://www.theatlantic.com/business/archive/2016/10/avocado-shortage-price-hike/504383/

https://www.washingtonpost.com/news/wonk/wp/2015/01/22/the-sudden-rise-of-the-avocado-americas-new-favorite-fruit/

http://www.ocregister.com/articles/prices-731700-mexico-avocados.html

http://www.forbes.com/sites/geoffwilliams/2016/10/31/how-the-avocado-shortage-is-affecting-chipotle-grocers-and-you/#7257eeb969f1

NBA Franchises: 30 brick and mortar unicorns

On August 12, 2014 a California Court ruled that it was legal for the ex-Microsoft CEO and billionaire Steve Ballmer to purchase the Los Angeles Clippers for two Billion Dollars. This astronomical purchase price reverberated across the entire sports landscape as the figure was unprecedented for an NBA franchise.

The shock was further intensified because of the team being purchased. The Clippers were not a jewel franchise or a perennial powerhouse with a long tradition and sterling reputation. At best, Ballmer was investing in potential, as analysts agreed that the Clippers were woefully mismanaged with untapped revenue streams waiting to be exploited. Still, a two billion dollar purchase price was almost four times the highest recorded sale for an NBA franchise up to that point, when the Milwaukee Bucks sold for 550 million dollars earlier in 2014.  Based on those figures, the general consensus was, and still is, that it was an expensive premium to pay for upside.

Ballmer is enjoying his purchase

Ballmer is enjoying his purchase

So, how did the NBA achieve such rapid economic development? Just four years prior, the mere thought of a two billion dollar sale would have been laughable. In 2010, the economy was in the nascent stages of its recovery from the Great Recession. The NBA was not immune from the aftershocks of the economic turbulence, and many teams reportedly were losing money each year. With NBA owners suffering stagnant growth in other business interests, franchise ownership was ceasing to offer the benefits of a vanity asset and only serving as a money pit. The reversal in economic fortunes dimmed the allure of commanding an NBA franchise, and in turn both the perception and value of franchises stumbled.

According to Forbes magazine, audited financial documents show that in the 2009-2010 season, 23 of the 30 NBA franchises were unprofitable with an aggregate loss of 340 million dollars. This represented a slight improvement from the prior year when 24 teams were in the red and total losses were closer to 370 million dollars.

Admittedly, the NBA themselves painted a dire image of the league’s financial stability in order to better position themselves for the 2011 Collective Bargaining Agreement negotiations. However, Forbes was aware of this maneuver by the NBA and still presented their own estimates, which are acknowledged as unbiased and third party. Some of the figures and the accounting measures used are up for debate by Forbes competitors. For instance, 538.com founder Nate Silver has favored operating margin over operating income as the best indicator of an NBA franchise’s economic health.

Even with some debate over the specific valuations, as of 2010 there was a general consensus that the NBA as was struggling to keep pace with the growth of its bigger and more popular, domestically at least, competitor: the NFL.

Fast forward to the present day and the NBA is experiencing valuation growth unheard of outside of Silicon Valley. What makes this even more unique is the fact that the NBA is a relatively mature industry, yet valuations have increased six-fold for some franchises. The Clippers who in 2011 were valued at 302 million dollars sold for six and a half times that only three years later. The Knicks in 2016 are now valued at 3 billion dollars, the Lakers at 2.7 billion dollars, and the Bulls at 2.3, close to 500% increases respectively. The average NBA team is now worth over one and quarter billion dollars when only five years ago the teams were at around 340 million.

So what drives this exponential and incomparable growth? It’s an array of factors: an ever changing entertainment landscape, the popularity of individual players, a favorable collective bargaining agreement, and scarcity of options with only 30 teams. All of these factors, and many more, are playing their part in this contemporary NBA economic renaissance.

First, and probably most significant, is the rapidly increasing premium content providers place on live sports entertainment. With recorded television, streaming services, and unconventional multimedia platforms battling for consumers attention, traditional cable and television providers are doing their best to hold onto the crown jewel of live television, sports. The scarcity of content worthy of placing viewers in their seats and holding their attention for ad dollars has driven up the future value of television contracts for sports in general. As a fast paced game that connects with millennials, basketball is in a prime position to cash in on the lucrative TV rights deals. As Ben Thompson of the blog Stratchery points out, sports in general are signing such rich deals because “advertisers have nowhere else to go.”

