Business

Sam’s Club is raising annual membership fees, as inflation drives store trips and membership is at an all-time high.
Starting Oct. 17, fees will increase from $45 to $50 for club members and from $100 to $110 for members of its higher-tier level, “Plus.”
The Walmart-owned warehouse club has grown during the Covid pandemic and benefited from fuel discounts during inflation.

A sign hangs outside a Sam’s Club store on January 12, 2018 in Streamwood, Illinois.
Scott Olson |Getty Images

Walmart-owned Sam’s Club said Wednesday it will raise its annual fees this fall, as the warehouse club’s membership hovers at a record high and inflation-pinched shoppers seek deals on bulk items.
Fees will increase to $50 from $45 for club members and to $110 from $100 for members of its higher-tier level, “Plus,” which includes some additional perks. The changes take effect Oct. 17.

It marks the first fee hike in nine years for the entry-level membership. Sam’s Club has not raised the price of the “Plus” membership since it debuted in 1999.
That brings Sam’s closer in price to rival Costco, which charges $60 a year for its basic membership and $120 for its higher-tier “Gold” membership.
Sam’s Club is hiking annual fees as warehouse clubs benefit from budget-conscious customers. Shoppers turned to Costco, BJ’s Wholesale Club and Sam’s Club during the early months of the Covid pandemic to stock up on huge packs of toilet paper, household cleaners and cans of soup. In recent months, those shoppers have sought relief from inflation by seeking out cheaper gas and high volume discounts.
At the same time, inflation may make the increase sting. In a note to members Wednesday afternoon, Sam’s Club CEO Kath McLay said the company is “mindful of the financial pressure on wallets right now.”
With that in mind, she said, Sam’s Club will pick up the tab this year by reimbursing the fee increase in Sam’s Cash that can be used at its stores.

Investors have speculated about a potential hike in Costco’s fees, too. The club last raised its fee in June 2017 and has historically bumped it up every 5½ years, which would put it on track for this year.
Costco CEO Craig Jelinek shook off talk of an increase on CNBC’s “Squawk on the Street” in July. “I can tell you that we think about it every year, but right now, in terms of the membership fee it’s not on the table right at the moment,” he said. “I’ve made it very clear. I don’t think it’s the right time.”
Sam’s Club has almost 600 stores across the U.S. and in Puerto Rico. It does not disclose its membership count, but said in the most recent quarter that it is at an all-time high. Membership income increased 8.9% in the quarter that ended July 31.
Its sales growth is outpacing other parts of Walmart’s business. Same-store sales at Sam’s Club grew 9.5% in the most recently reported quarter versus 6.5% at Walmart U.S.
Chief Member and Marketing Officer Ciara Anfield said Sam’s Club decided to make the move because of investments in recent years, from elevating the quality of merchandise on its shelves to adding new and convenient ways to shop.
In recent years, it has added curbside pickup at stores, offered same-day home delivery, refreshed its Member’s Mark private brand and launched Scan & Go, a smartphone app that people can use to ring up items as they walk through aisle. It has started carrying brands such as Eddie Bauer, La Mer and Banana Republic. And even some of its bakery treats have gotten a gourmet spin, such as cinnamon rolls made with a French baking technique.
She compared the rollout of those new perks to building a house or spending money on renovation projects.
“There’s an expectation that after you invest in this home, it will be worth more,” Anfield said. “We’ve made investments and we believe our proposition, our membership is now worth more.”

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Today’s American dream may be more about being wealthy than having a white picket fence.
Six in 10 adults say they even want to become a billionaire one day, according to a recent report.
But as the wealth gap widens, many also express resentment toward the mega-rich and say billionaires should pay higher taxes.

Michael Bloomberg, (right) founder of Bloomberg LP, and Lloyd Blankfein, chairman and CEO of Goldman Sachs Group, at the 10,000 Small Businesses (1OKSB) Partnership Event in London on Dec. 14, 2016.
Chris Ratcliffe | Bloomberg | Getty Images

Mixed feelings about extreme wealth

At the same time, most Americans have a love-hate relationship with extreme wealth.
“There is a mounting disconnect,” the Harris report found: Six in 10 adults want to become a billionaire one day. Meanwhile, 40% said they despise billionaires. Many also said that billionaires have the responsibility to better society but aren’t doing enough.

As the rich get richer, 66% of adults see wealth inequality as a serious national issue, and nearly half of Americans, or 47%, believe that there should be a limit to wealth accumulation, the report also found. 

