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    Apple Store in Oklahoma City Becomes Second to Unionize

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    Workers said pay was adequate and benefits were good, but complained that managers’ practices often seemed arbitrary.Apple employees at a store in Oklahoma City have voted to unionize, becoming the second of the company’s roughly 270 U.S. retail stores to do so.The result, announced by the National Labor Relations Board on Friday night, suggests that an initial victory by a union at a store in Towson, Md., in June was not an isolated development in an organizing campaign that dates back to last year.According to the labor board, 56 employees voted in favor of the union and 32 voted against. The workers will be represented by the Communications Workers of America, which has members at AT&T Mobility, Verizon and media companies like The New York Times, and has sought to represent tech-industry workers in recent years.Sara Steffens, the union’s secretary-treasurer, said in a statement that workers at the store, known as the Penn Square location, had faced an aggressive anti-union campaign, but she predicted that “Apple retail workers across the country will continue to organize, especially after this momentous victory.”Apple said in a statement that “we believe the open, direct and collaborative relationship we have with our valued team members is the best way to provide an excellent experience for our customers, and for our teams.”More on Big TechInside Meta’s Struggles: After a rocky year, employees at Meta are expressing skepticism, confusion and frustration over Mark Zuckerberg’s vision for the metaverse.A Deal for Twitter?: In a surprise move, Elon Musk has offered to acquire Twitter at his original price of $44 billion, which could bring to an end the acrimonious legal fight between the billionaire and the company.Hiring Freezes: Amazon is halting corporate hiring in its retail business for the rest of the year, joining Meta as the latest tech companies to pull back amid the economic uncertainty.TikTok Nears Deal with U.S.: The Biden administration and the Chinese-owned video app have drafted a preliminary agreement to resolve national security concerns over the platform, but hurdles remain over the terms.In interviews, employees at the store said that they received solid benefits, like health care, stock grants and paid family leave, and that their pay had improved over the past several months. The company recently raised the minimum starting wage at its stores to $22 an hour and said it had increased starting wages by 45 percent in the United States since 2018.But workers complained that supervisors’ decisions about hiring, pay and job assignments were often opaque and said a union would bring greater transparency to their store.Leigha Briscoe, an employee involved in the organizing who works in sales, said employees were given very different tasks during the first year of the pandemic, when they often worked from home, with little explanation for the disparities.“Some people were at home making posters, doing drawing projects, and others were on the phone taking calls eight hours a day,” Ms. Briscoe said. “There was a lack of clarity as to what the plan was.”Workers also cited confusion over how to earn promotions at the store.“Some people have been in their current roles for years trying to get promoted and are not really getting anywhere, but whenever they get feedback on an interview for a promotion what they get is very subjective goals,” said Michael Forsythe, another employee involved in the organizing, who helps oversee the repair room at the store.Mr. Forsythe said workers were sometimes told to work on their “customer focus,” but were not given more concrete suggestions like “I want you to have a three-week average of 80 percent customer satisfaction score.”Mr. Forsythe said the idea of unionizing first occurred to him late last year, after employees across the company had begun to protest management’s plans to bring them back to the office. The protest ballooned into a broader campaign, known as #AppleToo, that sought to highlight a variety of workplace problems, including harassment and pay disparities, and caught Mr. Forsythe’s attention.In April, a store in Atlanta filed a petition for a union election, and Mr. Forsythe and other employees at the Oklahoma City store began to discuss unionization.The Atlanta store later withdrew its petition, as the company announced a raise and highlighted the benefits it offered and the potential costs of unionizing, denting support for the union.But by then, the Oklahoma City store had formed an organizing committee and more employees were expressing interest in a union. The Oklahoma City workers filed their petition in early September.Employees said supervisors had responded to their campaign by holding round-table discussions and one-on-one conversations in which they emphasized the downsides of a union, including the dues that workers would have to pay and the possibility that they could lose benefits during the bargaining process. Supervisors also said having a union would make it harder to change workplace arrangements when they were in need of updating, like during the pandemic, according to these employees.Workers at the Oklahoma City store said their market leader, a manager who oversees several locations, was in their store regularly during the campaign, even though they would typically see him no more than a few times a year.Patrick Hart, an employee at the store who helps customers resolve issues with products, said the impact of the company’s response was limited because many employees did their own research about how joining a union would affect them.“We are all extremely educated people — Apple hires a certain kind of person,” Mr. Hart said. “We know how to look into things.” More

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    Reno Is Booming. Some Workers Feel Left Behind.

