| | TOGETHER WITH |  | | | Good morning.
In an effort to take pressure off consumers dealing with budget breaking fuel prices, convenience store and gas station chain Sheetz — which operates in Pennsylvania, West Virginia, Maryland, Ohio, Virginia, and North Carolina — is offering unleaded 88 gasoline for $3.99 a gallon until July 5. CEO Travis Sheetz said Wednesday that the discount will apply to "light duty" vehicles made in 2001 or later — bad news for everyone still driving the turn-of-the-millenium Camry their mom gave them in college. |
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| • | | OPEC production goals are proving too lofty. | | | • | | Bed Bath & Beyond forced out its CEO after disastrous sales results. | | | • | | Good old-fashioned coupons are disappearing. | | | Please do not delete this text. |
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OPEC is Whiffing on Oil Production Targets |
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Tired of sky-high prices at the pump? Don't hold your breath waiting for a reprieve. On Wednesday, members of OPEC+, which includes 13 core OPEC and 10 non-core nations and collectively accounts for half the world's oil production, admitted to wildly missing oil-production targets so far this year. Worse yet: the group says considerable roadblocks remain. |
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Settling for a "Psychological Impact" |
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Stepping back in time: in May 2020, OPEC+ joined forces to coordinate production decreases aimed at re-balancing the suddenly overstocked global oil market (remember negative oil?). Since then, the group has collectively pumped 562 million barrels less than it was supposed to, according to data from OPEC's Joint Technical Committee, setting the stage for today's dearth. In light of US consumers paying $5+ per gallon at the pump (in Europe, it's even worse), OPEC+ agreed in principle to raise production to 42 million barrels per day last month. But a new, independent assessment found that OPEC+ has fallen short by a whopping 3 million barrels per day, prompting wide concern as to how long the supply-demand imbalance will persist: |
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• | | New targets, discussed in a virtual meeting Wednesday and set to be formally approved today, will rely heavily on so-called spare capacity in Saudi Arabia and the United Arab Emirates. Saudi Arabia, in particular, will have to produce 11 million barrels per day in August — a level it's only reached twice in its history. | |
• | | Speaking with President Biden at the G-7 meeting on Monday, France's Emmanuel Macron said the UAE's Sheikh Mohammed bin Zayed al Nahyan privately claimed his country was already at maximum capacity, while the Saudis can only increase "a little bit." | | |
Throwing more cold water on its ability to re-balance the market, one OPEC member told The Wall Street Journal that any planned increase is "meaningless" and "only made for its psychological impacts on the market," in light of Russian sanctions currently crimping supply. G-7 Solutions: World leaders at the G-7 meeting this week discussed a potential solution of imposing a price cap on Russian oil, which, in theory, would force other producers to lower their prices. Analysts at Swedish bank SEB claim that move would likely backfire, causing Russia to retreat from the market altogether, and cause prices to surge to $200 per barrel. Time to dust off your Schwinn 7-speed. |
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Bed Bath & Beyond Ousts CEO After "Dumpster Fire" Results |
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(A closed Bed Bath & Beyond location; Photo by Kevin Dooley) The aisles at Bed Bath & Beyond may be stocked with pillows, but in the boardroom there are no soft landings. On Wednesday, the embattled home goods retailer turfed CEO Mark Tritton and replaced him with board member Sue Gove on an interim basis. The company's latest results were so bad, one analyst called it "the end days." |
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The Emperor's New Private Label |
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Tritton was fired the same day Bed Bath & Beyond (BBB) released its first quarter financials, showing sales fell a shocking 25% to $1.46 billion. And a quarterly net loss of $358 million marked a seven-fold increase from one year ago. "We are in the end days," Anthony Chukumba, a managing director at Loop Capital, told Yahoo Finance. "These results were a dumpster fire, there's no other way to put it." Tritton, who took over in 2019, did away with popular national brands and replaced them with new, private label offerings. But the longer lead times and additional work involved with private-label brands — including developing designs and contracting factories — left BBB more exposed to supply chain woes than its rivals. In the most recent holiday season, BBB was short of its 200 best-selling items, resulting in $100 million in lost sales. Even the company's anointed savior might not be up to the challenge: |
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• | | Activist investor Ryan Cohen, the billionaire behind pet retailer Chewy and the chairman of GameStop, took a 9.8% stake in BBB and negotiated three new board seats earlier this year. Cohen came in with ambitious plans, including a sale of the lucrative Buybuy Baby chain, which the company is still exploring. | | • | | "Everything that Ryan Cohen has said to this point has been nonsensical," Chukumba added. "He said the company could easily be taken private, that's not the case. He said Buybuy Baby was worth many multiples of the entire market cap. That's not the case. There was no strategy, the emperor has no clothes." | | | Gove acknowledged BBB will need to reverse course on Tritton's private label push, telling analysts "we're focused on improving the category mix."
Sweat It Out: Earlier this week, Bank of America analysts alleged BBB is in such dire straits that stores have been turning the air conditioning down to save money. The company told media outlets that it hasn't directed stores to adjust their thermostat, nor has it changed its corporate utilities usage policy, but didn't explicitly deny that knobs have been turned. It does give new meaning to sweating it out over your next big purchase. |
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Crypto & Stocks – Where's the Bottom? |
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Coupons are Vanishing and With Them a Bargain Hunter Artform |
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The steepest cost of living increase in a generation sure seems like it should be high time for coupon-clipping bargain hunters. But the latest numbers show that people who scour through mail flyers and newspapers for a sweet 25-cent relief on a can of tomatoes or a two-for-one yogurt special are practitioners of a dying art. |
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Beginning in the 1970s, coupons were a commercial phenomenon — a genius marketing strategy to induce consumer buying with the incentive of saving. Did you really need ten boxes of Pop Tarts? No, but you did have the coupons for them. By 1999, the number of discount coupons issued in the US peaked at 340 billion, according to Inmar Intelligence. Inflation and the pandemic completely changed the equation. Retailers had been struggling to keep their shelves full, so they had little incentive to pass along discounts. Mobile devices have also led to other incentives like cash-back rewards, store credit points, and contest prizes. The result is a lot less paper discounting: |
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• | | Last year, 168 billion coupons, both digital and print, were circulated, down from 294 billion in 2015. | | • | | Despite challenging economic conditions, even usage has taken a hit: the coupon redemption rate was just 0.5% in 2020, down from 3.5% in the 1980s, according to research by Harvard and Georgetown economists. | | | Make it Sound What?: Take it from Lisa Thompson, a Senior Communications Manager at Quotient, the company formerly known as Coupons.com. "Honestly, it's a dying form of savings, and we know that," she told the NYT. "A lot of my work has been working with the marketing team to make 'coupon' sound sexy." |
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Please do not delete this text. | Extra Upside | • | | Ben & Jerry's Israel business has been sold, bringing the ice cream back to The Holy Land. | | | • | | Is this the best cash back card we've come across? The Ascent sure thinks so, and we tend not to argue with them on matters of finance (after all, they've been doing this kind of research for 15 years). Cardholders could earn a $200 sign-up bonus, so apply for the card right now. | | | Please do not delete this text. |
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Written by Sean Craig and Brian Boyle. |
Disclaimer | | This information is a paid endorsement by a non-customer for promotional purposes. Domain Money portfolios are managed by Domain Money Advisors, LLC, an investment advisor registered with the U.S. Securities and Exchange Commission. Investing comes with inherent risks and you should always invest within your means and risk tolerance. Past performance is not an indication of future returns For important disclosures, please see https://domainmoney.com/legal |
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