National News

Dollar stores adapt to an improving economy

Marketplace - American Public Media - Mon, 2014-07-28 13:33

There's really only one reason consumers shop at the dollar store. 

Joe Feldman,  Senior Managing Director and Assistant Director of research with Telsey Advisory group, says Family Dollar played around with its raison d'etre more than was wise: “One would think that a dollar store would be at an everyday low price." But, Feldman notes, its name notwithstanding, Family Dollar has been embracing a multipricing strategy - which wasn't a hit with consumers. 

“Maybe they’re not shopping at Family Dollar, they may be shopping at Dollar General,” he says, referring to one of the store's competitors.

The entire dollar store industry has slowed down this year. One reason — middle and upper middle class consumers can now afford to shop somewhere else.

Robert Campagnino, head of consumer research at SSR, says dollar stores have started selling higher-margin discretionary items which can prove to be problematic.  If there is a recovery, says Campagnino,  lower income consumers are not feeling it.

“So what’s happened when their consumer has been under pressure is that higher margin category has been where the sales weakness has been,” he says.

Even some staples are a hard sell. Like food, which Sandeep Dahiya, a professor of finance at Georgetown University’s McDonough School of Business, says dollar stores have been increasingly getting into.

“The operations involved in selling something that has low shelf life is very different than selling soap. Soap doesn’t go bad... If that three pound chuck doesn’t get sold today tomorrow it will be thrown out,” he says.

Family Dollar says its sale means a good deal for shareholders, employees and shoppers. Joe Feldman says Dollar Stores, all of them, need to continue to make sure they have the right price.

What the Zillow-Trulia deal means for real estate

Marketplace - American Public Media - Mon, 2014-07-28 13:33

During the housing bubble, websites focused on the real estate sector sprung up like "for sale" signs in a hot neighborhood. Over the past couple of years, out of sight of the headlines, those companies have been merging and buying each other out. It's called "a roll-up," and it happens when a sector begins to mature.

In the last couple years, Zillow snapped up New York apartment site StreetEasy and HotPads. Trulia bought Market Leader and last month was rumored to be close to buying Realtor.com. Today came the biggest deal yet: Zillow said it agreed to buy rival Trulia for about $3.5 billion. The pair will create the proverbial 800-pound gorilla for online real estate. Part of the reason for the merger-mania is that when it comes to online real estate, bigger is pretty much always better.

"In internet-based economies, scale matters a lot," says Nic Retsinas, a professor of real estate at the Harvard Business School. "And as the two largest players in this marketplace, the possibility of them coming together gave them advantages of scale."

Together Zillow and Trulia will command more than 60 percent of online real estate traffic. That mega-market share is a big part of the reason we’re seeing this deal.

"As one company takes a leadership position, it amasses enormous capital," says Glenn Kelman, CEO of real estate site Redfin. "So you see Wall Street really rewarding the number-one player in the space and that gives them the capital to buy other companies."

The real estate market is recovering slowly, but the online real estate space is booming. Redfin is growing by 50 percent a year.

Growth is likely to continue as more people get online and the internet generation comes of home-buying age. "People do love to look at what their house is worth," says Richard Green, director of the USC Lusk Center for Real Estate. "And, let’s face it, they want to look at what their neighbor’s house is worth."

Still, Green doesn’t think we’ll see many more mergers of this kind. He says most of the deals that could be done have been done.

It's Boom Times For Pop-Up Shops As Mobile Shopping Clicks

NPR News - Mon, 2014-07-28 12:56

One-click online shopping is changing how we shop. Stores with leases as short as a day are proliferating — meaning a storefront can be a designer clothing store one day and a test kitchen the next.

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Sending 57,000 kids back to their home country costs

Marketplace - American Public Media - Mon, 2014-07-28 12:30

From October 2013 to June 2014, more than 57,000 unaccompanied minors have migrated to the United States, most from El Salvador, Guatemala and Honduras. One solution for dealing with these children is to send them back home, a plan both President Obama and congressional Republicans endorse.

But with that many kids and toddlers being juggled around the system, that simple-sounding solution could actually create an even bigger strain on resources.