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    Companies are flocking to the Nevada city, but the rising cost of housing, gas and groceries is making daily life a struggle for many who work there.As an employee at a UPS warehouse outside Reno, Nev., Christina Pixton spends her nights moving thousands of heavy packages on their way to far-flung locales like San Francisco, Phoenix and Chicago.But the warehouse is not air-conditioned, and one night last month, there was no relief outside, either, with smoke from a California wildfire more than 100 miles away causing hazardous air quality. For Ms. Pixton, who has asthma, the irritation to her lungs was the latest challenge she had to learn to navigate in Reno.These are boom times in and around Reno. Warehousing and casinos have long been the city’s main businesses, and the surge in e-commerce since the start of the pandemic has companies snapping up facilities as fast as they can be built.Yet Reno and the surrounding area have also seen the cost of things like housing, gas and groceries rise, making daily existence in this growing metropolis increasingly difficult for many of the people who live here, like Ms. Pixton.Christina Pixton, a UPS worker, and her husband make six figures combined, but struggle with the daily costs of living. While gas prices have fallen to an average of $3.91 a gallon across the United States and $5.34 in Nevada, the average in Reno is $5.75, according to data from AAA. It costs Ms. Pixton $70 to $80 a week to fill up her Toyota Highlander, she said.In the past five years, home prices in the area have risen 70 percent, according to Zillow. That’s good news for homeowners like Ms. Pixton. The typical home in Reno is worth $568,103, up 10.2 percent over the past year. But average rent for a one-bedroom apartment in Reno has increased 10 percent compared with last year and 40 percent from three years ago, according to data from Zumper, which tracks housing data.And while homes and planned communities are being developed where farmland once was, affordable housing has become a much-discussed issue among residents and policymakers. Reno’s City Council approved additional affordable housing projects in March. In neighboring Sparks, Mayor Ed Lawson has pushed for denser development — building up and not just out — and more development on federal lands.Housing developments are popping up all over Reno and the surrounding area.Other changes are affecting the way of life in Reno. By the time Ms. Pixton, 37, wants to go shopping after her shift ends around 11 p.m., stores that were once open are now closed after scaling back their hours during the pandemic. When she does make it to Walmart or Target, she often finds scant offerings on the shelves because of continuing supply chain issues and the fact that the Walmart, one of the few locations for miles, draws people from neighboring cities.In a city whose economy is partly driven by getting goods to people across the country expeditiously, Ms. Pixton is left scrambling to find Uncrustables frozen sandwiches for her two sons and the right brand of dog food for the family’s Labrador retriever.“This isn’t a sustainable pattern,” said Ms. Pixton, whose husband works as a foreman at an HVAC company. “We make six figures, and we’re still stuck in this struggling pattern.”In May 2021, Ms. Pixton received a raise to $19 an hour, up from $16. It was a market-rate adjustment that UPS put in place across the country to stay competitive when hiring and retaining workers.But in January, it went back down to $16. As a union steward, Ms. Pixton found herself telling other workers the bad news. Fifteen people quit that week, she said.“It’s been quite hellish,” Ms. Pixton said. “It was not a completely livable salary, but it was something where we could struggle and not have to get a second job.”A spokesman for UPS said that, starting on Oct. 2, another market-rate adjustment brought hourly pay for part-time workers back to $19 an hour.The area offers plenty of affordable land for warehouses, along with access to an interstate and an international airport.In recent years, e-commerce companies have flooded the market. The Reno-Sparks area, with a population of about half a million, ticks a lot of boxes for companies seeking to expand back-end operations. There’s no state income tax, cheap land is available, there’s access to a main interstate and an international airport, and it’s close to California, whose huge economy and millions of people are significant draws for consumer companies looking to easily connect with their customers.In 2014, when Elon Musk came to Nevada to celebrate the opening of Tesla’s giant Gigafactory warehouse, meant to build batteries for his company’s electric vehicles, he encouraged other executives to follow.“What the people of Nevada have created is a state where you can be very agile, where you can do things quickly and get things done,” Mr. Musk said at the time, standing among the state’s legislators.And follow they did. Chewy, Amazon, Thrive Market and Apple have opened or expanded warehouses in the area over the past decade. Third-party logistics companies like OnTrac and Stord have also propped up new facilities in town.Reno’s highways and back roads are dotted with “Now Hiring” billboards.Reno has just a 0.5 percent vacancy rate for warehouses, according to data from the real estate service firm CBRE. About 8.8 million square feet is under construction in the Reno-Sparks area, according to CBRE, and about 80 percent of it is already leased.“We were a good market on a great trajectory averaging four million square feet, probably going to five,” said Eric Bennett, senior vice president of CBRE, which helps lease space to companies. “The pandemic obviously increased the absorption.”Some of these companies have set up their own distribution channels to get their products where they need to go. Others use UPS. All of them need hundreds of people to complete the strenuous work of moving their goods through the facilities and getting them to consumers.“Now Hiring” billboards dot Reno’s interstate and back roads. A chocolate factory was willing to pay as much as $25 an hour. A sign outside a Petco warehouse says a starting salary could be as high as $22 an hour. Hidden Valley Ranch’s plant says its starting hourly wage is $21, with other benefits including a 401(k), paid time off, and health care with dental and vision. Many retailers like Walmart are also trying to attract seasonal workers.Those opportunities are siphoning off potential UPS workers and creating more manual labor for those who remain, said Ross Kinson, a business agent for the local Teamsters.Ross Kinson, a business agent for the local Teamsters, said the increased competition for workers had left some UPS shifts short staffed.Workers like Ms. Pixton.Like many in Reno, she is a California transplant. She moved from Chico with her now-husband, John, in 2008, when Reno was reeling from the housing crisis. Casinos filed for bankruptcy. New construction ground to a halt. She worked in the medical and fast food industries before turning to warehouses.She started at UPS in 2018, attracted by the health care benefits and pension package, and initially made about $13 an hour. She works part time, usually 28 to 32 hours per week. Even though other companies have offered higher wages, she has stayed at UPS because the health benefits cover her children and her pension will vest in about a year.Ms. Pixton has stayed with UPS because of the health care benefits that cover her sons.When the pandemic hit, she felt the impact of millions of stuck-at-home shoppers buying all kinds of merchandise. Before Covid, about 70,000 packages would flow through her hub on a normal summer evening. During the pandemic summer of 2020, that number rose as high as 240,000, though it’s now around 115,000 to 140,000 packages a night.“We’re handling the most amount of packages of any shift because we are getting all of the inbound local businesses. We’re getting the transfers from Sacramento and Oakland and Salt Lake City,” she said. “We’ll get all inbound stuff from other states and have our outbound stuff as well.”Six people are considered a skeleton crew in her department, but Ms. Pixton said that often only three or four were working.As the holiday season approaches, UPS says it plans to hire about 100,000 workers, and is speeding up the process by eliminating interviews and allowing candidates to apply online. At the hub where Ms. Pixton works, UPS is looking to add 400 workers.UPS plans to add seasonal workers for the holidays and has been advertising on online job boards.The current contract that UPS has with the Teamsters went into place in 2018 and expires in 2023. Mr. Kinson said the union would push to formalize language regarding the market-rate wage adjustment for part-time workers for the next contract.“We’d negotiate on good faith,” a UPS spokesman, Glenn Zaccara, said. “The wages they are receiving is industry-leading.”Reno is known for its casinos, but warehouses have long been an economic engine as well.But in a city like Reno that has seen rapid growth, workers argue that the terms of the contract haven’t kept up with reality.“In this area it’s got to be $19 an hour,” Mr. Kinson said. “It has to be or it won’t work.”Loni Goddard works at Kerala Ayurveda, a wellness company, and rents an apartment in Reno. In 2020, her one-bedroom apartment cost $950 with internet and cable. When she re-signed her lease in April, the rent rose to $1,490 — not including internet and cable.“During the pandemic, everyone was getting temporary raises in Reno,” Ms. Goddard said. “At the beginning of 2022, most or all of the raises disappeared and so did the people.”At her UPS job, Ms. Pixton is bracing for the holiday rush. But, she noted, every day has essentially become peak season, considering how much work there is and how few people there are to do it. And while she wishes that more people would join UPS to alleviate some of her workload, she understands why some look elsewhere for employment.“If you’re making less than what you’re paying in gas,” she said, “what’s the point of going?” More