This phenomenon is playing out at the local and national level. One of the driving factors in Balmer’s decision to purchase a franchise was the looming Clippers’ television deal. After the Lakers signed the largest regional TV rights deal in 2011, valued at four billion dollars over twenty years, Balmer felt he was in a great position to increase the Clippers revenue. As of September 2016, Balmer accomplished that goal by more than doubling his annual television deal with Fox Sports, bringing in over fifty million dollars annually while also including clauses for innovative and interactive services. At the regional level, these deals are taking place all over the country, with teams dramatically increasing their television revenue as content starved networks fork over immense amounts of cash for broadcast rights and in turn ratchet up the cost for advertisers.

At the league level, the NBA is mirroring each team’s strategy but achieving it through economies of scale. Since the league can offer a greater breadth and depth of offerings, and is able to negotiate with national networks, their new TV deal is landmark in scope. The strength of negotiating on behalf of a collective was in full effect as the NBA inked a deal in 2014 that will pay the league close to 2.6 billion annually. The deal, which is slated to start at the beginning of the 2016 season, represented an incredible 180 percent increase from the previous agreement struck with Turner Sports and ESPN in 2007. The NBA was a recipient of good fortune and timing on this deal, as they were the only major sports media deal up for negotiation until 2020. The league wide revenue sharing ensures that this deal contributes to each team’s top line growth in a significant fashion.

While TV rights are certainly driving healthy annualized revenue growth, there are other factors at play that also put the NBA in a unique position for this tremendous evolution. If it was just about live content for TV, Major League Baseball’s absolute advantage in games played would be the primary beneficiary of the paradigm shift within entertainment. Instead, it is lagging behind both the NBA and NFL across a wide array of metrics. What also is contributing to the NBA’s growth is the personality and value of its players. Social media has eliminated the middleman between players and their fans, allowing more athletes to build personal brands and connections with fans. This exposure to a wider demographic helps broaden the NBA’s audience and bring in more fans, and with them more revenue from ticket sales and merchandise.

The reason the brand appeal of these players is so significant is the favorable Collective Bargaining Agreement the NBA owners got after the 2011 lockout. The combination of posturing about losses and an incompetent union head placed owners in a prime position to lower wages and cut major cost drivers. NBA teams were able to lower salaries by an average of 280 million dollars per year across the league, which is a little bit more than 9 million dollars per year for the salary cap until the current CBA ends or is renegotiated. (LA Times)

Although NBA salaries skyrocketed this past summer because of the new TV deal, they could have been even higher had the NBA Players Union stood their ground on their share of the revenue instead of decreasing their cut by more than two percent. (LA Times) Couple this with the fact that many superstars are actually paid below their free market value and owners are getting a bargain across the board. For instance, Kevin Pelton of ESPN estimates through his formula that Lebron James production is actually worth close to 100 million dollars annually to the Cleveland Cavaliers, which is more than three times his salary of 31 million dollars next year.

More money should be flying down for Lebron James according to economists

More money should be flying down for Lebron James according to economists

This type of bargain for a major asset is a steal in any business, and it is obvious why NBA franchises are increasing in value so rapidly. They have incredible cost controls, domain over a scarce resource, and have a competitive edge in developing off the court recognition. This is not to mention the vanity aspect of the purchase as well as the fact that the NBA is leading the major American sports in their outreach to China and other global markets.

In times of economic success, scarcity also comes into play. This is variable depending on the economy as a whole, but it is a trend that shouldn’t be ignored. With only 30 NBA teams, and a bevy of egotistical billionaires, pure fundamentals don’t matter as much as having a rare and unique asset like an NBA franchise. It is hard to quantify the economic impact of an NBA team on an owner’s ego, but there is no question that it should be factored into this unrivaled growth. In terms of pure supply and demand, there is an incredible shortage and imbalance with countless billionaires waiting in the wings for an NBA team to fall into their lap.