A mobile billboard in Washington, D.C., calling for higher taxes on the ultra-wealthy depicts an image of billionaire Jeff Bezos on May 17, 2021.
Drew Angerer | Getty Images

Of those polled, 24% said personal wealth should be capped at less than $1 billion, while 20% said it should be capped somewhere between $1 billion and $10 billion.
There are roughly 200 people in the U.S. who are currently worth more than $10 billion, according to Forbes’ annual ranking of the richest people. Among the top five, Jeff Bezos, Warren Buffett, Bill Gates and Elon Musk are all worth more than $100 billion.   
Meanwhile, extreme wealth inequality was exacerbated by the Covid pandemic, other reports also show.

The richest Americans have continued to benefit from owning equities and real estate, particularly last year when both the stock market and home values soared. As of the end of 2021, the top 1% owned a record 32.3% of the nation’s wealth.
On the flipside, the share of wealth held by the bottom 90% of Americans fell since before the pandemic, to 30.2% from 30.5%.
In the Harris poll, 58% of Americans were resentful of wealth accumulation over this period, when others suffered from the financial fallout brought on by the sudden economic downturn.

Taxing the ultra-rich gains support

“Right now, the average billionaire — there are about 790 of them or so in America — has a federal tax rate of 8%,” Biden tweeted.
The Billionaire Minimum Income Tax would assess a 20% minimum tax rate on U.S. households worth more than $100 million. Over half the revenue could come from those worth more than $1 billion.
But despite growing public support for higher taxes on the ultra-wealthy, billionaire tax proposals have failed to gain traction.
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The fall TV calendar is jam packed with new and returning shows. From fantasy to comedy to true crime, September will deliver content for every kind of fan.
Though the month’s water cooler talk will likely be dominated by the ongoing “Game of Thrones” spinoff and the forthcoming “Lord of the Rings” show, there is plenty of worthwhile television coming to streaming in the coming weeks.

If you’re looking for something new to watch, consider some of these releases hitting Amazon, Discovery+, Netflix, Disney+ and Hulu this month.

‘The Lord of the Rings: The Rings of Power’ (Sept. 1, Prime Video)

“House of the Dragon” may have gotten a two-episode head start, but it will soon have company in the fantasy arena. Amazon has spent over $700 million getting its “Lord of the Rings” show off the ground, and the streamer is no doubt hoping that it will tap into the same vein of excitement that made “Game of Thrones” such a phenomenon.

‘House of Hammer’ (Sept. 2, Discovery+)

This three part docuseries chronicles not only the allegations of abuse and cannibalism that derailed the career of movie star Armie Hammer, but also dives into his family history starting with his great grandfather, the oil tycoon Armand Hammer.

‘Cobra Kai’ Season 5 (Sept. 9, Netflix)

The hit Netflix show returns for its fifth season, which will see “Karate Kid” protagonist Daniel LaRusso teaming up with Johnny Lawrence to stop Terry Silver from spreading his violent karate philosophy across the San Fernando Valley.

‘American Gigolo’ (Sept. 10, Showtime)

Jon Bernthal stars in the reimagining of the 1980 Richard Gere film. The series will follow Bernthal’s Julian Kaye, a former sex worker searching for answers after spending 15 years in prison for a murder he didn’t commit.

‘The Handmaid’s Tale’ (Sept. 14, Hulu)

The dystopian drama returns for what may potentially be its final season, setting up June and Selena for an explosive confrontation following the events of the season four finale.

‘Abbot Elementary’ Season 2 (Sept. 21, ABC)

Fresh off of its 7 Emmy nominations and a new TV deal for creator Quinta Brunson, ABC’s smash hit “Abbot Elementary” returns for a full, 22-episode season two.

‘Andor’ (Sept. 21, Disney+) More

Walmart is investing in Sustainable Beef, a rancher- and beef producer-owned company, to expand its supply of Angus beef.
The nation’s largest grocer is investing in agriculture and food production as consumers eat differently and want to know more about where their food comes from.
Fresh groceries are a growth driver for the retailer, said Tyler Lehr, senior vice president of merchandising for deli services, meat and seafood for Walmart U.S.

The assortment in Walmart’s beef department has reflected changing consumer preferences, as more of them opt for higher quality cuts of meat.
Melissa Repko | CNBC

As more grocery shoppers opt for higher quality meats, Walmart said Wednesday that it is investing in a company led by ranchers and beef producers to bulk up its supply.
The retailer is taking a minority stake in Sustainable Beef, which plans to open a processing facility in North Platte, a small town in west-central Nebraska that is home to the former ranch of storied Western showman Buffalo Bill Cody. It expects to break ground next month and create 800 jobs.