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    Retailers Stumble Adjusting to More Selective Shoppers

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    In earnings reports this week, companies showed it has been a struggle to adapt to a consumer mind-set that is vastly different from what it was during much of the pandemic.This hasn’t been the year retailers planned for.After two years of navigating the pandemic — which brought record online sales and shoppers willing to buy all manners of items, to the point that the global supply chain became strained — executives knew a new normal would take shape.Sales might slow, the thinking went, but people would still want TVs, fashionable dresses and throw pillows. So, with supply chain issues in mind, companies stocked up. But this spring it became clear that those items weren’t selling quickly enough. As people watched the prices of food and gas rise, their spending became more selective, leaving retailers with shelves of inventory they couldn’t get rid of.The magnitude of the miscalculation was crystallized this week in a batch of quarterly earnings from major retailers like Walmart and Target, which showed a mix of declining sales of discretionary goods and lower profits. A number revised their guidance, lowering expectations for both sales and profits for the rest of the year. A glut of inventory weighed on companies’ balance sheets: Inventory at Walmart rose 25 percent from this time last year. At Target, it increased 36 percent. And Kohl’s said inventory was up 48 percent. “Since our last earnings call in May, a weakening environment, high inflation and dampened consumer spending are having broad implications across much of retail, especially in discretionary categories like apparel,” Michelle Gass, the chief executive of Kohl’s, said on a call with analysts. “Given our penetration in these categories, this is disproportionately impacting Kohl’s.”Taken together, the results show that the robust sales retailers grew accustomed to during the course of the pandemic have ceased — and the consumer landscape that awaits may be more austere than what they prepared for. (There were exceptions. Home Depot, for instance, said sales were still strong, driven by home improvement projects.) On earnings calls, executives said lower- to middle-income consumers were the most hesitant to spend. Stores are responding by pushing more discounts and highlighting private-label brand to shoppers, and, in some cases, canceling billions of dollars’ worth of orders with vendors. It remains to be seen which strategies will be most effective.Inflation F.A.Q.Card 1 of 5Inflation F.A.Q.What is inflation? More

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    As Inventory Piles Up, Liquidation Warehouses Are Busy

