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Does a Strong Holiday Shopping Season Mean a Better Year Ahead?

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Does a Strong Holiday Shopping Season Mean a Better Year Ahead?

The retail industry’s report card for the critical holiday shopping season is in.

American shoppers surprised analysts, economists and even retail executives by spending more than expected in November and December. But a closer read shows that not all retailers are benefiting.

Retail sales during the holiday season increased 4 percent from a year earlier, according to data from the Commerce Department. Purchases of cars, clothes and electronics helped bolster sales.

Over the last week or so, some retailers have signaled how business went during the holidays — with more reports to come in February. Target’s November and December total sales rose nearly 3 percent from the prior year, pushed higher as people put more clothes and toys in their shopping carts. Abercrombie & Fitch said sales had exceeded expectations and predicted growth of 7 to 8 percent over the 2023 holiday shopping season.

Lululemon, the maker of $98 leggings and other athletic wear, said it anticipated sales growth of 11 to 12 percent in the fourth quarter. “I still see a consumer that’s healthy,” Calvin McDonald, chief executive of Lululemon, said in an interview.

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For some retailers, though, customers did not seem in a mood to splurge.

Signet Jewelers, which owns Kay Jewelers, Zales and Jared, said its comparable sales would decline as much as 2.5 percent in the fourth quarter because of weaker-than-expected sales in the days leading up to Christmas. When it came to “fashion gifting,” customers “gravitated to lower price points even more than anticipated,” Joan Hilson, Signet’s chief financial and operating officer, said in a statement, and the company did not have enough of what shoppers were seeking.

Macy’s, which warned analysts in December that its customers were holding back, said sales were roughly flat during the fourth quarter. The department store chain is in a monthslong process of closing 66 of its 479 stores, from Philadelphia to Sacramento, with more to come through 2026. But it said comparable sales had increased at the Macy’s locations that it sees as its future, as well as Bloomingdale’s and the beauty chain Bluemercury, which it also owns.

Macy’s is not the only chain that is contracting. Kohl’s, which has had 11 consecutive quarters of declining sales, said it would shutter 27 “underperforming” stores by April. The department store chain has more than a thousand stores.

Since 2022, as inflation curtailed consumer spending and shoppers limited their visits to favored stores, foot traffic and sales have slowed. The bounce that the holiday season usually offers retailers was not able to save all of them.

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In the last month, a number of struggling retailers — the fabric and crafts chain Joann, the Container Store and Party City — declared bankruptcy. Party City and Big Lots, which declared bankruptcy in September, are closing all of their stores.

“If there’s a company out there that was sort of praying for holiday to really save them, my guess is that it probably didn’t save them,” said Isaac Krakovsky, a retail sector leader at the consultancy EY, who is in frequent communication with retail executives. “It probably gave them enough time to limp along for a little further because of the promotional nature of holiday.”

The forecast for the U.S. economy also remains foggy. Some forecasters expect U.S. economic growth in 2025 to be around 2 percent, once adjusted for inflation, which would be a modest slowdown from roughly 2.5 percent growth in 2024. But the International Monetary Fund said on Friday that it expected U.S. economic growth to accelerate slightly this year.

Many analysts are reluctant to see the surprising strength of the holiday shopping season as an indication of how consumer spending might pan out in 2025, given the many uncertainties with the incoming Trump administration and how fiscal policies may affect buying decisions.

“There’s a question mark on what policies are announced in January that could make the consumer think twice before their spending,” said Mickey Chadha, a vice president at Moody’s Ratings. “It could be tariffs, it could be immigration, it could be taxes. There are a lot of different policy changes that could impact the mind-set of the consumer.”

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Mr. Krakovsky, the EY consultant, echoed that sentiment.

“We’re not seeing this as an indication of gangbuster growth coming in the next year,” he said. “It’s cautious growth expected in 2025.”

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San Diego County agency selling water to keep its high rates in check

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San Diego County agency selling water to keep its high rates in check

San Diego County’s water agency is selling some of its water to another Southern California agency to help limit increasingly high water costs for 3.3 million people.

The water is going to Western Municipal Water District, which serves a growing area of nearly 1 million people in Riverside County, including Corona, Riverside and Temecula.

The San Diego County Water Authority will transfer at least 10,000 acre-feet of water per year over the next 21 years, enough for about 30,000 typical households.

The agencies said the deal will be worth about $100 million over the first five years.

The San Diego County agency has invested heavily to get more water in recent decades. In 2003, it struck an agriculture-to-urban transfer deal and it also buys water from the Carlsbad desalination plant under a 30-year agreement. These actions have brought San Diego County plentiful water — also some of the most expensive in the state. At the same time, conservation efforts in San Diego County have reduced water needs.

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The San Diego County Water Authority delivers water to 22 cities and other agencies. Last year its board approved raising wholesale water rates 8.3%, which drew criticism from residents who said they were already struggling to afford their water bills.

Board Chair Nick Serrano said the deal “allows us to maximize the value of the investments San Diego County residents made over decades, strengthen water reliability, and do so in a way that is mindful of affordability.”

The two agencies said in a joint statement on Thursday that for Western Municipal, the additional water will help during drought and ensure reliable water without the cost and time involved in developing new water infrastructure projects.

