National

Closer

Axios Closer

Target announced Tuesday that it is shuttering nine stores on Oct. 21 because "theft and organized retail crime are threatening the safety of our team and guests."

Why it matters: Retail crime accounted for $112.1 billion in losses in 2022, a National Retail Federation report released Tuesday found.

Organized retail crime — where gangs of thieves swarm stores for products they can resell online — has become increasingly brazen and also led to huge losses for companies.

What's happening: Target said it cannot continue to operate the nine stores in four states because they are "contributing to unsustainable business performance."

"We know that our stores serve an important role in their communities, but we can only be successful if the working and shopping environment is safe for all," the company said in a news release.

The closings include a New York City store in Harlem, two Seattle stores, three stores in the San Francisco/Oakland market and three Portland, Oregon stores.

The big picture: Retailers have become increasingly vocal recently about what they say is a rising tide of crime, including violence and theft:

Dick's Sporting Goods CEO Lauren Hobart said in August in a statement that theft is "an increasingly serious issue impacting many retailers," and that it was a large factor in why the company's second-quarter earnings fell short of expectations.

"It's quite alarming what's going on," Hobart said on an earnings call.

Other retailers including CVS and Walgreens have said theft has damaged their bottom lines.

Meanwhile, Target also recently said it would reduce the visibility of Pride Month items after employees faced violent customers.

Zoom in: The National Retail Federation has said that thieves are often stealing items for the purpose of reselling them after altering their expiration dates and repackaging them.

Yes, but: There is some debate about whether the problem is truly systemic or just a scapegoat for other challenges

"Maybe we cried too much" about theft, then-Walgreens CFO James Kehoe said on an earnings call in January, adding that the problem had "stabilized."

Target's comparable sales fell 5.4% in the second quarter, compared with the same period a year earlier, as the company struggles to keep up with its rivals, including Walmart.

Target said eligible store employees will be offered the chance to transfer to other locations.

The three stores in the San Francisco/Oakland market closing are:

New York City: 517 E 117th Street, Harlem

Seattle University Way: 4535 University Way NE

Seattle Ballard: 1448 NW Market St, Suite 100

Editor's note: This story was updated with the list of closing stores.

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Target closing 9 stores due to "theft and organized retail crime"

Target announced it will shutter nine stores in four states on Oct. 21.

Target is closing nine stores in four states because of organized retail crime. Photo: Scott Olson/Getty Images

Target

Retail

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

After years of holiday pricing hikes, the United States Postal Service said it won't levy any additional surcharges during the peak 2023 holiday season.

The big picture: It's a surprise move for USPS — which has raised stamp prices three times in 12 months — since UPS and FedEx have already announced surcharges for the upcoming peak season.

Postmaster General and CEO Louis DeJoy said in a statement that "with no holiday surcharges" the service is "strongly positioned to be America's most affordable delivery provider this holiday season."

USPS also says there will be no additional fees for residential area delivery, Saturday delivery or minimum volumes.

What's happening: UPS and FedEx holiday surcharges will start in October and both carriers have announced 2024 rate increases.

This is the first year USPS won't have a holiday surcharge since it started charging it in 2020.

By the numbers: USPS said it processed more than 11.7 billion pieces of mail and packages during the 2022 holiday season.

It took 2.5 days on average for mail and packages to be delivered.

Between the lines: Ditching the surcharge can help draw more business to USPS, Matt Huckeba, executive vice president of parcel solutions for Evans Transportation Services, told Axios.

"Avoiding increasing costs over the holiday period is some great 'free marketing' to draw shippers to the USPS product offerings and demonstrate that they are a viable solution for customer needs," Huckeba said.

Yes, but: Kevin Yoder, executive director of the advocacy group Keep US Posted, told Axios that "DeJoy should apply the same strategy to all mail instead of plowing ahead with stamp increases every six months."