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    PITTSTON, Pa. — Once upon a time, when parents were scrambling to occupy their children during pandemic lockdowns, bicycles were hard to find. But today, in a giant warehouse in northeastern Pennsylvania, there are shiny new Huffys and Schwinns available at big discounts.The same goes for patio furniture, garden hoses and portable pizza ovens. There are home spas, Rachael Ray’s nonstick pans and a backyard firepit, which promises to make “memories every day.”The warehouse is run by Liquidity Services, a company that collects surplus and returned goods from major retailers like Target and Amazon and resells them, often for cents on the dollar. The facility opened last November and is operating at exceptionally high volumes for this time of year.The warehouse offers a window into a reckoning across the retail industry and the broader economy: After a two-year binge of consumer spending — fueled by government checks and the ease of e-commerce — a nasty hangover is taking hold.The warehouse is nearly the size of two football fields.With consumers cutting down on discretionary purchases because of high inflation, retailers are now stuck with more inventory than they need. While overall spending rebounded last month, some major retailers say shoppers are buying less clothing, gardening equipment and electronics and focusing instead on basics like food and gas.Adding to that glut are all the things people bought during the pandemic — often online — and then returned. In 2021, shoppers returned an average of 16.6 percent of their purchases, up from 10.6 percent in 2020 and more than double the rate in 2019, according to an analysis by the National Retail Federation, a trade group, and Appriss Retail, a software and analytics firm.Last year’s returns, which retailers are not always able to resell themselves, totaled $761 billion in lost sales. That, the retail federation noted, is more than the annual budget for the U.S. Department of Defense.It’s becoming clear that retailers badly misjudged supply and demand. Part of their miscalculation was caused by supply chain delays, which prompted companies to secure products far in advance. Then, there is the natural cycle of booms — whether because of optimism or greed, companies rarely pull back before it’s too late.“It is surprising to me on some level that we saw all that surge of buying activity and we weren’t collectively able to see that it was going to end at some point,” J.D. Daunt, chief commercial officer at Liquidity Services, said in an interview at the Pennsylvania warehouse earlier this month.“You would think that there would be enough data and enough history to see that a little more clearly,” he added. “But it also suggests that times are changing and they are changing fast and more dramatically.”Strong consumer spending may have saved the economy from ruin during the pandemic, but it has also led to enormous excess and waste.Retailers have begun to slash prices on inventory in their stores and online. Last Monday, Walmart issued the industry’s latest warning when it said that its operating profits would drop sharply this year as it cut prices on an oversupply of general merchandise.The warehouse opened in November and is operating at exceptionally high volumes.Adding to the glut are the things people bought during the pandemic and then returned.Many companies cannot afford to let discounted items ‌linger on their shelves because they have to make room for new seasonal goods and the necessities that consumers now prefer. While some retailers are discounting the surplus within their stores, many would rather avoid holding big sales themselves for fear of hurting their brands by conditioning buyers to expect big price cuts as the norm. So retailers look to liquidators to do that dirty work.Additionally, industry executives say the glut is so large that some retailers could run out of space to house it all.“It’s unprecedented,” said Chuck Johnston, a former Walmart executive, who is now chief strategy officer at goTRG, a firm which helps retailers manage returns. “I have never seen the pressure in terms of excess inventory as I am seeing right now.”So, much of the industry’s flotsam and jetsam washes up in warehouses like this one, located off Interstate 81, a few exits from the President Biden Expressway in Scranton, the president’s hometown.The giant facility is part of an industrial park that was built above a reclaimed strip mine dating back to when this region was a major coal producer. Today, the local economy is home to dozens of e-commerce warehouses that cover the hilly landscape like giant spaceships, funneling goods to the population centers in and around New York and Philadelphia.Liquidity Services, a publicly traded company founded in 1999, decided to open its new facility as close as it could to the Scranton area’s major e-commerce warehouses, making it easy for retailers to dispense with their unwanted and returned items.Even before the inventory glut appeared this spring, returns had been a major problem for retailers. The huge surge in e-commerce sales during the pandemic — increasing more than 40 percent in 2020 from the previous year — has only added to it.The National Retail Federation and Appriss Retail calculate that more than 10 percent of returns last year involved fraud, including people wearing clothing and then sending it back or stealing goods from stores and returning them with fake receipts. But more fundamentally, industry analysts say the increasing returns reflect consumer expectations that everything can be taken back.“It’s getting worse and worse,” Mr. Johnston said.Some of the returns and excess inventory will be donated to charities or returned to the manufacturers. Others get recycled, buried in landfills or burned in incinerators that generate electricity.Early in the pandemic, children’s bicycles could be hard to find. Now, they’re available at big discounts.Liquidators say they offer a more environmentally responsible option by finding new buyers and markets for unwanted products, both those that were returned and those that were never bought in the first place. “We are reducing the carbon footprint,” said Tony Sciarrotta, executive director of the Reverse Logistics Association, the industry trade group. “But there is still too much going to landfills.”Retailers will probably receive only a fraction of the items’ original value from the liquidators but it makes more sense to take the losses and move the goods off the store shelves quickly.Still, liquidation can be a sensitive topic for the big companies that want customers to focus on their “A-goods,” not the failures.Mr. Sciarrotta calls it “the dark side” of retail.On a tour through the Pennsylvania warehouse, Mr. Daunt and the warehouse manager, Trevor Morgan, said they were not allowed to discuss where the products originated. But it was not difficult to figure out.An 85-inch flat-screen TV had an Amazon Prime sticker still on the box. Bathroom vanities came from Home Depot. There was a “home theater” memory foam futon with a built-in cup holder from a Walmart return center.Many unopened boxes on the warehouse floor carried the familiar bull’s-eye logo of Target. Air fryers, baby strollers and towering stacks of Barbie’s “Dream House,” which features a swimming pool, elevator and a home office. (Even Barbie, it seems, has grown tired of working from home.)When Target’s sales exploded during the first year of the pandemic, the company was a darling of Wall Street. But in May, the retailer said it was stuck with an oversupply of certain goods and the company’s stock price plummeted nearly 25 percent in one day. Other retailers’ share prices have also fallen.Walter Crowley regularly buys goods from the warehouse, focusing mostly on discounted home improvement goods, which he resells to local contractors.Target’s stumbles have been an opportunity for people like Walter Crowley.Mr. Crowley regularly rents a U-Haul and drives back and forth to the liquidation warehouse from his home near Binghamton, N.Y.Mr. Crowley, who turns 54 next month, focuses mostly on discounted home improvement goods, which he resells to local contractors, like the multiple pallets of discontinued garage door openers, originally priced at $14,000 that he got for $600.But on a sweltering day earlier this month, he stood outside the warehouse in his U-Haul loading up on items from Target.“I saw its stock got tanked,” said Mr. Crowley, a cigarette dangling from his mouth and sweat pouring down his face. “It’s an ugly situation for them.”He bought several cribs, a set of sheets for his own house and a pink castle for a girl in his neighborhood who just turned 5.“I end up giving a lot of it away to my neighbors, to be honest,” he said. “Some people are barely getting by.”The buyers bid for the goods through online auctions and then drive to the warehouse to pick up their winnings.It’s a diverse group. There was a science teacher who stocked up on plastic parts for his class, as well as a woman who planned to resell her purchases — neon green Igloo coolers, a table saw, baby pajamas — in the Haitian and Jamaican communities of New York. She ships other items to Trinidad.The Pennsylvania warehouse, one of eight that Liquidity Service operates around the country, employs about 20 workers, some of whom have been hired on a temporary basis. The starting pay is $17.50 an hour.Charles Benincasa, a temporary worker at the warehouse, said he’s watched the boxes pile up and worries about the implications for the economy.Charles Benincasa, 39, is a temporary worker who has had numerous “warehousing” jobs, the most recent at the Chewy pet food distribution center in nearby Wilkes-Barre.Mr. Benincasa said his friends and family had gotten in the habit of returning many of the goods they buy online. But as he’s watched the boxes pile up in the Liquidity Services warehouse, he worries about the implications for the economy.“Companies are losing a lot of money,” he said. “There is no free lunch.” More

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    They Flocked to China for Boom Times. Now They’re Thinking Twice.