NBA owner Mark Cuban enjoying one of the rarest assets of all: an NBA title

NBA owner Mark Cuban enjoying one of the rarest assets of all: an NBA title

Overall, the two major internal changes that have served as the catalyst for this furious growth are the shift in compensation formulas and technological adeptness in marketing and branding players. Combine this with an ever changing media landscape, and that is the fuel for a thriving business and exponential growth. That is what the NBA is experiencing, the only question is how long will it sustain this dramatic increase?

Is Cyber Monday a new Holiday?

Leading up to Thanksgiving, advertisements can be seen everywhere. Ads for shoes, ads for electronics, ads for department stores on virtually every outlet. This is due to the high quantities of sales that are made during the holiday season. This is also the case because of Black Friday, which has virtually become a nationwide event. However in recent years a new “holiday” of sorts has come about, Cyber Monday.

Cyber Monday is a marketing term that was created because of the deals that are offered online on the Monday following Thanksgiving. Cyber Monday has gained more and more popularity generating approximately $3 billion in 2015 and in one to the most profitable single days for online retailers.

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One of the reasons Cyber Monday may be gaining in popularity is the shift in the way consumers are shopping. Shoppers are more and more comfortable with shopping online. It has been eclipsing Black Friday in some ways because people are able shop in the comfort of their own homes. This means not having to deal with parking, sifting through products, waiting in lines, and the crowds of people. This is also beneficial because consumers do not have to feel the urgency of snatching up the best products before everyone else. They also do not have to worry about things being out of stock or the store running out of their size and trying to locate a store that still has their sizes. In fact Cyber Monday’s success may have impacted sales on Black Friday. In recent years sales on Black Friday have decreased while sales on Cyber Monday continue to grow. With the two being so close together, shoppers may feel that participating in one is enough.

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Other factors have contributed to the rise of Cyber Monday including the use of social media as an advertising medium as well as increased mobile shopping. While there are not many long-term effects on the stock market, it is important for major retailers to participate by advertising or giving promotions to stay competitive with other companies in their market segment. Cyber Monday has become such a phenomenon that by not being a part of it would serve as a disadvantage.

Rise of the Dad Sandal: Counter Culture’s Surprising Influence on

Birkenstocks. Tevas. Chacos. Mark’s.

mtiwotm3njizmzu0mjaymdayThough you may not recognize the aforementioned shoe brands, you almost certainly have seen these “dad sandal” brands sported by millennials riding the wave of the infamous counter culture trend. Though most of the older generation has laughed and many more have scratched their heads in confusion, the dad sandal lives on as a reflection of the a growing market for “counter culture” products. Today, as millennials are set to inherit a significant portion of the purchasing power, the economic influence of counter culture trends are increasingly prevalent.

Counter culture, often referred to as “being hipster,” is often known as the rise of appreciating originality and going against the grain of what would be considered mainstream. Though appreciation for alternative fashions and trends are not a new phenomenon, they have a new-found importance in today’s economy due to increased globalism and increasing uniformity. As ideas are spread faster than ever before, cultural uniformity is an undeniable byproduct. Now, being “hipster” is influencing decisions of mainstream companies and trendsetters as they look to consume products reminiscent of being different. This sincere appreciation for individualism has manifested itself in an appreciation of smaller, independent companies and brands reflecting authenticity and alternative trends.

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Prada, SS14

Today, appreciation for counter culture has led to the rise of small craft breweries outpacing Budweiser at 16.1 million barrels of beer annually, a twenty percent increase of independent bookstores since 2009, and three billion dollars spent on funding more than four thousand independent feature films in 2014 (New Yorker). Even high-end fashion brands Prada and Marc Jacob’s took influence from counter culture in their 2014 Spring runway shows, where models donned strappy sandals eerily resembling the “dad sandal” made infamous by shoe brand Teva a few years prior (Fashionista). According to Lorie Pointer, global product director of Teva, they have always continued to stay true to their brand. She says, “I think that’s what’s resonating with consumers right now: We are original. This is authentic product. Trends come and go, but Teva has stayed true to our nature.” The authenticity and alternative nature of Teva compared to more mainstream brands is what entices Teva’s alternative consumers.