"If more affordable package prices over the holidays means pricier stamps all year long, it's not necessarily a win for consumers," said Yoder, a former Republican congressman from Kansas. "We need affordability for both mail and packages all year long."

Kraft recalls American cheese singles for "gagging" risk

Clorox cyberattack leads to product shortages

Apple iOS 17 now available for iPhones: Here's what's new

USPS ditches holiday surcharges despite stamp price hikes

UPS and FedEx have both announced that their holiday surcharges will start in October.

Mail truck with postal worker opening a mailbox

The U.S. Postal Service is not charging holiday surcharges this year. Photo: Paul Ratje/AFP via Getty Images

United States Postal Service (USPS)

Kraft Heinz is voluntarily recalling nearly 84,000 cases of its individually wrapped American cheese singles over a potential choking hazard.

Driving the news: The company said in a statement the recall is a precaution after a temporary issue with one of its wrapping machines made it possible that a "thin strip of the individual film may remain on the slice after the wrapper has been removed."

"If the film sticks to the slice and is not removed, it could be unpleasant and potentially cause a gagging or choking hazard," Kraft Heinz said in its statement.

Details: The recall is for 16-ounce packs of Kraft Singles American Pasteurized Prepared Cheese Product with a "Best When Used By" date between Jan. 10, 2024, and Jan. 27, 2024.

Three-pound packs are also part of the recall with a "Best When Used By" date between Jan. 9, 2024, and Jan. 13, 2024. Packs marked Jan. 16, 2024, are also part of the recall.

Between the lines: The company said the issue was discovered after it received several complaints, including six from consumers who said "they choked or gagged in connection with the issue."

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Kraft Heinz is voluntarily recalling nearly 84,000 cases of its individually wrapped American cheese single slices.

Select packages of Kraft Singles cheese are being recalled. Photo: Courtesy of Kraft Heinz

Product recalls

Pro Rata

Axios Pro Rata

Klaviyo, a Boston-based provider of e-commerce marketing automation SaaS, raised $576 million in its IPO.

Why it matters There are a lot more SaaS companies in the IPO pipeline than there are chip design, grocery delivery, or footwear companies.

"Klaviyo's IPO will be an ultimate yardstick for SaaS in 2023/2024," tweeted SaaSTR CEO Jason Lemkin. "Top growth, top margins, top founders, will cruise past $1B in ARR. Whatever multiple they end up trading at ... You are almost certainly worth less."

Details: Klaviyo sold 19.2m shares at $30 per share, giving it a fully diluted value of around $9 billion. It originally filed to sell shares at $25-$27, before raising the range to $27-$29.

It reports $15 million of net income on $321m of revenue for the first half of 2023, and will list on the NYSE under ticker symbol "KVYO."

Shareholders include Summit Partners (21.3% pre-IPO stake), Shopify (11.2%) and Accomplice (5.7%). The company's last private round came in July 2022 at a $9.5 billion post-money valuation.

Klaviyo goes public, setting stage for SaaS IPO rush

There may be more eyes on this IPO than there were on Arm or Instacart.

Illustration of an 8-bit envelope with money coming out. 

Initial public offerings (IPO)

From the Valley to D.C., Big Tech players like Facebook, Google and Amazon are under more scrutiny than ever as new technology develops and privacy and antitrust concerns grow in lockstep with companies’ ambitions.

Technology

Some cleaning products, including disinfecting wipes and bleach, are in short supply after a cybersecurity attack at the Clorox Company.

Driving the news: The Clorox Company said it is "operating at a lower rate of order processing and has recently begun to experience an elevated level of consumer product availability issues."

Clorox first announced the attack in August but said Monday that it is now causing "widespread disruption."

This comes as MGM Resorts International struggles to contain the public impact of a cyberattack that has snarled business for more than a week at one of the U.S.'s largest casino operators.

What happened: Clorox said in a regulatory filing Monday that it detected unauthorized activity in some of its information technology systems and "took immediate steps to stop and remediate the activity, including taking certain systems offline."