"Money would help deal with the influx now," says Esme Deprez, U.S Border Reporter for Bloomberg Businessweek. "We’re seeing shelters overwhelmed, we’re seeing processing centers that are run by border patrol agents completely overwhelmed, courts overwhelmed as well. The system is being stretched at every turn."

The White House has asked Congress for $3.7 billion in emergency funds, but Deprez says there is not a lot of hope that Congress will act.

"They’re going on break for five weeks on July 31," says Deprez. "So, even if they do pass separate bills in the House and Senate, we don’t know if they’re going to come to an agreement and reconcile the two."

If Congress were to approve the emergency funds requested, it would include $879 million to pay for the minors’ prosecution, deportation and to help expedite their court hearings.

"The bulk of the money would go to care for the newly-arrived children and the shelters," says Deprez.

Listen to the full conversation in the audio player above.

In Colo., An Effort To Ease Court Confusion Over Same-Sex Marriage

NPR News - Mon, 2014-07-28 12:27

The Colorado attorney general has asked the state's Supreme Court to stop same-sex marriages.

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After 5 Weeks Of Haggling, Congress Inks Bipartisan VA Bill

NPR News - Mon, 2014-07-28 12:25

Congress has reached a bipartisan deal to reform the Department of Veterans Affairs, after nearly two months of tense negotiations.

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House Votes To End Full-Fare Rule For Airline Tickets

NPR News - Mon, 2014-07-28 12:16

The airline industry and its unions support the bill, which would allow them to list ticket prices without taxes and fees. Consumer groups say that will lead to deceptive marketing.

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Gag rules: illegal, but alive and well

Marketplace - American Public Media - Mon, 2014-07-28 12:15

The National Labor Relations Act of 1935 (NLRA) "guarantees basic rights of private sector employees to organize into trade unions, engage in collective bargaining for better terms and conditions at work, and take collective action including strike if necessary."

Despite the NLRA, some companies still threaten their employees with lowering their pay or hours and even with termination if they discuss their pay with other employees.

"Gag rules are illegal," says Nancy Koehn of the Harvard Business School. "But there is no question that they are alive and well in America."

There are many disadvantages for workers who don’t know if they’re getting paid fairly or not, says Koehn.

"If you have no sense of what your pay is on some kid of latter of compensation across the organization, you have no sense of what kind of organization this is in terms of how they reward people for a job well done," says Koehn.

Listen to the full conversation in the audio player above.

International Court Rules Against Russia In $50 Billion Decision

NPR News - Mon, 2014-07-28 12:13

Russia says it will appeal an unfavorable decision by a court in The Hague. The Permanent Court of Arbitration awarded $50 billion to shareholders of the defunct Yukos oil company.

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An Uneasy End To Ramadan In Gaza, Where Fighting Intensifies Once More

NPR News - Mon, 2014-07-28 12:09

NPR's Emily Harris reports on the Muslim holiday of Eid in Gaza, where one where one family traces the course of three weeks of war in broken bread, temporary shelters and mourning for their dead.

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A Deal Between 'Dollar' Stores Raises The Stakes Against Wal-Mart

NPR News - Mon, 2014-07-28 12:09

The slice of retail aimed at America's most budget-conscious consumers is consolidating. Dollar Tree is buying Family Dollar for $8.5 billion, a deal encouraged by activist investors Carl Icahn and Nelson Peltz. The new company will have 13,000 stores, making it a more formidable competitor — in size, at least — to Wal-Mart.

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Teacher Tenure Fight Spills Into N.Y., Where A New Lawsuit Brews

NPR News - Mon, 2014-07-28 12:09

A new salvo has been fired in the fight over teacher tenure. A group led by former TV anchor Campbell Brown filed a complaint in New York state court, arguing that tenure laws are preventing the state from providing every child with the "sound, basic education" its constitution guarantees.

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Taliban In Pakistan Derail World Polio Eradication

NPR News - Mon, 2014-07-28 12:07

The militant group threatens to kill parents who immunize their children. As a result, polio has come roaring back in Pakistan. Eradication now hinges on whether the country can control the virus.