Teva continues to receive partnership offers with high-end fashion brands like Opening Ceremony (Fashionista) whilst the brand expands its core consumer base. Though brands like Teva catering to an increasing number of consumers seeking authenticity, alternative culture, and originality grow in popularity and influence, big brands and companies are still essential to “high income countries,” as described by Tyler Castle of American Enterprise Institute initiative called Values and Capitalism. These big companies provide goods and services at reduced costs and more efficiently than their smaller counterparts. However, as big companies grow, Americans are increasingly enticed by the diversification and trust provided by small companies like Teva. Perhaps in the future, Americans can expect to see more surprising and confusing fashion choices similar to the “dad sandal” today, reflective of an aversion to lack of diversity created by globalism.

 

Sources:

https://www.theguardian.com/fashion/2015/aug/18/teva-original-universal-weirdest-shoe-trend-ever-is-here-dad-sandal

http://metro.co.uk/2016/09/19/teva-sandals-and-ugg-boots-have-collaborated-and-people-are-reeling-6136565/

http://www.bloomberg.com/news/articles/2016-09-21/the-billion-dollar-race-for-the-ugliest-shoes

How the Hipster Ethic Is Revitalizing the American Economy

http://www.forbes.com/2008/10/01/hipster-buying-power-forbeslife-cx_ls_1001style.html

http://fashionista.com/2014/03/how-tevas-became-the-most-unlikely-it-shoe-of-the-fashion-set

http://www.newyorker.com/business/currency/small-bountiful-small-business-craft-beer

How do internet influencers make money?

The economy of Chinese internet influencers has a chance to be even bigger than China’s film market. CBN Data, a commercial data company associated with Alibaba, projected the internet influencers market to worth 58 billion yuan in 2016, exceeding the 44 billion yuan box office revenue in 2015.

“Internet influencer(网红)” is one of the most popular terms on Chinese social medias. They usually refer to individuals with at least half a million followers on social media sites, such as Weibo and other live stream sites. According to Xinhua News Agency, there are currently over one million internet influencers in China, and about 80 percent of them are young female. Many became famous by sharing lifestyle, experience and opinion.

There are a few types of influencers. Some are content creators; they produce content that audience tend to share, such as video clips and twisted photos. Some are “self-media” operators; they managed to build up their own media sites and have loyal followers. Some are live-stream experts; they could live-stream them eating noodle and have thousands of viewers.

Just as on Youtube, Chinese internet influencers deliver the content audience want to see. News; comforting feeds; funny video clips; makeup and cooking tutorials… They are not necessarily as famous as celebrities, but they are the opinion leaders of their own circles. But what makes some of them different from Youtube influencers is that many of them own an online store on Taobao.

Using their social influence to promote their own shop on Taobao is an common way for internet influencers to monetize their social power. Zhang Dayi made about 300 million yuan in 2015 by selling clothing and accessaries on Taobao — doubling the amount of what Chinese actress Fan Bingbing made last year.Items on her site are generally affordable — mostly within 600 yuan. Dayi is the model for her entire clothing line. She is good at personal branding; the proof is that her fans often empty her stock of new arrivals within minutes after order begins.

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Live-streaming is another way to make quick money. Most of the live-streaming sites have different gift options for viewers to choose, which allows them to express their appreciation to the influencers. Gift prices vary from one to a couple hundred yuan. The streaming sites take a portion of the gift value (also vary from site to site, from 30 percent to 70 percent), but many influencers are still able to receive a decent amount. Making a couple thousand yuan daily is very common for them.

Many internet influencers also make money by attaching advertisement to their social media posts. Papi Jiang is one of the top influencers in China. She is a content creator focusing on producing satirical video clips, and she has 20 million followers on Weibo. Earlier this year, Papi received 12 million yuan in venture capitol to establish her own short video platform. She is so influential that auction for her advertisement became an public relations event — the bidding went from 217,000 yuan to 22 million.

However, Papi recently announced to end her partnership with the investor and to return all capitol she received. As internet influencers’ traffic highly demand on their update consistency and content quality, how business can cooperate with influencers in longterm still remains a question.