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    A.H. Beard, a 123-year-old luxury mattress manufacturer based in Australia, started eyeing China around 2010. At the time, the family-owned company faced looming competition from low-cost, foreign-made mattresses in its home market. China, with its 1.4 billion consumers and a growing middle class with a taste for premium brands, seemed like a good place to expand.The choice paid off.A.H. Beard opened its first store there in 2013. Before the coronavirus pandemic, sales in the country were growing more than 30 percent a year. There are now 50 A.H. Beard stores across China, with plans to open 50 more. But like most foreign companies operating in China nowadays, A.H. Beard has started to think more carefully about its strategy.Beijing’s strict Covid-19 policy has exacted a heavy toll on business. The company’s exports into China are no longer on the rise.This month, Chinese officials announced that the economy grew at its slowest pace since the early days of the pandemic. Unemployment is high, the housing market is in crisis and nervous consumers — living under the constant threat of lockdowns and mass testing — are not spending.Now, the once resilient Chinese economy is looking shaky, and the companies that flocked to the country to partake in boom times are being confronted by a sobering reality: flat growth in what was once seen as a reliable economic opportunity.“I certainly don’t see China returning to the rates of growth that we had seen previously,” said Tony Pearson, chief executive of A.H. Beard.“I certainly don’t see China returning to the rates of growth that we had seen previously,” said Tony Pearson, chief executive of A.H. Beard.Matthew Abbott for The New York TimesA.H. Beard opened a flagship store in Shanghai in 2013.Matthew Abbott for The New York TimesThe cost of mattress materials and components, such as latex and natural fibers, has increased significantly.Matthew Abbott for The New York TimesSo far, most companies are staying the course, but there is a steady whiff of caution that did not exist just a few years ago.Geopolitical tensions and a U.S.-China trade war have unleashed punishing tariffs for some industries. Covid-19 has snarled the flow of goods, lifting the prices of almost everything and delaying shipments by months. China’s pandemic response of quarantines and lockdowns has kept customers at home and out of stores.A.H. Beard opened its flagship store with a local partner in Shanghai almost 10 years ago. And like any high-end brand, it rolled out products with prices that defy belief. China became the best-selling market for its top-of-the-line $75,000 mattress.Since then, the cost of shipping a container has jumped sixfold. The cost of mattress materials and components, such as latex and natural fibers, have increased significantly. Other worrying signs have emerged, including a housing slump. (New homes often mean new mattresses.)Mr. Pearson said he is hoping that the Chinese Communist Party congress later this year will clarify “the trajectory for China” and imbue consumers with more confidence. “The economy still has growth potential,” he said. “But there’s always a degree of risk.”After the 2008 financial crisis when the rest of the world retrenched, China emerged as an outlier and international businesses rushed in.European luxury brands erected gleaming stores in China’s biggest cities, while U.S. food and consumer goods companies jostled for supermarket shelf space. German car manufacturers opened dealerships, and South Korean and Japanese chip firms courted Chinese electronics makers. A booming construction market fueled demand for iron ore from Australia and Brazil.Chinese consumers rewarded those investments by opening their wallets. But the pandemic has rattled the confidence of many shoppers who now see rainy days ahead.Fang Wei, 34, said she has scaled back her spending since she left a job in 2020. In the past, she spent most of her salary on brands like Michael Kors, Coach and Valentino during frequent shopping trips.Even though she is employed again, working in advertising in Beijing, she now allocates a quarter of her salary on food, transportation and other living costs. She hands the rest to her mother, who puts the money in the bank.“Because I’m worried about being laid off, I transfer everything to my mother every month,” Ms. Fang said. “It’s very depressing to go from enjoying life to subsistence.”A more frugal Chinese consumer is a worry for foreign businesses, many of which offer products that are not the low-cost option but a premium alternative. An Jun-Min, chief executive of Ginseng by Pharm, a South Korean producer of ginseng products, said he, too, has noticed Chinese “wallets have gotten thinner.”Mr. An said sales for the company’s main product, a 2 ounce bottle of a ginseng drink that sells for $18, peaked before the pandemic. The company shipped 600,000 bottles into China and Hong Kong in 2019.There are 12,000 Adidas stores in China, up from 9,000 in 2015, but the company said it expects China revenue to “decline significantly” this year.Giulia Marchi for The New York TimesSales plunged in 2020 because it was hard to get products into the country during Covid lockdowns. Business has mostly bounced back, although it is still down 10 to 20 percent from the peak.While Mr. An said he is concerned about the economic slowdown, he remains optimistic that the market for health products in China, and a familiarity with ginseng — an aromatic root said to have health benefits — will continue to benefit sales. To hedge his bets, though, he is also seeking regulatory approval to sell in Europe.That is a far cry from the unbridled optimism of the past.In 2016, when China was its fastest growing and most profitable market, Kasper Rorsted, the chief executive at Adidas, declared that the country was “the star of the company.” Adidas invested aggressively to expand its foothold. It went from 9,000 stores in China in 2015 to its current 12,000, though only 500 are operated by Adidas. Then the music stopped.After initially projecting that sales in China would accelerate this year, Adidas ratcheted down expectations in May as Covid lockdowns continued to spread. The company said it now expects China revenue to “decline significantly” and that a sudden rebound is unlikely.For now, Adidas remains undeterred. Mr. Rorsted said on a call with analysts that the company is not planning to slash costs or pull back from the country. Instead, it will “do whatever we can to double down and accelerate the growth.”Many foreign companies had bet on the rise of a Chinese middle class as a dependable source of that growth. Bain & Company, a consulting firm, said it expects China to be the world’s largest luxury market by 2025, fueled in part by what Federica Levato, a senior partner, said is still “a big wave” of a rising middle class.Kamps Hardwoods, a Michigan-based manufacturer of lumber used in homes and furniture, said China provided an opportunity to expand — at first.Sarah Rice for The New York TimesRob Kukowski, the general manager of Kamps, said China is such a big buyer of U.S. lumber that the pain is felt by the entire industry when it stops spending.Sarah Rice for The New York TimesBy 2016, China accounted for 80 percent of Kamps’s sales.Sarah Rice for The New York TimesBut those kinds of predictions look less enticing for some foreign companies that once relied heavily on the Chinese market.Kamps Hardwoods, a Michigan-based manufacturer of kiln-treated lumber used for homes and furniture, seized on the opportunity to expand in China — at first. At a Chinese trade show in 2015, Rob Kukowski, the company’s general manager, said a Chinese buyer stunned him with a huge offer to buy enough stock to fill 99 shipping containers. The $2 million order of lumber accounted for four months’ worth of business for Kamps.Chinese buyers were so desperate for lumber back then that they would visit the company’s booth and refuse to leave until Mr. Kukowski accepted a million-dollar deal on the spot. By 2016, China accounted for 80 percent of the company’s sales.Kamps soon realized that it was hard to make a profit from the large Chinese orders because many buyers were not interested in quality and only wanted the cheapest possible price. The company started to focus its effort on finding customers in the United States and other overseas markets who were willing to pay more for a better product.It was fortuitous timing. When China raised tariffs on U.S. lumber in 2018 as part of a trade war, Kamps was better positioned to weather the downturn. Today, China accounts for only 10 percent of Kamps’s sales, but it still has a large indirect impact on the company. Mr. Kukowski said China is such a big buyer of U.S. lumber that a downward price war ensues throughout the industry when it stops spending.“With their purchasing power being so strong and so much of our product going into that market,” Mr. Kukowski said. “Our industry is going to run into significant problems if their economy slows.”Jin Yu Young More

