Business
$30 water bottles. $20 for paper. The sticker shock is real this school shopping season
Despite hopes that high inflation is cooling, Americans are expected to spend a record amount on school supplies this year, and many families in Los Angeles are feeling the squeeze.
At Target and Walmart stores over the weekend, children and their parents perused the aisles for their back-to-school essentials, such as pencils and glue sticks. For some, excitement quickly turned into negotiation.
Shauna McDonnell, 49, had to put her foot down with her 6-year-old, Willow, who begged for a $30 water bottle at Target in Burbank.
McDonnell said prices have been “pretty good” at Target, but she finds herself debating whether Willow, who is about to start first grade at a public school, needs all new products.
“Do I make her use the ones at home? There’s nothing wrong with them. They’re not broken,” McDonnell said.
The water bottle, for one, did not make the cut.
“I think the water bottles are probably the biggest inflated product,” McDonnell said.
Back-to-school spending for K-12 students is expected to total $41.5 billion, up from a previous high of $37.1 billion in 2021, according to a survey by the National Retail Federation and Prosper Insights & Analytics. The annual survey tracks consumers’ planned spending for each school year in the categories of school supplies, electronics, clothing and accessories, and shoes. The survey found that demand for electronics is helping drive up spending.
Families with children in elementary, middle and high schools expect to spend an average of $890.07 on back-to-school items this year, the survey found. It also noted that, as of early July, 55% of consumers had already begun purchasing items for the school year, a number in line with last year’s data but up from 44% in 2019.
Katherine Cullen, vice president of industry and consumer insights at the National Retail Federation, said this demonstrates consumers’ “value mind-set.”
Consumers “might feel comfortable spending record amounts on back-to-school, but they are looking to make every dollar count,” she said. “So they are starting earlier to take advantage of sales and deals, they are shopping around more, they may be a little less brand loyal.” Cullen added that shoppers are more willing to try private label brands — or store brands — this year.
This more agnostic approach to brands and where to shop has been trending in other sectors, such as groceries, as consumers are strategizing how to stretch their dollar to cope with still-high inflation.
At a Walmart in Burbank on Sunday, people navigated through busy aisles under dim lighting to get their children supplies. Clarito Villanueva, 47, shopped with his four daughters, three of whom are going back to private school this month. The school-age children ran through the aisles with their school supply lists crinkled in their hands, waiting for Villanueva to approve or reject the items they selected.
With rising costs, Villanueva has found himself saying “no” more often. He is looking for deals but also wants to buy high-quality items.
Backpacks and lunchboxes have been the most expensive items, even the “basic” ones, Villanueva said.
“I have three kids [in school], so it’s going to be costly,” Villanueva said.
Some parents have also found themselves subsidizing classroom costs in addition to buying supplies for their child, including Alberto Villasenor, 44, who shopped for his 5-year-old son Riot, at Target nearby.
It’s his second time back-to-school shopping for Riot, who is going into kindergarten at a public school, and he has noticed that the prices of many items have gone up this year.
“I mean, everything’s going up now,” Villasenor said, adding that “there’s just more rising costs.”
Villasenor does not expect to spend more than $150 on school supplies for Riot, but the costs don’t stop there. Last year, Riot’s public school asked for parents to donate classroom supplies, such as markers, so he’s buying extra in anticipation of another call-out this year. He also needs to buy new clothes for his son.
“So, it’s just buying up more extra than what you’re expecting,” Villasenor said.
Although shoppers seem willing to spend more than in years past, their dollars aren’t going as far. And some see school supplies as essential items that they aren’t willing to cut back on.
The cost of essential school supplies has gone up noticeably since last year, according to data provided to The Times by market analytics firm NielsenIQ.
Writing tools and supplies — including crayons, highlighters, pens, and pencils — have increased an average of 18.5% in the last 10 months. (The Times used NielsenIQ data to calculate the percent change in average unit price from the four-week period that ended Sept. 3, 2022, compared with the four-week period that ended July 1, 2023.)