Walmart declined to disclose the specific amount of its investment. As part of the deal, however, the retailer will get the majority of beef produced at the facility, which is expected to open by late 2024, said Tyler Lehr, senior vice president of merchandising for deli services, meat and seafood for Walmart U.S. It will also get representation on the company’s board.
For the retailer, the deal means a larger, more consistent supply of beef, including better cuts. For shoppers, it will show up in the form of ground beef and steaks — including ribeye, sirloin and New York strip — in its meat department. Walmart will source Angus from the company, a type of beef that comes from a cattle breed often associated with more flavor because of its marbling.
The beef will hit store shelves in the central part of the country starting in late 2024, Lehr said.

A beefed-up grocery strategy

Walmart, the country’s largest grocer by revenue, is making investments in agriculture and food production as consumers eat differently and crave more information about the items they toss in their shopping carts. The company invested earlier this year in Plenty, a California-based startup that grows leafy greens indoors and closer to urban centers. The agriculture method of vertical farming uses less water, eliminates the need for pesticides and requires less transportation to get to the store shelf.
Two years ago, Walmart opened a beef-processing facility for Angus beef in Thomasville, Ga., and in 2018, it opened a high-tech dairy plant in Fort Wayne, Ind.

The Sustainable Beef investment also feeds Walmart’s environmental and social commitments. By 2030, the retailer, along with the company’s foundation, has pledged to protect, restore or more sustainably manage at least 50 million acres of land and 1 million square miles of ocean by 2030. And two years ago, it said it would work toward sourcing more sustainable fresh beef by working with ranchers on grazing management, grain sourcing and more.
Groceries drive almost 60% of Walmart’s U.S. sales, according to its most recent annual report. Fresh groceries like fruits, vegetables and meats are especially a growth driver and influence where people choose to shop, Lehr said.
“Customers continue to tell us one of the biggest points of differentiation is they want to know where it comes from,” Lehr said. “They like to know and learn a little bit more about it rather than just seeing it on the meat counter. There’s a greater drive and desire for them to know what the backstory is on the products that they’re purchasing in store.”

Sizzle and steak

During the past months of rising inflation, Walmart’s reputation for low prices has attracted middle- and high-income shoppers looking to save on groceries and essentials, including some who may seek premium cuts of meat. In the most recent quarter ended July 31, Walmart said about three-quarters of the company’s market share gains in food came from customers with annual household incomes of $100,000 or more. 
The discounter cut its full-year profit guidance last month, but increased its projections for sales growth, citing gains in its grocery category.
Grocery shoppers, especially younger generations, expect more from their food — even as they watch their budget, said Rob Dongoski, food and agribusiness leader for consulting firm EY. Along with seeking tasty and affordable items, they consider other attributes, such as whether an animal was treated humanely or if produce was grown in a more sustainable way. They may look for labels associated with health or wellness, too, such as “organic,” “grass-fed” or “antibiotic free.”

If you look at Gen Zers and millennials, cars and houses are more needs-based and food is more status.

Rob Dongoski
food and agribusiness leader, EY

And, Dongoski said, some of those consumers are willing to pay more for them.
“There’s a renewed interest in food,” he said. “Boomers and Gen Xers affiliated status with their car and their house and food was a necessity and needs-based purchase. If you look at Gen Zers and millennials, cars and houses are more needs-based and food is more status. We’ve seen a real difference in that attitude.”
Those evolving preferences have changed the look of Walmart’s meat department, too. On a store tour earlier this summer with Walmart’s Chief Merchandising Officer Charles Redfield near the big-box retailer’s Arkansas headquarters, he pointed to fridges full of beef.
Inside of the chilled area, there is now a larger number of steaks on black trays versus white ones. The black trays are for choice beef, a higher-quality cut that’s juicier and more flavorful, and the white trays are for select beef, a lower standard of meat that’s less marbled and tender.
Three or four years ago about 70% of steaks at stores were in the white trays, he said; now, the mix has flipped.

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Bed Bath & Beyond said it has secured more than $500 million in new financing as it seeks to steady its business ahead of the holiday season.
It also announced layoffs and store closures as a way to cut costs.
The struggling retailer announced the moves ahead of an investor update early Wednesday.

A Bed Bath & Beyond store is seen on June 29, 2022 in Miami, Florida.
Joe Raedle | Getty Images News | Getty Images

Bed Bath & Beyond said Wednesday that it secured more than $500 million in new financing and that it is closing stores and laying off staff as it seeks to fix its struggling business.
The moves were part of a wave of changes the home goods retailer announced ahead of an investor update early Wednesday.