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    Gas Prices Force Many to Rethink Driving, and Spending

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    As summer trips beckon, some are traveling less, at least by car. And those candy bars at the convenience store may find fewer takers.KATY, Texas — Most Americans would gladly pay the $4.29 for a gallon of regular gas Buc-ee’s was charging this week on Interstate 10 between Houston and San Antonio, more than 50 cents below the national average.But with prices more than $1.50 a gallon higher than they were a year ago, even Texans are complaining, and changing their buying habits to make do.“It makes me so stressed out just thinking about buying gas,” said Nancy Oncken, a retired kindergarten teacher, as she filled up her station wagon on her way to join five cousins at a water park outside San Antonio for the long weekend. “It’s now always in the back of my mind to be conservative about what I buy.”When Ms. Oncken drives through Buc-ee’s, the well-known Texas-scale convenience store with enough gasoline pumps to fuel an army, she often buys a souvenir bumper sticker, tumbler or key chain adorned with the cartoonish bucktoothed beaver wearing a baseball cap. But this year, she said, she will keep a grip on her wallet.Drivers will get a bit of a break this Fourth of July weekend now that gasoline prices have eased about 15 cents a gallon over the last two weeks. But with the Russian invasion of Ukraine settling into a grinding war of attrition, constraining global energy supplies, gas prices are not likely to decline much more this summer.At $4.86 a gallon on Thursday, the national average price for regular gas was $1.67 above a year ago, according to the AAA motor club. The fuel prices are altering buying patterns, and there are early signs that people may be rethinking their driving.Economists report that travel spending remains strong this year because of pent-up demand after two years of the Covid-19 pandemic. But interviews with drivers at Buc-ee’s in Katy, Texas, suggest that consumer confidence is beginning to erode under the pressure of high prices for fuel, food and housing. Ms. Oncken and several others said the holiday weekend might be the only vacation they would take this summer, a sharp break from the past.A recent report by Mastercard SpendingPulse, which monitors national retail sales, showed that despite a roughly 60 percent increase in gasoline prices from last year, total spending at gas station convenience stores was up only 29 percent, suggesting that many like Ms. Oncken are compensating for gas prices by saving on little, whimsical indulgences.“Opting for a lower fuel grade, driving a bit less or skipping that slushy or candy bar in the store are part of a bigger picture of choices consumers are making every day in the face of higher prices,” said Michelle Meyer, U.S. chief economist at the Mastercard Economics Institute.The shock is particularly acute given that people grew accustomed to low gasoline prices during the pandemic, when oil prices collapsed from the decline in commuting and other economic activity.Understand Inflation and How It Impacts YouInflation 101: What’s driving inflation in the United States? What can slow the rapid price gains? Here’s what to know.Inflation Calculator: How you experience inflation can vary greatly depending on your spending habits. Answer these seven questions to estimate your personal inflation rate.Greedflation: Some experts say that big corporations are supercharging inflation by jacking up prices. We take a closer look at the issue. Changing Behaviors: From driving fewer miles to downgrading vacations, Americans are making changes to their spending because of inflation. Here’s how five households are coping.It will take several months, at least, to sort out all the effects of higher prices on consumer behavior. People are spending more at restaurants than a year ago, and sales of luxury goods remain high, according to Mastercard. But hotel industry executives say many who drive on vacation are choosing destinations closer to home to save on gas.That may be one reason for the modest drop in gasoline prices in recent weeks. Recent Energy Department data suggested that the volume of gasoline sold nationwide had dropped 2 percent or more from a year earlier. And auto dealers in Houston said customer interest in more fuel-efficient cars, as well as electric and hybrid vehicles, was growing, although shortages of parts have limited the supplies of new models.Some transportation and energy experts say the demand for gas has declined partly because more people are flying rather than driving on vacations this year than last, although rising ticket prices and airport delays may reverse that trend as the summer progresses. In some cities, more people are returning to mass transit as concerns over Covid ease.Inflation and a slowing in some areas of the economy may mean some businesses are cutting back on shipping or shortening their supply chains when possible to save fuel.Energy Department data suggested that gasoline sales had dropped 2 percent over the last year.Scott McIntyre for The New York TimesGiovanni Circella, a transportation expert at the University of California, Davis, said that over the years, short periods of high gas prices had not fundamentally changed driving habits since people still needed to commute to work and carry on daily chores like shopping and driving their children to school and activities.“But what will change is if the gas prices stay high for an extended period of time, Americans will start changing the type of cars they drive,” he said.A report released this week by RBC Capital Markets found that over the last 30 years, retail gasoline prices in the United States increased more than 30 percent year over year during 39 individual months. Of those months, demand fell 2 percent or more from the previous year only 12 times. “In short, protracted demand destruction events have historically been rare,” the RBC report concluded.Inflation F.A.Q.Card 1 of 5What is inflation? More

