Morning Business Memo
Another big retailer is playing hardball with Amazon. Best Buy (BBY) reportedly plans to match the price of Amazon (AMZN) and other internet retailers during the holiday shopping season, and offer free home delivery when stores are out of stock. Wal-Mart (WMT) has already stopped selling Amazon’s Kindle e-reader and rolled out plans for a same-day delivery service for online shoppers in some big metropolitan markets. The Wall Street Journal says Best Buy is attempting to fight back against “showrooming”: where consumers walk into stores and then shop online for a cheaper price. The Journal says “Best Buy is still working out the details of its internet price matching program, which might exclude some items.” Toys ‘R Us has been taking a different strategy: expanding its large range of exclusive products and adding more pop-up stores for the holidays.
Consumer confidence has gone up in recent weeks, but shoppers appear to be in no mood to splurge. Retailers are cautiously optimistic about the coming holiday shopping season. “Most shoppers feel that the worst is over,” says Ellen Davis of the National Retail Federation “They made it through the recession. Many of them spent several years paying down debt or putting money into savings.” But there are plenty of headwinds this fall. Everything from political attack ads to news about the fiscal cliff to gas prices that still can’t seem to stabilize are giving some consumers reason for caution.”
The number three US wireless provider — Sprint Nextel is considering a future where it is controlled by a Japan-based firm. It says cell phone company Softbank is in talks about making a potential substantial investment in the U.S. company. Sprint says the deal could be big enough to involve a “change of control” of the company. It didn’t provide any other details. The news sent Sprint shares to the highest level in over four years.
One of America’s best-known economists says growth could pick up next year unless Washington runs right over the fiscal cliff. Mark Zandi of Moody’s Analytics says US growth could reach nearly 4 percent in 2013 with a lot more jobs added. Most economists forecast slower growth. Zandi’s brighter outlook for the next two years assumes Congress and the White House tackle “fiscal issues.” That would mean agreement by Democrats and Republicans to avoid the collection of automatic tax hikes and spending cuts at the end of the year.
Richard Davies Business Correspondent ABC NEWS Radio ABCNews.com twitter.com/daviesabc