FDA stopping innovation? Vaping Industry and FDA Ruling

blog-fdavsvapeThroughout the 4 years I have been walking on the USC campus, I have observed that the number of e-cigarette smokers (or vapers) has increased. This is interesting because there have been multiple anti-vaping campaign on public billboards, bus advertisements, and TV advertisements. The campaign Stillblowingsmoke has been around in California since 2015 and it was funded by Food and Drugs Administration. Yet, the vaping industry have been growing its sales revenue from $20 million in 2008 to $3 billion in 2015. Most consumers like myself vape to quit smoking and there has been successful data found in the United Kingdom. The researchers in the University of London found out that the chance of quitting smoking cigarettes rises up to 50% with vaping devices compare to the traditional anti-smoking aids like nicotine gum or patches. It seems good and all, but the recent regulation put by FDA has put a huge hinge on the vaping industry.91506-14288673495081792-devon-shire

In this year’s May, FDA finalized regulations on tobacco products and e-cigarettes. According to Washington Post article regarding this regulation, the regulation does not affect tobacco products but affects significantly on vaping products. The article states that there is a “part of the rule that ‘deems’ e-cigarettes to be tobacco products and subjects them to extensive regulatory requirement is likely to harm public health than to help it”.

E-cigarettes are fairly young product and the extent of its harm is still in needs of further long-term research; however, the recent findings in Public Health of England in 2015 stated that the use of vaping products are about 95% safer than smoking tobacco AND they can help smokers to quit. public-health-england-e-cigarette-safetyWhy is the regulation necessary, then? The mission statement of the FDA is “responsible for protecting the public healthy by assuring the safety, efficacy and security of human and veterinary drugs, biological products, medical devices, our nation’s food supply, cosmetics, and products that emit radiation”. With that in mind, it does not make much sense why the FDA would put regulations on them. However, the vaping industry associates speculate the Big Tobacco being involved with the FDA because the regulation helps the Big Tobacco to lessen its competition.

The regulation stated above has more dreadful effect on the vaping industry than just deeming its products as tobacco products. According to article in The Fiscal Times, the vaping products needs to apply for tobacco product acknowledgement by the FDA. For that FDA acknowledgement application, it costs between $3 million to $20 million and will take average of 1,713 hours to complete. For the industry that is composed of small business owners, the new regulation sets a huge burden on them to continue the businesses.

For Big Tobacco, this regulation is hugely beneficial because it can decrease the size of vaping industry and the consumers will not have much option other than cigarettes. Considering how this regulation is set up by the FDA, this seems wrong because the Big Tobacco should be the least industry the FDA should help. The speculations go on about how Big Tobacco lobbies the FDA so much to secure its market. Though this speculation sounds ironic, the consumers of vaping industry and the store owners can only think how the innovative vaping industry is becoming the victim of capitalism.

Black Friday: Great for scoring deals, not for predicting the economy

Stuffed to the gills with turkey, dressing, cranberry sauce, and mashed potatoes, millions of Americans will descend on nearly ever major retail store after gobbling up their Thanksgiving feast on November 24.

What was once a one-day shopping spree at the beginning of the holiday season has turned into a five-day consumer spending marathon. Contrary to its name, Black Friday sales generally begin on the Thursday of Thanksgiving and continue to Saturday followed by Small Business Sunday and Cyber Monday.

This year’s Black Friday consumer spending is projected to be the highest ever, reaching the $3 billion mark. Between the biggest shopping days of the weekend, Thanksgiving, Black Friday, and Cyber Monday, Adobe Digital Insights predicts total spending to be $8.4 billion.

Considering that 68% of the GDP of the United States comes from consumer spending, investors and economists have used sales figures from Black Friday as a leading economic indicator. High sales are interpreted to depict strong spending throughout the holiday shopping season while low sales are cause for concern for stores and investors alike.

While there is much buzz about predictions leading up to the big day, some are not convinced that Black Friday figures correlate with overall holiday shopping success. Some opponents claim that sales figures released by various organizations, the National Retail Federation and the U.S. Commerce Department, are often conflicting.