As part of its turnaround push, Bed Bath said it will close about 150 of its “lower producing” namesake stores and reduce about its workforce by about 20% across its corporate and supply chain staff. The company said slowing sales have carried into the current fiscal quarter, with same-store sales down 26% for the three-month period ended August 27— a steeper drop that it has seen in years.
To win back customers, Bed Bath said it will bring back popular national brands to its shelves as part of a merchandise overhaul. Interim CEO Sue Gove said all of the efforts are aimed at regaining the company’s “dominance as a preferred shopping destination.”
“We are embracing a straight-forward, back-to-basics philosophy that focuses on better serving our customers, driving growth, and delivering business returns,” she said in a news release.
The company said that it has gotten a $375 million loan through Sixth Street Partners, a lender that has provided financing to other retailers including J.C. Penney and Designer Brands. It has expanded $1.13 billion asset-backed revolving credit facility, too.
Earlier Wednesday, it said in a filing that it will sell an undisclosed amount of shares. The retailer’s stock was down 26% in premarket trading.

Bed Bath also announced more leadership changes Wednesday, including the departure of Chief Operating Officer John Hartmann. It said that role and the chief stores officer role have been eliminated. Its board ousted former CEO Mark Tritton and Chief Merchandising Officer Joe Hartsig in late June.
The company’s finances and its business are in a challenging spot. As the retailer has spent money on store remodels, new private brands and stock buybacks, its sales have slowed and its excess inventory racked up. Its net losses widened to $357.7 million in the most recent quarter. As of the end of May, it had about $100 million cash compared with $1.1 billion a year earlier.

That precarious position has endangered relationship with suppliers that it counts on to stock shelves and warehouses with goods — especially during important seasons like back-to-college and the Christmas season.
As part of its merchandise overhaul, Bed Bath is dropping some of its nine private labels. It said it will discontinue three of the exclusive brands: Haven, Wild Sage and Studio 3B. It will significantly reduce the inventory of the others. 
Bed Bath’s shares have been on a meme stock-fueled rollercoaster ride for months, rocketing up to $30.06 and falling to a low of $4.38 in the past year. As of Tuesday’s close, shares are down about 17% year to date. Shares closed Tuesday at $12.11, down about 9%.
Read the company’s news release here.
This story is developing. Please check back for updates.

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Bosch will spend $200 million to expand an existing South Carolina facility to build fuel cells for electric heavy trucks, starting in 2026.
Companies including Nikola are planning to use Bosch’s fuel cells in upcoming EV trucks.
The investment is expected to create at least 350 new jobs.

The Robert Bosch GmbH logo sits on the exterior of Messe Stuttgart exhibition center as automobiles pass in Stuttgart, Germany, on Monday, July 18, 2016.
Michael Nagle | Bloomberg | Getty Images

German auto supplier Bosch said Wednesday it will invest more than $200 million to build fuel cells for electric trucks in South Carolina.
Bosch plans to expand an existing factory in Anderson, South Carolina, to build the fuel cell “stacks” starting in 2026. The investment is expected to create at least 350 new jobs at the factory, the company said.

Bosch’s North America president, Mike Mansuetti, said the company decided to invest in U.S. production to support “growing demand” from its automotive customers in North America.
“As our success in acquiring e-mobility business here in the region continues, it’s critical that we have local production capabilities to support our local customers,” Mansuetti said in a statement.
Fuel cells chemically convert the energy in hydrogen gas to electricity, emitting only water. While expensive to build, the devices are finding applications in large electric vehicles that would otherwise require excessively large and heavy battery packs, such as semitrucks, construction equipment and military vehicles.
The fuel cells built by Bosch in South Carolina will be used to power electric heavy trucks, including forthcoming models from Arizona-based EV truck startup Nikola, the company said.
Nikola has begun pilot testing of a fuel cell-powered version of its Tre electric semitruck, with about 500 miles of range. The company expects to begin production of the fuel cell-powered Tre by the end of next year, and to launch a second fuel cell truck with 900 miles of range in 2024.

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As well as diesel and gasoline vehicles, Toyota is known for its hybrid and hydrogen fuel cell offerings.
The Japanese automotive giant’s move comes as major economies lay out plans to reduce the environmental footprint of road-based transportation.
Just this month, the California Air Resources Board approved a rule that will require all new car sales in the state to be zero emission by the year 2035.