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Russia ordered to pay $50 billion to oil shareholders

Marketplace - American Public Media - Mon, 2014-07-28 12:03

There was more bad news for Russia today. The Hague, an international arbitration court, ruled the country acted improperly when it confiscated the assets of the oil company Yukos back in 2003.

The court’s ruling requires Russia to pay $50 billion to former Yukos shareholders but “there’s no likelihood that they will simply roll over and hand the cash over” says the BBC’s Andrew Walker.

Russia has already says it will appeal the ruling but Walker says shareholders of Yukos could fight back. They could get a court order to seize some of Russia’s commercial assets but that would likely take years.

The ruling probably won’t mean much to other companies with an eye to invest in Russia. Walker says Russia already has a poor reputation when it comes to creating a good climate for business.

“Investors that get involved in Russia are typically doing it because they think that the energy resources there are so large that there must ultimately be the potential to make money. “

Walker notes that tomorrow, EU officials will meet to consider sanctions against the energy, arms, and financial sectors in Russia.

Teacher Tenure Lawsuits Spread From California To New York

NPR News - Mon, 2014-07-28 12:03

Why are so many low-income and minority kids getting second-class educations in the U.S.? That question is at the center of the heated debate about tenure protections and who gets them.

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Medicare's Costs Stabilize, But Its Problems Are Far From Fixed

NPR News - Mon, 2014-07-28 11:43

Medicare's trust fund is projected to have money until 2030, four years longer than predicted last year. But the fund that pays for disability benefits could run dry just two years from now.

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Another Appeals Court Tosses Same-Sex-Marriage Ban

NPR News - Mon, 2014-07-28 11:41

A lower court's ruling that threw out a Virginia law has been upheld by the 4th U.S. Circuit Court of Appeals. The ruling quickly led North Carolina to drop its defense of its own ban.

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A small UK company with big graphene dreams

Marketplace - American Public Media - Mon, 2014-07-28 11:05

It’s not often that anyone speaks highly of carbon, given the part that element plays in climate change. But a growing number of companies are eagerly promoting carbon in one specific form: It’s called graphene, and it is said to be the strongest, thinnest and most flexible material ever discovered.

First isolated by a British university in 2004, this so-called "wonder product" has sparked a multi-million dollar corporate scramble to exploit the breakthrough.

“This is akin to the invention of silicon or plastics,” says Jon Mabbit of Applied Graphene Materials (AGM), a small start-up in northeast England that has joined the great graphene rush. “This is a disruptive technology. It has the potential to revolutionize countless markets.”

One atom thick, the substance is so thin that it’s regarded as two-dimensional. And it has an impressive list of other properties: 100 times stronger than steel; far more flexible than rubber; the world’s best conductor of heat and electricity; almost totally transparent and yet completely impermeable. Among the uses touted: super-fast computer chips; cellphones you can roll up like a piece of paper and stuff into your pocket; and super-thin condoms.

But the graphene “prospectors” face some major hurdles.

“There’s an enormous leap between what you can do in the laboratory and having a product that is technologically ready," says Valerie Jamieson of New Scientist magazine. "Graphene’s been stymied by the difficulty of making large sheets of the stuff. A tiny flaw can impair the product’s conductivity, making it useless in electronics."

Jamieson is also concerned about cost. Graphene sheets cost $60 per square inch to produce but that needs to come down to $1 a square inch for use in computer chips, and 10 cents for touch screen displays. And there’s another, strategic worry: the vast bulk of the graphite from which graphene naturally derives would have to be mined in China.

But Mabbitt of AGM reckons that his company has cracked some of those problems. He and his colleagues have developed a method of synthesizing the substance out of cheap alcohol, so there is no need to dig it out of the ground at great expense. The company claims it can grow a ton of graphene a year with one relatively small piece of equipment. And they’re not turning out sheets for use in consumer electronics, so tiny flaws don’t matter. They aim to use their graphene as an additive to paints and lubricants.

"The impermeability of graphene makes it fantastic for stopping moisture attacking a ship’s hull," says Mabbitt. "It also prevents sea-life from building up on the hull. So potentially you have a rust and barnacle-free vessel. That gives you a double whammy: low-maintenance and improved efficiency through water, which equates to fuel-saving."

