Axios Closer

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Monday ✅.

Today's newsletter is 691 words, a 2½-minute read.

🔔 The dashboard: The S&P 500 closed down 0.2%.

  • Biggest gainer? 3M (+6.0%), the manufacturing company, completed its Solventum health care spinoff and announced final approval of a $10 billion settlement with U.S. public water suppliers.
  • Biggest decliner? Walgreens Boots Alliance (-9.9%), the retail pharmacy chain, following a lowered stock price target from Morgan Stanley.

1 big thing: Small is the new big

Illustration: Annelise Capossela/Axios

Ikea is planting smaller stores across the country and around the world.

Why it matters: Like other retailers, Ikea wants to make it easy for shoppers to buy online and in person.

Driving the news: Axios toured one of the furniture brand's newest small-format stores last Thursday.

  • Located 40 minutes outside of D.C., the Ikea Plan and Order Point in Gaithersburg, Maryland, is about 8,800 square feet, or 2% the size of the closest warehouse store in College Park.

Between the lines: The Gaithersburg location, which opened mid-March, carries about 500 "really popular takeaway" products, compared to about 10,000 in traditional Ikea stores, market manager Tony Giacona tells Axios.

  • And attached, but separate, is an online order pickup area.

What they're saying: "This doesn't replace any of the bigger stores," said Giacona.

  • "You can plan or you can order anything that a regular store carries and pick it up here."

Hope's impressions: Ikea's warehouse stores can be overwhelming.

  • This store was not.
  • Visiting scratched a certain itch that one can get when bit by a redecorating bug, without the risk of impulse purchases.

The intrigue: The store lacked a cafe and even frozen meatball options, as that would require additional grocery and food sale licenses — but it's "definitely on the table [and] is frequently requested from customers."

Three fun things: As a 31-year veteran of the company, Giacona describes three typical Ikea shoppers:

  • The people who know what they want and come in with a list.
  • Those who want to touch and feel for inspiration.
  • Those looking to validate a coming online purchase.

2. Charted: The U.S. Postal Service has a new ride

Data: Yahoo Finance; Chart: Axios Visuals

UPS is replacing FedEx as the U.S. Postal Service's primary air cargo provider.

Why it matters: USPS accounted for $1.7 billion in revenue last year for FedEx, though that figure has been in decline in recent years.

Between the lines: Despite being the largest customer for FedEx's Express segment, the contract had become a drag on profitability.

  • FedEx today said it will now be able to eliminate structural costs "currently in place to support postal service volume."
  • The new contract with UPS is set to begin Sept. 30.

What we're watching: UPS called the 5.5-year minimum base term contract "significant," and CEO Carol Tomé said the parties have developed a "mutually beneficial" solution that complements UPS' network.

  • Despite a pre-market pop, UPS shares closed down 0.7%.

3. What's happening

↔️ Microsoft will sell Teams separately from Office globally, six months after it unbundled the two in Europe. (CNBC)

🧑‍💻 Google plans to destroy web-browsing data as part of a class action lawsuit settlement. (WSJ)

📉 Truth Social disclosed a $58 million net loss for 2023, shares plunge. (Axios)

4. Tesla delivery expectations

Quarterly Tesla vehicle deliveries
Data: FactSet, Wedbush Securities, Deutsche Bank, Morgan Stanley; Chart: Tory Lysik/Axios Visuals

Analysts predict a big decline in Tesla's deliveries in the January–March period when the electric automaker reports global numbers tomorrow.

Why it matters: Delivery tallies are a rough proxy for sales and demand from the dominant U.S. EV player — and until recently the global leader before China's BYD inched ahead.

The big picture: Tesla-watchers will parse how much the slowdown stems from market headwinds hitting everyone versus problems more specific to Tesla, like an aging lineup and competitors in key markets like China.

  • The analyst hive-mind tallied by financial data firm FactSet sees 457,000 deliveries, compared with roughly 484,500 Tesla reported in Q4.

Go deeper

5. What they're saying

Emma Chamberlain at the 2023 Met Gala in New York. Photo: Lexie Moreland/WWD via Getty Images

Multihyphenate Gen Z influencer and entrepreneur Emma Chamberlain may have started her career on YouTube, but she doesn't intend to put her kids in her videos, she told WSJ.

  • "Some people are in the public eye for their whole lives. I don't know if I see that for myself," she said.

Hope's other favorite takeaways:

  • On letting go of perfectionism: "I could be doing a f—ing puzzle or even playing a video game, like, who cares if you fail at that? When everything you do in life is high stakes, you get stuck in that mindset."
  • One piece of advice that's guided her: "I think sometimes we can make choices based on what's going to be the most impressive in the public eye, or for financial reasons. My dad has always told me to make the choice that's going to make me feel the most fulfilled."

Today's newsletter was edited by Pete Gannon and copy edited by Sheryl Miller.

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