Paper goods have experienced even more dramatic price surges. The cost of planners, binders and folders has gone up an average of 48.5% in that same period. The price of “paper and forms” for school and office has jumped 80%.
Such prices would have been unfathomable just a few years ago. In August 2018, a pack of pencils cost around $2.23, compared with $3.24 in June 2023 — a 45.3% increase. Concurrently, lunchboxes jumped from an average price of $7.87 to $12.83, an increase of 63%.
Teachers are feeling the squeeze too. To help fund her classroom’s supplies for the upcoming school year, Temecula fourth-grade teacher Kinsey Abt hopes that Amazon can help.
Abt, 25, is one of tens of thousands of teachers this year who have created an Amazon “wish list” — a personalized online registry filled with her classroom essentials for the upcoming school year.
Abt has shared her link with friends, family and even Instagram influencers in the hopes that some will purchase essential items. Sharing her wish list with an influencer, she hopes, could attract some of their followers to chip in.
“I probably will just keep posting my list and hoping for donations, and then just kind of chipping away at it myself until I can get what I really, really need, and then obviously the extras just as I have the money for them,” she said.
The practice of educators creating digital wish lists has grown in popularity in recent years as teachers increasingly dip into their own wallets to make ends meet in their classrooms and the cost of school supplies has soared. Abt says that every teacher she knows has Amazon lists that they try to circulate far and wide before the school year starts.
Abt’s school reimburses teachers for up to $250 of their classroom costs annually, and although she is grateful for the assistance, she says that money can only go so far.
“I believe a ream of colored construction paper is like $20,” Abt said. “Like one package of paper.”
Expenses, however small, add up. Abt says “it’s really everything” together that causes her to feel an impact: notebooks, Sharpies, and whiteboard markers for her classroom on top of rising personal expenses at home, such as her weekly grocery run.
“I know that you don’t necessarily need everything in the world to teach, but it definitely helps,” she said, “and you want to be able to support the students that don’t have as much support at home.”
Business
Cookies, Cocktails and Mushrooms on the Menu as Justices Hear Bank Fraud Case
In a lively Supreme Court argument on Tuesday that included references to cookies, cocktails and toxic mushrooms, the justices tried to find the line between misleading statements and outright lies in the case of a Chicago politician convicted of making false statements to bank regulators.
The case concerned Patrick Daley Thompson, a former Chicago alderman who is the grandson of one former mayor, Richard J. Daley, and the nephew of another, Richard M. Daley. He conceded that he had misled the regulators but said his statements fell short of the outright falsehoods he said were required to make them criminal.
The justices peppered the lawyers with colorful questions that tried to tease out the difference between false and misleading statements.
Chief Justice John G. Roberts Jr. asked whether a motorist pulled over on suspicion of driving while impaired said something false by stating that he had had one cocktail while omitting that he had also drunk four glasses of wine.
Caroline A. Flynn, a lawyer for the federal government, said that a jury could find the statement to be false because “the officer was asking for a complete account of how much the person had had to drink.”
Justice Ketanji Brown Jackson asked about a child who admitted to eating three cookies when she had consumed 10.
Ms. Flynn said context mattered.
“If the mom had said, ‘Did you eat all the cookies,’ or ‘how many cookies did you eat,’ and the child says, ‘I ate three cookies’ when she ate 10, that’s a false statement,” Ms. Flynn said. “But, if the mom says, ‘Did you eat any cookies,’ and the child says three, that’s not an understatement in response to a specific numerical inquiry.”
Justice Sonia Sotomayor asked whether it was false to label toxic mushrooms as “a hundred percent natural.” Ms. Flynn did not give a direct response.
The case before the court, Thompson v. United States, No. 23-1095, started when Mr. Thompson took out three loans from Washington Federal Bank for Savings between 2011 and 2014. He used the first, for $110,000, to finance a law firm. He used the next loan, for $20,000, to pay a tax bill. He used the third, for $89,000, to repay a debt to another bank.