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    Consumer Spending Weaker Than Reported, a Bad Sign for the Economy

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    Consumer spending was weaker in early 2022 than previously believed, a sign that cracks may be forming in a crucial pillar of the U.S. economy.Spending, adjusted for inflation, increased 0.5 percent in the first three months of the year, the Commerce Department said Wednesday. That was a sharp downward revision from the government’s earlier estimate of 0.8 percent growth, and a slowdown from the 0.6 percent growth in the final quarter of 2021. Spending on services rose significantly more slowly than initially reported, while spending on goods actually fell.Gross domestic product, the broadest measure of economic output, shrank 0.4 percent in the first quarter, adjusted for inflation, the equivalent of a 1.6 percent annual rate of contraction. That was only slightly weaker than previously reported, because the government raised its estimate of how much companies added to their inventories, partly offsetting the weaker consumer spending.Even after the revision, consumer spending remained solid in the first quarter. But any deceleration is significant because consumers have been the engine of the economic recovery. Spending had appeared resilient in the face of the fastest inflation in a generation — a picture that looks at least somewhat different in light of the latest revisions.“That prior estimate of first-quarter G.D.P. was much more comfortable than today’s look,” said Michelle Meyer, chief U.S. economist for the Mastercard Economics Institute. “There is reason for more concern after looking at today’s report.”Economists in recent weeks have steadily lowered their forecasts of economic growth for the rest of the year. IHS Markit estimated on Thursday that G.D.P. would grow at a 0.1 percent annual rate in the second quarter; earlier this month, it expected the economy to grow at a 2.4 percent rate this quarter. Some forecasters now say it is possible that economic output will shrink for the second consecutive quarter — a common, though unofficial, definition of a recession.The National Bureau of Economic Research, the nation’s semiofficial arbiter of when business cycles begin and end, defines recessions differently, as “a significant decline in economic activity that is spread across the economy and lasts more than a few months.”Most economists agree that, by that definition, the United States is not yet in a recession. But a growing number of economists believe that a recession is likely in the next year, as the Federal Reserve raises interest rates in a bid to tame inflation. More

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    Why Coupons Are Harder to Find Than Ever