One study, conducted by economist Paul Dales, found that Black Friday shopping has historically had no correlation with the outcomes of American holiday shopping as a whole. In 1998, Black Friday percent change from year-to-year retail sales increased while the same metric for the holiday season as a whole decreased. Contrarily in 2009, percent change in Black Friday sales dipped while holiday season retail sales decreased precipitously.

These figures fail to communicate an association between Black Friday spending and holiday spending or the economy at large.

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A comparison between percent change in Black Friday retail sales and annual GDP growth do not always match up either. Most noticeably after the 2008 financial crisis, Black Friday spending dropped off but not nearly to the degree that the American economy shuttered following the collapse of the housing market.

Even so, Black Friday shopping makes up a considerable amount of annual American consumer spending which is factored into GDP but it should not be seen as a highly dependable indicator of economic health.

The Cost of Black Friday

For many Americans, this time of year is filled with family memories, food, and celebrating holidays.  But for over 74.5 million, this time is also associated with intense shopping for Christmas presents and overcrowded malls.

Shoppers vie for copies of video games at a Black Friday sale at a Wal-Mart Stores Inc. store in Mentor, Ohio, U.S., on Thursday, Nov. 24, 2011. Retailers are pouring on the discounts to attract consumers grappling with 9 percent unemployment and a slower U.S. economic expansion than previously estimated. Photographer: Daniel Acker/Bloomberg via Getty Images

The day after Christmas, otherwise known as Black Friday, is typically a time where many Americans head to their local malls in search of door buster deals and savings.

Studies estimate that over 30% of an average retailer’s sales comes from the six-week time period from Thanksgiving to Christmas.

Although almost 100 million Americans are still choosing to shop on Black Friday, and now over Black Friday weekend, the number of Americans has been declining over the past few years.  In 2015, 102 million shopped over Black Friday weekend but when compared to the 2014 numbers (133.7 million), many people are choosing to not partake in the Black Friday festivities.

Black Friday, although still very popular, is no longer becoming the buzzy, attractive thing to do the day after Thanksgiving, as the popularity and willingness of Americans to brave the crowds for a deal declines.

So, why are sales and the number of Americans choosing to shop declining?  As many currently believe, the economy is doing much better than in previous years, so sales should be increasing.

Experts believe that one of the factors leading to the decline in Black Friday shoppers is the lack of credit card debt.  Many shoppers currently are using their own money, or cash, to spend on Black Friday consumption, rather than credit cards.

Also, many people throughout the country are still very concerned about the economic state of the United States, as people are still recovering from the recession and economic crisis of 2013.

Many also attribute the decline of shoppers to the increase in online shopping.  Many of the big-box consumers, like Target and Walmart, offer the same low price deals online.  This encourages many to stay home and avoid the crowds while still being able to save and get the deals that they are looking for.

In 2015, the National Retail Federation (NRF) reported that more Americans shopped online the three days after Thanksgiving than in stores.

While many large retailers look to Black Friday for a substantial portion of their sales, some stores, like REI have chosen to close down on Black Friday completely.  REI now encourages their customers to #OptOutside and pays all their employees time off for the day.rei-black-friday-final-hed-2015

In an interview with Business Insider, REI CEO Jerry Strizke said that he wanted to make a statement against the trend of opening around a national holiday. “I was looking at the chaos of Black Friday and how more and more stores were opening on Thanksgiving and it just didn’t feel right.”

Although Stritzke might feel this way and take a stand against Black Friday shopping, no other retailers have made this move to shut down so far.  As shopping numbers decline, will other retailers decide this is a change to make as well?

http://www.businessinsider.com/rei-closed-on-black-friday-2016-11

http://www.economist.com/blogs/economist-explains/2015/12/economist-explains

https://www.thebalance.com/what-is-black-friday-3305710

 

 

Politics and Football Ratings

Tuesday, November 8, 2016 was a significant day for the United States of America. Some man was elected president of our country, and the NFL passed its first post-election ratings test. This year, we have seen a nation where the National Football League and American politics have been intertwined like never before.