He made a single payment on the loans, for $390 in 2012. The bank, which did not press him for further payments, went under in 2017.
When the Federal Deposit Insurance Corporation and a loan servicer it had hired sought repayment of the loans plus interest, amounting to about $270,000, Mr. Thompson told them he had borrowed $110,000, which was true in a narrow sense but incomplete.
After negotiations, Mr. Thompson in 2018 paid back the principal but not the interest. More than two years later, federal prosecutors charged him with violating a law making it a crime to give “any false statement or report” to influence the F.D.I.C.
He was convicted and ordered to repay the interest, amounting to about $50,000. He served four months in prison.
Chris C. Gair, a lawyer for Mr. Thompson, said his client’s statements were accurate in context, an assertion that met with skepticism. Justice Elena Kagan noted that the jury had found the statements were false and that a ruling in Mr. Thompson’s favor would require a court to rule that no reasonable juror could have come to that conclusion.
Justices Neil M. Gorsuch and Brett M. Kavanaugh said that issue was not before the court, which had agreed to decide the legal question of whether the federal law, as a general matter, covered misleading statements. Lower courts, they said, could decide whether Mr. Thompson had been properly convicted.
Justice Samuel A. Alito Jr. asked for an example of a misleading statement that was not false. Mr. Gair, who was presenting his first Supreme Court argument, responded by talking about himself.
“If I go back and change my website and say ‘40 years of litigation experience’ and then in bold caps say ‘Supreme Court advocate,’” he said, “that would be, after today, a true statement. It would be misleading to anybody who was thinking about whether to hire me.”
Justice Alito said such a statement was, at most, mildly misleading. But Justice Kagan was impressed.
“Well, it is, though, the humblest answer I’ve ever heard from the Supreme Court podium,” she said, to laughter. “So good show on that one.”
Business
SEC probes B. Riley loan to founder, deals with franchise group
B. Riley Financial Inc. received more demands for information from federal regulators about its dealings with now-bankrupt Franchise Group as well as a personal loan for Chairman and co-founder Bryant Riley.
The Los Angeles-based investment firm and Riley each received additional subpoenas in November from the U.S. Securities and Exchange Commission seeking documents and information about Franchise Group, or FRG, the retail company that was once one of its biggest investments before its collapse last year, according to a long-delayed quarterly filing. The agency also wants to know more about Riley’s pledge of B. Riley shares as collateral for a personal loan, the filing shows.
B. Riley previously received SEC subpoenas in July for information about its dealings with ex-FRG chief executive Brian Kahn, part of a long-running probe that has rocked B. Riley and helped push its shares to their lowest in more than a decade. Bryant Riley, who founded the company in 1997 and built it into one of the biggest U.S. investment firms beyond Wall Street, has been forced to sell assets and raise cash to ease creditors’ concerns.
The firm and Riley “are responding to the subpoenas and are fully cooperating with the SEC,” according to the filing. The company said the subpoenas don’t mean the SEC has determined any violations of law have occurred.
Shares in B. Riley jumped more than 25% in New York trading after the company’s overdue quarterly filing gave investors their first formal look at the firm’s performance in more than half a year. The data included a net loss of more than $435 million for the three months ended June 30. The shares through Monday had plunged more than 80% in the past 12 months, trading for less than $4 each.
B. Riley and Kahn — a longstanding client and friend of Riley’s — teamed up in 2023 to take FRG private in a $2.8-billion deal. The transaction soon came under pressure when Kahn was tagged as an unindicted co-conspirator by authorities in the collapse of an unrelated hedge fund called Prophecy Asset Management, which led to a fraud conviction for one of the fund’s executives.
Kahn has said he didn’t do anything wrong, that he wasn’t aware of any fraud at Prophecy and that he was among those who lost money in the collapse. But federal investigations into his role have spilled over into his dealings with B. Riley and its chairman, who have said internal probes found they “had no involvement with, or knowledge of, any alleged misconduct concerning Mr. Kahn or any of his affiliates.”