The company wouldn't comment on what products are most impacted by the shortages.

What's next: The company said it has "already resumed production at the vast majority of its manufacturing sites and expects the ramp up to full production to occur over time."

"At this time, the company cannot estimate how long it will take to resume fully normalized operations," Clorox said.

The bottom line: Shoppers looking for the affected products should have an easier time finding them than the early days of COVID.

Axios found some Clorox products with limited availability in Target and Walmart stores across the county. But many of the items were available for delivery.

Some Clorox products, including disinfecting wipes and bleach, are in short supply following a cyber attack.

Illustration of empty store shelves, with a sign that has a shrug emoji on it.

Consumer product goods - CPG

Grocery delivery company Instacart on Monday raised $660 million in its IPO, after pricing at the high end of its offering range. 

Why it matters: The IPO market is finally heating up after two years on ice, and that could help refresh U.S. stock markets that have experienced a net loss of listed companies.

Chip giant Arm went public last week, while marketing automation software provider Klaviyo is expected to begin trading this Wednesday.

Details: Instacart will begin trading tomorrow on the Nasdaq under ticker symbol "CART."

The $30 per share price represents a $10.2 billion fully diluted valuation, with the company floating less than 10% of its shares.

That's well below the $39 billion valuation it received in its last private round more than two years ago. It's also lower than a subsequent internal valuation reset.

Instacart originally planned to price its shares at $26-$28, before boosting the range to $28-$30.

In addition to the IPO proceeds, PepsiCo agreed to buy $175 million of preferred convertible stock in a concurrent transaction. 

Financials: Instacart reports $242 million of net income on around $1.48 billion of revenue in the first half of 2023, with around one-third of its top-line coming from advertising. 

Go deeper: Instacart's IPO is a big e-commerce test

Instacart raises $660 million in its IPO

IPO revival: First came Arm. Then came Instacart, with Klaviyo around the corner.

Illustration of a bag of groceries and money.

Instacart

Grocery delivery company Instacart plans to price its IPO on Monday night and begin trading on Tuesday, sources tell Axios. 

Behind the scenes: The Nasdaq opening bell will be rung from Instacart's San Francisco headquarters, where the company will be hosting a celebratory event for employees.

A company spokesperson declined to comment. 

Details: Instacart on Friday increased its expected IPO price range to $28-$30 per share from $26-$28 per share. 

This could put the company's fully diluted market value at nearly $10 billion, were it to price at the top of its range. That's still well below where the company was valued in its last private funding round, and below a subsequent internal valuation reset. 

Around $400 million of the shares will be purchased by a group of cornerstone investors, while PepsiCo agreed to buy another $175 million in a concurrent private placement. 

The big picture: Instacart is a major player in the IPO market revival, following this week's listing for chip design giant Arm and before next week's IPO for marketing software company Klaviyo.

Go deeper: Arm's strong performance spurs U.S. IPO optimism

Arm's strong performance spurs U.S. IPO optimism

Instacart plans to go public on Tuesday

Nasdaq is heading to Instacart HQ in San Francisco

an illustration of the wall street bull holding a green shopping basket in its mouth

Macro

Axios Macro

Americans ramped up spending last month as prices for gasoline spiked: retail sales rose a larger-than-expected 0.6% in August, the Commerce Department said Thursday.

Why it matters: The data, which is not adjusted for inflation, shows consumers spent more as costs at the pump surged. But excluding those costs, shoppers still look resilient in the face of higher prices.

By the numbers: The jump in retail sales is much larger than the 0.1% monthly increase that economists expected. 

It's also slightly larger than the 0.5% increase in July, which was revised a tick lower.

Between the lines: Consumers increased spending notably at gasoline stations last month: up more than 5% in August, a byproduct of higher gas prices. 