Graphene-coated aircraft – he says – would be both lighter and lightning proof. He believes the range of industrial applications for graphene is enormous. Not as sexy as roll-up cell phones and ultra-thin condoms, perhaps, but a wonder material nevertheless.

Netanyahu: Israel Is Prepared For 'Long Operation' In Gaza

NPR News - Mon, 2014-07-28 10:26

Ignoring calls for a cease-fire, Israel's prime minister said the country's incursion into Gaza wouldn't halt until its "mission is accomplished."

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Midwestern college dilemma: fewer local kids to tap

Marketplace - American Public Media - Mon, 2014-07-28 10:22

Tom Crady wants high school kids across the country to think about attending Gustavus Adolphus College, even if they mangle the name.

"Some won't say the name at all. They just say, 'Tell me how you pronounce the college's name,'" says Crady, vice president of enrollment at the college, which is pronounced gus-TAY-vus uh-DOLPH-us.

The liberal arts college, perched on a bluff in southern Minnesota, is seeing fewer applicants from its home state, as well as other Midwestern states. So Crady is courting potential students from far-flung places like Texas and even India.

"We go farther and longer distances than ever before," Crady says.

Crady says the changes are occasioned by big demographic shifts. In the '90s, birth rates fell nationally. On top of that, lots of people migrated south and west. That all spells a decline in high school graduates in the Northeast and Midwest today. That's according to Brian Prescott, who directs research at the Western Interstate Commission for Higher Education.

"You can't grow 18-year-olds or high school graduates in a laboratory," Prescott says.

Prescott estimates there's been a 7 percent drop in high school grads in the middle of the country just over the past six years.

Colleges as far away as Dartmouth and Harvard have noticed fewer Midwestern applicants. But experts say the demographic changes are not a big deal for elite institutions with fat endowments and kids lined up at the door. Small, liberal arts colleges that are not household names will likely suffer more as tuition dollars shrink.

"It's very tough right now not only finding the number of your potential applicants dropping but knowing that there are others competing with you to try to get those graduates," says Diane Viacava, vice president in the higher education division at the credit rating agency Moody's Investors Service.

Viacava says many small Midwestern colleges are struggling with the shifting demographics. Among those rated by Moody's rates, a couple dozen have seen two consecutive years of declining enrollments.

Many are bumping up their recruiting budgets and offering big discounts on tuition.

"What we're finding is that some of the Midwest colleges are discounting over 50 percent to get a student to come to the college," Viacava says.

That's true at Gustavus Adolphus. On average, the college cuts its $40,000 annual tuition by about half.

But, Viacava says, as revenue falls, colleges have to figure out how to cut costs in other areas, like faculty.

"Given that many of them could have a somewhat inflexible expense structure, that can prove very challenging for operations," Viacava says.

Even some public institutions are feeling the pain. Minnesota State University Moorhead recently blamed changing demographics when it announced plans to eliminate several low-enrollment programs.

If there are any winners in this scenario, they may be the Midwestern high school students who are in such short supply. Brayden Yel begins her senior year of high school in a St. Paul suburb this fall. On a recent visit to Gustavus Adolphus, Yel said she's received a lot of emails and letters from Midwestern Colleges.

"Absolutely," Yel says. "Lots of asking for tours and stuff like that."

So far Yel doesn't seem to mind all the attention.

Region Class of 2008 (actual) Class of 2014 (projected) % change Midwest (IL, IN, IA, KS, MI, MN, MO, NE, OH, WI) 705,639 656,022 -7 Northeast (CT, ME, MA, NH, NJ, NY, PA, RI, VT) 552,289 526,820 -4.6 South (AL, AR, DE, DC, FL, GA, KY, LA, MD, MS, NC, OK, SC, TN, TX, VA, WV) 1,031,773 1,051,890 2 West (AK, AZ, CA, CO, HI, MT, NV, NM, ND, OR, SD, UT, WA, WY) 711,636 700,086 -1.6

Source: Western Interstate Commission for Higher Education

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