FRG filed for Chapter 11 bankruptcy in November, a move that led to hundreds of millions of dollars of losses for B. Riley. The collapse made Riley “personally sick,” he said at the time.
One of the biggest financial problems to arise from the FRG deal was a loan that B. Riley made to Kahn for about $200 million, which was secured against FRG shares. With that company’s collapse into bankruptcy in November wiping out equity holders, the value of the remaining collateral for this debt has now dwindled to only about $2 million, the filing shows.
Griffin writes for Bloomberg.
Business
Starbucks Reverses Its Open-Door Policy for Bathroom Use and Lounging
Starbucks will require people visiting its coffee shops to buy something in order to stay or to use its bathrooms, the company announced in a letter sent to store managers on Monday.
The new policy, outlined in a Code of Conduct, will be enacted later this month and applies to the company’s cafes, patios and bathrooms.
“Implementing a Coffeehouse Code of Conduct is something most retailers already have and is a practical step that helps us prioritize our paying customers who want to sit and enjoy our cafes or need to use the restroom during their visit,” Jaci Anderson, a Starbucks spokeswoman, said in an emailed statement.
Ms. Anderson said that by outlining expectations for customers the company “can create a better environment for everyone.”
The Code of Conduct will be displayed in every store and prohibit behaviors including discrimination, harassment, smoking and panhandling.
People who violate the rules will be asked to leave the store, and employees may call law enforcement, the policy says.
Before implementation of the new policy begins on Jan. 27, store managers will be given 40 hours to prepare stores and workers, according to the company. There will also be training sessions for staff.
This training time will be used to prepare for other new practices, too, including asking customers if they want their drink to stay or to go and offering unlimited free refills of hot or iced coffee to customers who order a drink to stay.
The changes are part of an attempt by the company to prioritize customers and make the stores more inviting, Sara Trilling, the president of Starbucks North America, said in a letter to store managers.
“We know from customers that access to comfortable seating and a clean, safe environment is critical to the Starbucks experience they love,” she wrote. “We’ve also heard from you, our partners, that there is a need to reset expectations for how our spaces should be used, and who uses them.”
The changes come as the company responds to declining sales, falling stock prices and grumbling from activist investors. In August, the company appointed a new chief executive, Brian Niccol.
Mr. Niccol outlined changes the company needed to make in a video in October. “We will simplify our overly complex menu, fix our pricing architecture and ensure that every customer feels Starbucks is worth it every single time they visit,” he said.
The new purchase requirement reverses a policy Starbucks instituted in 2018 that said people could use its cafes and bathrooms even if they had not bought something.
The earlier policy was introduced a month after two Black men were arrested in a Philadelphia Starbucks while waiting to meet another man for a business meeting.
Officials said that the men had asked to use the bathroom, but that an employee had refused the request because they had not purchased anything. An employee then called the police, and part of the ensuing encounter was recorded on video and viewed by millions of people online, prompting boycotts and protests.
In 2022, Howard Schultz, the Starbucks chief executive at the time, said that the company was reconsidering the open-bathroom policy.
-
Health1 week ago
Ozempic ‘microdosing’ is the new weight-loss trend: Should you try it?
-
Technology6 days ago
Meta is highlighting a splintering global approach to online speech
-
Science4 days ago
Metro will offer free rides in L.A. through Sunday due to fires
-
Technology1 week ago
Las Vegas police release ChatGPT logs from the suspect in the Cybertruck explosion
-
Movie Reviews1 week ago
‘How to Make Millions Before Grandma Dies’ Review: Thai Oscar Entry Is a Disarmingly Sentimental Tear-Jerker
-
Health1 week ago
Michael J. Fox honored with Presidential Medal of Freedom for Parkinson’s research efforts
-
Movie Reviews1 week ago
Movie Review: Millennials try to buy-in or opt-out of the “American Meltdown”
-
News1 week ago
Photos: Pacific Palisades Wildfire Engulfs Homes in an L.A. Neighborhood