Still, stripping out spending at gasoline stations and auto shops, consumer spending rose by 0.2% last month — better than the decline of 0.1% economists anticipated. 

The bottom line: Economists anticipate that a slew of factors — including the resumption of student loan payments — will weigh on consumer spending in the months to come. 

Retail sales jump as gas prices soared

Even stripping out spending on gas,  shoppers still look resilient.

Photo: Bill O'Leary/The Washington Post via Getty Images

Economy

Stock market

Birkenstock, the German sandal maker owned founded nearly 250 years ago, has filed for its IPO on the New York Stock Exchange.

Why it matters: This reflects how the recent IPO revival isn't limited to any one sector. Everyone into the pool, even if you're wearing cork-soled sandals.

Details: Birkenstock, founded nearly 250 years ago and now controlled by private equity firm L Catterton, plans to list under ticker "BIRK," with Renaissance Capital estimating that it could raise around $750 million. 

It reports $40 million of net income on €644 million in revenue for the six months ending March 31, 2023, compared to €73 million profit €542 million in revenue for the year-earlier period.

The company has €172 million of cash as of March 31, and €2.3 billion in debt.

More, per Bloomberg: "A listing would cap off a successful run for the company, whose family heirs stepped back from management duties about a decade ago. Since then, it's streamlined strategy, launched high-profile collaborations and experienced explosive growth in demand."

Birkenstock files for its IPO

The IPO revival isn't limited to certain sorts of companies.

an illustration of a shoebox filled with dollar bills

iPhone prices over time, by model

Apple's new iPhone 15 Pro Max is the tech company's priciest phone ever, starting at $1,199 — $100 more than the same model last year but with double the storage.

Driving the news: Apple introduced its full iPhone 15 line — along with the new Apple Watch 9 and Apple Watch Ultra models — during an event Tuesday from its headquarters in Cupertino, California.

The starting prices of other iPhone models remained unchanged from last year, including the iPhone 15 Pro, which Wedbush Securities analyst Daniel Ives called a "surprise move."

Ives wrote in an analyst note that the Pro Max increase is "a smart strategic move with the enhanced technology, A17 chip, and battery technology."

Why it matters: Each year, Apple aims to make the new iPhones compelling enough to convince a significant chunk of existing owners to upgrade, a task that has become harder as the years have gone on, Axios' Ina Fried reports.

Among the enhancements to the latest iPhones are improved cameras and a more standard USB-C charging cable.

The iPhone 15 Pro is displayed after its introduction on the Apple campus, Tuesday, Sept. 12, 2023, in Cupertino, Calif. 

The iPhone 15 Pro is displayed after its introduction on Apple's campus in Cupertino, Calif. Photo: Jeff Chiu/AP

Flashback: The first iPhone debuted in 2007 and started at $499. But the next year, the price dropped to $199 where it stayed for several years.

The prices started climbing in 2016 with a hike to $649 for the iPhone 7 and increased to $699 in 2017 for the iPhone 8.

Apple has had three iPhone SE models, which are billed as the "most affordable iPhone."

Last year, the starting price for iPhone 14 increased to $799.

Like in past years, Apple and wireless carriers will have trade-in deals that make some phones "as low as $0" after monthly credits when trading in eligible iPhone models, according to a news release.

Yes, but: For AT&T and Verizon, the monthly credits are spread over 36 months and T-Mobile's credits are for 24 months.

iPhone 15 preorders start Friday, Sept. 15 and the devices will be available starting Sept. 22.

Apple will roll out its software update days before the new iPhones arrive.

iOS 17 will be available as a free software update on Monday, Sept. 18 Apple said in a news release.

The iOS update is an annual fall tradition that brings new features to Apple's smartphones.

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The most expensive iPhone ever is coming

See how iPhone prices have changed over time.

Apple

A line chart chart showing iPhone prices over time. In 2007, iPhone's cost roughly $500. Since then, a range of models have been introduced with values ranging from $429 to $1,299.

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