With Colin Kaepernick making his mark on national headlines each Monday morning due to his silent protests during the national anthem, the focus has shifted towards players protesting our newest President-elect. Many areas of the country seem to be unhappy with the results of the 2016 Presidential Election; however, people have decided to revert back to watching football on Sunday.i

Week 10 marked the first set of games played after the election had been wrapped up. The overnight ratings were up after Sunday’s games. To put things into perspective, Game 5 of the 2016 World Series between the Cubs and the Indians amassed an overnight rating of 15.3 compared to 11.6 for the Sunday night matchup between the Cowboys and Saints. With the election over and baseball in the offseason, the Patriots versus the Seahawks drew a 14.3 rating, the best rating on S
unday Night Football
since 2011. Of all the games this season, the afternoon game between the Cowboys and the Steelers drew a 17.8 rating setting the bar for the remainder of the season.03subcubswin-superjumbo-v2
The NFL is all about ratings. As long as people are watching the games and stadiums are filling up, the NFL is making money. For example, it was announced earlier last week that the Patriots versus Jets game on November 27, 2016 has been flexed out of Sunday night and will be played during the late afternoon scheduling. The Kansas City Chiefs versus Denver Broncos game will be replacing the woeful Jets’ game with hopes of boosting ratings.

Although Week 10 looked great for viewers with a staple Seattle-New England matchup to finish the day, it is time to focus on what the following week will bring. If ratings continue to grow in this fashion, which is expected, you can assume these matchups will only get better. With playoffs around the corner, teams are fighting for their lives and the opportunity to hoist the Lombardi Trophy. This stiff competition drives fans to watch their favorite teams battle it out.

We still do not know the actual answer behind the spike in ratings for the most recent week of football, but we can assume that it had to do with the political debates and other championship games. Although the country is split between who they supported, people will look towards football Sunday as an escape and a way bring people of all races, genders, and ethnicities together under one roof. As a result, fans will continue to spend money and the NFL will continue to make money no matter who is President.bradying

The Appeal of Spirit Airlines

For some Americans, low airfare carriers such as Spirit Airlines is the difference between reuniting with loved ones for the holidays and sacrificing family to save a few bucks. The inevitable scramble for airline tickets is upon us, which forces us to evaluate our options. The appeal of Spirit Airlines is obvious: how can you say no to a cheap flight when life in America becomes increasingly unaffordable? However, the unfortunate reality is Spirit Airlines completely takes advantage of their promise to provide low airfare costs.

According to Andrew Schmertz from the Huffington Post, Spirit has some of the worst customer service reviews out there. Small, uncomfortable seating along with a barrage of baggage fees. Free carry on? No such thing. Any bag over 40lbs will cost you $30, up to $100 for larger bags. Free drinks or peanuts are nonexistent, and delays are commonplace. Nonetheless, the worst offense of all is the treatment of their workers. Back in 2015, there were reports of a multitude of delayed flights due to “bad weather” reports that did not even exist. The theory was that pilot and crew strikes were the real reason for the delays, but this was never confirmed. This is not surprising as the employee reviews are far from flattering. Low wages and poor management are common complaints, as Spirit has the worst customer service known to mankind.

Despite all this, Spirit Airlines still remains a go to low airfare carrier. At the end of the day, Schmertz believes “economy over convenience” is the driving force of Spirit’s success.

The real question is, are they making as much money as they could be? With all those extra charges, is their net income any better? According to Yahoo Finance, the share price is at a stable $53.11. Compared to other airlines like Southwest with a market cap of $29.5 billion, their market cap is quite small at $3.68 billion. Spirit’s quarterly report revealed their net income was $61.9 million in the first quarter of this year, $73.1 million in the second quarter, and $81.4 million by the third quarter. Overall, they seem to be doing pretty well. Their expenses are not as high as other airlines as they do not fly to as many locations. It seems that Spirit Airlines, which puts pressure on other airlines to lower airfares. However, this will lead to lower profits overall for airlines like Southwest or United as they spend more on their flights than Spirit does. Time will tell how long Spirit will remain a competitor in the airline industry, but for now, terrible customer service and endless fees are worth it to hard working Americans.