Retail sales decrease amid storm, caution
WASHINGTON (AP) — Superstorm Sandy combined with cautious consumers to lower retail sales in October and raise concerns about weaker economic growth and a tepid holiday shopping season.
Consumers may also be holding back because of anxiety over big tax increases and spending cuts — known as the “fiscal cliff” — that will take effect in January unless Congress and the White House reach a budget deal by then.
Retail sales dropped 0.3 percent last month after three months of gains, the Commerce Department said Wednesday. Sales at auto dealers fell 1.5 percent, the most in more than a year.
The storm depressed car sales and slowed business in the Northeast at the end of the month, economists said. The government said Sandy forced some stores and restaurants to close and lose business, while others reported higher sales ahead of the storm as people bought supplies.
Online and catalog purchases fell 1.8 percent, the most in a year. Widespread power outages prevented some online shopping.
But sales slowed in eight of the 13 broad categories tracked by the government. Electronics, building supplies and clothing stores all posted lower sales. The broad declines suggest October’s weakness went beyond the storm.
Stocks slide as fight over deficit looms
NEW YORK (AP) — Investors drew little hope Wednesday for a quick compromise in U.S. budget talks after President Barack Obama insisted that higher taxes on wealthy Americans would have to be part of any deal.
Stocks fell sharply, and even a signal from the Federal Reserve that it could launch a program in December to speed job growth failed to encourage investors. The Dow Jones industrial average dropped 185 points.
Obama made clear he would seek higher tax revenue from the wealthiest Americans, which faces opposition among some Republicans in Congress. Obama said that a modest increase on the wealthy “is not going to break their backs.”
Starbucks will buy Teavana for $620M
SEATTLE (AP) — Starbucks wants to make the tea shop as ubiquitous as its namesake cafes.
The Seattle-based company said Wednesday that it will pay $620 million in cash to buy Teavana Holdings Inc., which sells high-end loose leaf teas in 300 shopping mall locations. The plan is to expand Teavana’s footprint beyond the mall with stand-alone shops, adding tea bars with specialty drinks.
In an interview CEO Howard Schultz noted that Starbucks cafes only sold coffee by the pound in 1987, with the offerings of specialty drinks evolving over time. Schultz said the company would use that experience to transform Teavana over time as well. Starbucks Corp. already owns the Tazo tea brand, which it purchased in 1999. And the company announced plans earlier this year to open its first Tazo tea shop.
where customers can buy specialty drinks and blend loose leaf teas with the help of employees — not unlike the shops it’s now envisioning for Teavana.
Schultz said Thursday that the Tazo shop will serve as a “learning laboratory” for its development of Teavana stores. He said that the brands give the company a two-tiered approach to the fast-growing tea category, since Teavana is a premium loose leaf tea while Tazo is a bagged tea product sold in supermarkets