A Toyota dealership in Yokohama, Japan, photographed on Feb. 7, 2021. The firm is trying to make headway in the increasingly competitive electric vehicle market.
Toru Hanai | Bloomberg | Getty Images

Automotive giant Toyota said Wednesday it would invest an extra $2.5 billion in a U.S. facility that will manufacture batteries for both hybrid electric and battery electric vehicles.
Toyota Battery Manufacturing North Carolina is set to start operations in 2025, with the firm stating that total investment in the plant will now amount to $3.8 billion.

Norm Bafunno, who is senior vice president, unit manufacturing and engineering at Toyota Motor North America, said the announcement marked “another significant milestone” for the business.
The additional investment in the U.S. is part of a wider investment of up to $5.6 billion in battery production, with Toyota noting that demand for battery electric vehicles was growing.
To this end, the business said it would aim to ramp up “combined battery production capacity” in the U.S. and Japan by as much as 40 gigawatt hours.

Read more about electric vehicles from CNBC Pro

As well as diesel and gasoline vehicles, Toyota is known for its hybrid and hydrogen fuel cell offerings. It is also attempting to make headway in the increasingly competitive battery-electric market, where firms like Tesla and Volkswagen are jostling for position.
This has not been without its challenges. In June 2022, Toyota issued a safety recall for more than 2,000 of its all-electric SUV, the bZ4X.

Toyota may be looking to invest billions in EV battery production, but on Wednesday the business stressed it would also “continue to make every effort to flexibly meet the needs” of customers “in all countries and regions by offering multiple powertrains and providing as many options as possible.”
Indeed, the website of Toyota Europe states that the “internal combustion engine continues to be the most popular means of powering vehicles and it will continue to play a role for the next 20 to 30 years.”
All the above comes at a time when major economies are laying out plans to reduce the environmental footprint of road-based transportation.
Just this month, the California Air Resources Board approved a rule that will require all new car sales in the state to be zero emission by the year 2035.
Elsewhere, the U.K. wants to stop the sale of new diesel and gasoline cars and vans by 2030. It will require, from 2035, all new cars and vans to have zero-tailpipe emissions. The European Union — which the U.K. left on Jan. 31, 2020 — is pursuing similar targets.
According to the International Energy Agency, electric vehicle sales hit 6.6 million in 2021. In the first quarter of 2022, EV sales came to 2 million, a 75% increase compared to the first three months of 2021. More

Logistics company Pitney Bowes will begin testing automated short-haul delivery trucks from startup Gatik.
Gatik trucks will supplement five existing routes in the Dallas area and will run packages between distribution centers.
The partnership gives the global logistics company access to some of the first commercial autonomous delivery trucks on the market and adds to Gatik’s growing footprint in the U.S. short-haul delivery market.

Gatik’s class 6 box truck is deployed for Pitney Bowes
Source: Gatik

Logistics company Pitney Bowes will begin testing automated short-haul delivery trucks from startup Gatik under a new pilot program at Dallas-area distribution centers, the companies announced Wednesday.
Pitney Bowes, which provides logistic services for retailers including eBay and American Eagle, will integrate Gatik’s self-driving box trucks starting in 2023. The trucks will supplement five existing routes in the Dallas-Fort Worth area and will run packages between distribution centers, so-called “middle-mile” delivery. 

The partnership gives the global logistics company access to some of the first commercial autonomous delivery trucks on the market and adds to Gatik’s growing footprint in the U.S. short-haul delivery market.
Gatik, which was founded in Silicon Valley in 2017, aims to automate shorter, business-to-business hauls with fixed, repeatable routes. It launched a partnership with Walmart in 2021, becoming the first commercial delivery company to go completely driverless.
While some autonomous driving systems, such as Tesla’s, have faced heightened scrutiny, Gatik says it’s navigated the difficult environment by limiting its focus on middle-mile routes.
“By constraining the autonomy problem, we can get to the point where the driver comes out [of the safety driver role] faster than anyone else in the industry,” Gatik’s CEO, Gautam Narang, told CNBC in an interview. “We chose the safest possible routes and the easiest possible routes.”
Gatik’s routes do not cross state lines, and they are optimized with the help of regulators to avoid schools, hospitals and unprotected left turns. The trucks used are also smaller than many the trucks of its competitors.

The Pitney Bowes routes will have a safety driver to start, but the company expects to have the trucks completely driverless within a few months. 
At scale, Gatik estimates it could provide up to 30% cost savings for Pitney Bowes. 
Pitney Bowes has begun a national rollout of automation technology in its warehouses, and pending the pilot program’s success, a broader rollout of Gatik’s automated delivery routes could follow.
The startup raised $85 billion in its Series B funding last year and says it can achieve profitability at a site-specific level, as long as two fully driverless trucks are operating each route.

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