If there were a Guinness record for most customers lost in a single day, Binance would probably own it. On Monday, the Securities and Exchange Commission in the West African nation of Nigeria announced that the crypto exchange is neither registered nor regulated by the commission, and its activities in this country of 213 million people are therefore illegal.
Somebody better tell the deposed prince of Nigeria, because just this morning he emailed us a request for $70,000 in bitcoin.
Morning Brief
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Amazon’s need for speed gets speedier.
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Is retail OK? Ask the brewers.
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Nuclear power is back.
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E-Commerce
Amazon Wants to Double Its Same-Day Delivery Facilities
(Photo by Super Straho via Unsplash)
Maybe Amazon will one day figure out how to get your stuff to you before you even order it, but until then you’ll have to settle for same-day delivery.
Less than a year after Amazon said it had too much warehouse space on its hands, the company says it wants to cultivate new real estate by doubling the number of same-day delivery centers it owns over the next two years. Amazon hopes the move can help it cling to its reputation for ludicrously fast delivery as customer interest in its Prime subscription seems less ardent than in previous years.
Speed Round
As demand for delivery spiked with the covid pandemic in 2020, Amazon went on a big real-estate spending spree so warehouse capacity could keep up. By 2022 however, the lockdown-fueled delivery boom had slowed down, and Amazon CFO Brian Olsavsky told analysts that the overstaffing and mismatched space versus demand had resulted in “$2 billion in costs compared to last year.” The company closed warehouses and shuttered plans for new builds, but now it looks like it’s getting back into real estate, just with a more decentralized approach as Amazon’s vice president of transportation Udit Madan told CNBC the company has been making efforts to move away from a “hub and spoke” logistics network.
Amazon has clearly figured out that, as Tom Petty sang, waiting is the hardest part. Way back in the mists of 2005, its Prime service offered super-speedy two-day delivery, then it made next-day delivery the holy grail. Now, it’s all about same-day delivery:
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Amazon’s same-day sites are much smaller than its traditional warehouses near large metropolitan areas and store the 100,000 most-popular items on Amazon, perThe Wall Street Journal. According to a statement from Doug Herrington, the company’s head of Worldwide Amazon Stores, once a same-day site gets a customer order the requested product is out the door 11 minutes later, on average.
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Much as Amazon famously loves speed, Globaldata analyst Neil Saunders told Bloomberg that investors might be dubious about the upfront costs associated with building the new facilities. “Amazon has got some work to do in convincing people this will be beneficial to the bottom line because investors will be a little bit spooked by it,” Saunders said.
The Other Side of the Coin: Amazon’s feverish tempo is being put to the test in its home state of Washington. The state’s Department of Labor and Industries has issued Amazon four fines since 2021, all of which the company is appealing and which are being held under the legal microscope in a trial that will stretch over the next few weeks. Of course, if Amazon had been allowed to organize it, there’d be a verdict by 10 p.m. today.
– Isobel Asher Hamilton
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Retail
Heineken’s Sales Slow as Retail Customers Push Back on Prices
It’s not called beer money for nothing.
Dutch mega-brewer Heineken began increasing its prices by more than 12% last year to offset higher production, ingredient, and energy costs. The hope was that drinkers would remain loyal, but inflation has finally become too much for consumers, especially in important Asian-Pacific markets. And it’s not just a Heineken — or even a beer industry — problem. The entire retail sector is facing a wave of customers turning away from their favorite, but now higher-priced, brands.
Spend More, Buy Less
Heineken’s first-half beer sales volumes fell by 5.4% from the same period last year, with declines in all regions. A significant economic slowdown in Vietnam — one of the brewery’s largest markets — hit particularly hard, with sales falling roughly 13% and operating profit dropping by about one-third.
As a result, Heineken cut its annual profit forecast, expecting growth to be between zero and a mid-single-digit percentage. But Heineken was simply following the recent price-raising playbook:
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Anheuser-Busch InBev, Carlsberg, and Molson Coors have all increased prices since last fall, and while that initially worked, they could also report sales drop-offs in their upcoming Q2 results this month.
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Increased prices among brewers and a reinvigorated cocktail culture caused spirit makers to wrestle market share away from beer companies in the US for the first time ever last year: Spirits made up 42.1% of alcohol sales, while beer accounted for 41.9%. And that momentum is still going. Market researcher Catalina said sales of pre-mixed cocktails grew 29% between May 2022 and May 2023, while domestic beer sales dropped 3%.
Sorry, I’m on a Budget: Multiple retail sectors saw their customers initially go along with higher prices, but with high global inflation sticky, consumers are starting to cut back.
Quarterly profits were up for Unilever, Kimberly Clark, and Pepsi, but sales volumes are down. Barron’s reported that “shoppers are turning toward cheaper alternatives, such as private label brands, while others are opting to stop spending on more discretionary goods altogether as they become more cautious about spending.” Heineken already said it expected its price increases to moderate in the second half of the year; other companies will likely follow that playbook, too.
– Griffin Kelly
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SPONSORED BY HEAR.COM
Hearing So Clear It Has No Peers
Have you heard the good news?
A team of top German engineers has just unveiled the world’s very first hearing aids with dual processing, and the results are clear… Literally.
Why is this so special? Thanks to this cutting-edge German technology, these tiny devices capture speech and noise separately, resulting in groundbreaking levels of noise reduction and speech clarity.
hear.com is so confident you’ll love their product, all devices come with a 45-day no-risk trial. They’ve already got 385,000 happy customers — and counting — and their award-winning customer service will help with anything you need.
The last time America built a nuclear reactor from scratch My Sharona topped the charts and Jimmy Carter was in the White House.
On Monday, Plant Vogtle Unit 3, a nuclear power plant in Waynesboro, Georgia, started delivering energy to utilities in the Southeast US. The project was more than 10 years in the making.
Countdown to One
Plant Vogtle had a turbulent construction story, to say the least. When construction began in 2009, the project was intended to be completed by 2016. That didn’t happen — you can chalk it up to bad timing.
The project was born out of nuclear optimism in 2008 — as interest surged in the carbon-free energy source. Plant Vogtle Unit 3 was one of a dozen new plants planned to be built in the US. But then came the nuclear disaster at the Fukushima plant in Japan in 2011, derailing America’s own nuclear future:
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Of the dozen planned reactors, only four remained in development, with Plant Vogtle Unit 3 the first to be completed. An additional reactor at Plant Vogtle, Unit 4, is scheduled to go live next year.
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The original $14 billion price tag for both reactors has since soared to over $30 billion.
Completion of Unit 4 may be even more important. “If in the state of Georgia, this project is not completed, there won’t be another nuclear plant built in these United States in decades,” Lauren McDonald, a member of the Georgia Public Service Commission utilities regulator, told the Financial Times.
Power Play: Over half of Georgia’s energy will now be carbon-free, with most of that being nuclear, according to the Nuclear Energy Institute. That compares to roughly 18% of US-wide energy coming from nuclear sources, according to the US Energy Information Administration.
– Brian Boyle
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Extra Upside
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Do you know how old you were smoking? Juul tries to get authorization for age-verifying vape.