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    Jill Cataldo is a master of coupons.She began cutting them out to save a dollar here and 50 cents there in the Great Recession, when she had two children in diapers and money was tight. Starting with a training session at the library in her Chicago suburb, she shared what she learned with others, and now has a syndicated column and a website where she writes about coupon deals and other ways to spend less.The pandemic, however, upended Ms. Cataldo’s world. Paper coupon inserts in the Sunday newspaper seemed flimsier. Even increasingly popular digital coupons were hard to come by.“There are brands that I’ve followed for over a decade that are just not issuing a lot of coupons right now,” Ms. Cataldo said. “It’s kind of frustrating, because it’s something we came to count on for a long time.”Now the steepest rise in the cost of living in four decades is making bargains even more coveted. “With inflation, this is what should go up tremendously as a tool to help customers,” said Sanjay Dhar, a marketing professor at the University of Chicago’s Booth School of Business.But that tool is getting ever harder to come by. In 2021, Kantar Media estimates, 168 billion circulated, across both print and digital formats. That was down from about 294 billion in 2015.The shrinking coupon market includes not just the number of coupons distributed but also the share turned in at checkout. Redemption rates declined to 0.5 percent of all print and digital coupons in 2020 from about 3.5 percent in the early 1980s, according to a paper by economists at Harvard University, Georgetown University and Heinrich Heine University Düsseldorf.The economists see a larger phenomenon: Increasingly time-strapped consumers don’t want to deal with even small hassles to save a few dollars on toothpaste.“The declining use of coupons and the declining redemption rates indicate a fundamental shift in consumer shopping behavior,” the authors wrote. They added, “We view this as additional evidence that declining price sensitivity reflects a longer-run secular trend.”At the same time, mobile phones have made all kinds of other incentives possible, including cash-back rewards, points that can be redeemed for store credit and contest prizes.“Practitioners often want to get discounts to consumers in a seamless manner,” said Eric Anderson, a professor of marketing at Northwestern University’s Kellogg School of Management. “It’s not clear that traditional coupons do this.”That explanation offers little consolation to people who’ve come to depend on coupons to keep their grocery costs down, like Ms. Cataldo’s readers.“I don’t think from the consumer perspective that they’re like, ‘Oh, we don’t care.’ We do care,” Ms. Cataldo said. “It’s just that we have fewer tools right now to play the game.”A Venerable IncentiveThe couponing industry as we know it started in the early 1970s when a Michigan printing company, Valassis Communications, began distributing booklets of discounts on particular products that could be redeemed at any store.Valassis would total up the slips of paper, and the manufacturer reimbursed the retailer for the discount. Soon, grocers saw the value of coupons in driving traffic to their own stores, and began newspaper inserts of their own. The number of print coupons distributed peaked in 1999 at 340 billion, as newspaper circulation also crested, according to Inmar Intelligence, the other large coupon settlement company, alongside Valassis.But a slide in redemption rates had already begun. It’s difficult to pin down why, but people close to the industry believe it’s related to the rise of the two-income household, as more women entered the work force. Ms. Cataldo remembers growing up in the 1980s, when, she said, her mother used coupons enthusiastically.“Back then it was a little bit of a different culture because we had so many stay-at-home parents who had time to do this,” she said. “It’s time that pays well, but you have to have that time, and if you are working eight hours a day, you probably don’t.”Coupon use enjoyed a resurgence during the recession of 2007-9, which left millions of people out of work much longer and with much less financial assistance than they would receive during the pandemic recession a decade later. “Couponing” became a widely used verb courtesy of the reality show “Extreme Couponing,” which brought people into the practice with promises of stackable discounts that could bring the cost of a shopping cart’s worth of purchases close to zero.But what delighted serious couponers dismayed manufacturers, which are focused on getting people to buy things they wouldn’t otherwise, not giving discounts to people who’d buy the product anyway. That’s why brands started pulling back on promotions and limiting the number of coupons that could be used in a given trip.At the same time, grocers and big-box stores were coming under pressure from e-commerce platforms like Amazon. They responded by beefing up their store brand offerings as well as asking companies like Procter & Gamble to lower prices on name-brand items.“They want to get the best deals so they are competitive at the shelf,” said Aimee Englert, who directs client strategy for consumer packaged goods companies at Valassis, now part of a company called Vericast. “What that ends up doing is constricting the budgets that manufacturers have to pull levers, like to provide a coupon.”As their wiggle room on discounts shrank, brands wanted to make sure they were squeezing as many extra purchases as possible out of their promotion dollars. The average value of coupons shrank, as did the time over which they could be used. And the rise of smartphones provided an opportunity that seemed far superior to blanketing neighborhoods with newsprint: Offers could be personalized and aimed at specific demographic profiles. Coupons could be linked to a supermarket loyalty card, which gave retailers data on whether the coupons prompted a shopper to switch brands.Greg Parks is another coupon blogger who got started in the wake of the Great Recession, looking to stretch his income to feed three children. Although he began with newspaper clippings all over his floor, he now does instructional videos exclusively using digital coupons, which can be used nationwide rather than in a single distribution area.Greg Parks is on the high end of coupon user sophistication.Luke Sharrett for The New York TimesMr. Parks at a CVS store where he often films videos on couponing.Luke Sharrett for The New York Times“I like to say that I’m a lazy couponer now,” Mr. Parks said. Plus, he has noticed that digital coupons cut down on dirty looks from cashiers when they have to process a stack of paper.“Some of them act like we’re stealing, or taking something from them,” Mr. Parks said. “They don’t want to deal with all those paper coupons, they’re such a headache. With digital, everything just automatically comes off.” (While only 5 percent of coupons distributed are digital, they represent about a third of all coupons redeemed, according to Inmar.)Mr. Parks, however, is on the high end of coupon user sophistication. Many people who depended most on print coupons — older shoppers on fixed incomes — may not have the computer or smartphone literacy to adopt the digital version. Dr. Dhar, the University of Chicago professor, said the switch to digital hit the wrong demographic.“That’s not the coupon-using population — they don’t use digital media very much,” said Dr. Dhar, who remembers surviving on coupons 30 years ago as a graduate student in Los Angeles. “A lot of this isn’t driven by the response to coupons. It’s driven by coupons not reaching the right people.”To be sure, manufacturers have not abandoned the pure reach of physical coupons. The free-standing insert still works as an advertising vehicle: In fact, the ideal outcome for a manufacturer is that a shopper sees a coupon and then goes to the store to buy the item without redeeming it.A Sudden Shake-UpIf coupons had been slowly dying for years, the pandemic delivered a sharp blow.Seemingly overnight, roiling supply chains and the lurch from office to home left consumers desperate to buy anything they could get their hands on; brand preferences went out the window. When inflation started to spike last year, not only did retailers have trouble keeping shelves stocked, they weren’t even sure they could maintain stable prices until the coupons expired.“The last thing those manufacturers want to do is put more incentives on those because it’s going to spike demand up even more,” said Spencer Baird, Inmar’s interim chief executive. “This is what we very consistently hear: ‘We’ve got a budget, we’re ready to go, but until we get my fill rate where it needs to be, I don’t want to mess up my supply chain.’”Use of even digital coupons sank in 2020, for the first time, before rebounding. While most of those are tethered to a specific retailer, the coupon industry is working on a universal standard that will allow shoppers to redeem digital coupons at any retailer that signs up.But there’s no guarantee that retailers will stick with coupons, when other incentives are gaining in popularity.Lisa Thompson works for Quotient, a company formerly known as Coupons.com, which started in 1998 as a website where you could print coupons rather than clipping them. The company is phasing out printable coupons, and the Coupons.com app already mostly offers cash-back promotions instead.“Honestly, it’s a dying form of savings, and we know that,” Ms. Thompson said. “A lot of my work has been working with the marketing team to make ‘coupon’ sound sexy.”Plenty of dedicated couponers still prefer the old-fashioned way.“I agree, it’s going down, and at some point it will die,” Ms. Cataldo said. “I’m not looking forward to that. But it’s not happening nearly as quickly as they thought it would.” More