The water will move from one area to the other through the pipelines of the Metropolitan Water District of Southern California, the regional wholesaler that imports water from the Colorado River and Northern California. Both San Diego County and Western Municipal are members of the MWD.

An agreement between the MWD and the San Diego County Water Authority last year ended a 15-year legal battle over water costs and cleared the way for San Diego County to start selling some of its excess water to areas that need it.

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Gasoline price gouging in California draws a warning

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Gasoline price gouging in California draws a warning

California’s petroleum market watchdog is warning about price gouging at some gas stations charging over $7 or even $8 a gallon as the Iran war sends oil prices soaring.

The average price of gas in California is currently $5.66, but as of Friday, a Chevron station in Essex is charging $9.69, another in Los Angeles’ Chinatown is charging $8.71, and one in Vidal Junction is charging $7.79, according to GasBuddy, which tracks prices across the country.

“Our team is vigilantly monitoring the retail, wholesale, and spot markets,” said Tai Milder, director of the California Energy Commission Division of Petroleum Market Oversight, in a statement. “Any reports of unfair practices or market manipulation will be taken seriously, and we will not hesitate to refer any illegal conduct for further investigation and prosecution.”

Gas prices have jumped some 30% nationally since the U.S. and Israel attacked Iran three weeks ago and Iran blocked 20% of the global oil supply. Californians, who already faced prices over $1 per gallon higher than the national average, are especially feeling the squeeze.

The extremely high prices at some gas stations in California “are not supported by current crude oil prices or gasoline futures,” the division said.

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California’s oil and gas watchdog division was created in 2023 to provide greater insight into the state’s petroleum market after summer gas price spikes exceeded $6 per gallon two years in a row.

The state consistently sees the highest fuel prices in the country due to state taxes and fees, environmental programs, a cleaner fuel blend requirement and an isolated petroleum market, where 80% of gasoline comes from in-state refineries.

This isolation makes California gas prices more sensitive to refinery outages and market manipulation. In 2024 the division reported that, after accounting for environmental rules and taxes, Californians still pay an extra 41 cents more per gallon and the largest share of that goes to industry profit. They also found that the price spikes of the previous two years were caused by refineries going offline without backup supply and “potentially manipulative trading” in those under-supply conditions.

Lawmakers and regulators have been more quiet about price gouging of late and the energy commission put a decision to impose a profit cap on refiners on hold after a series of refinery closures raised concerns about future fuel supply shortages.

Jamie Court, the president of the nonprofit ratepayer advocacy group Consumer Watchdog, said the fact that the gap between national and California prices has widened since the start of the war is evidence of price gouging.

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“We know they made 49 cents per gallon in January,” said Court, of the refineries. “We know now that their margins are closer to $1.25 per gallon,” he said, citing the group’s analysis of state and Oil Price Information Service data.

Chevron said in a statement that most of its gas stations are owned and operated by independent business people who are “free to set the retail price of fuel and other products.”

“Those costs are generally determined by fundamental economic forces like demand, supply and competition,” said spokesperson Ross Allen, who added that crude oil prices, which make up the bulk of gas prices, have gone up but California’s taxes and environmental fees can also add over $1.20 a gallon.

Valero, Marathon Petroleum, and Shell did not respond immediately to requests for comment.

The petroleum oversight agency said it reached out to stations where pricing appears “excessive and disproportionate to increases in those sellers’ costs” including “multiple stations in Los Angeles and San Bernardino counties, in addition to multiple stations in Northern California” since the war began.

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It also encouraged Californians “to shop around and compare prices between name-brand and unbranded (or generic) gasoline.”

“While retailers typically charge more for branded gasoline, all gasoline sold in California must meet the state’s high standards for emissions control and engine performance,” read the statement.

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California attorney general asks judge to block Nexstar-Tegna merger

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California attorney general asks judge to block Nexstar-Tegna merger

California Atty. Gen. Rob Bonta is asking a judge to unravel Nexstar Media Group’s $6.2-billion acquisition of rival TV station owner Tegna — the latest in a flurry of merger twists.

Nexstar announced late Thursday that it had consummated the Tegna takeover — despite a lawsuit that Bonta and seven other Democratic state attorneys general had filed in federal court the previous day.

The state officials sued to block the union of the station groups, alleging the new colossus would violate antitrust rules and a federal law limiting broadcast station ownership.

The lawsuit was filed in U.S. District Court in Sacramento.

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Hours after that filing, the Federal Communications Commission’s Media Bureau in Washington approved Nexstar’s deal — clearing the way for the nation’s largest TV station group owner to swallow the third-largest station group.

The purchase gives Nexstar, which owns KTLA-TV Channel 5 in Los Angeles, 265 television stations.

On Friday, Bonta and the other attorneys general asked a judge for a temporary restraining order to freeze the takeover until a hearing on the matter.

“Nexstar/Tegna is not a done deal,” Bonta said Friday in a statement. “I will not let these corporate behemoths merge without a fight.”

It was not immediately clear when a judge might rule on the request for a restraining order.

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Bonta appeared at a lawmakers’ hearing in Burbank on Friday to explore the impacts of another huge merger: Paramount Skydance’s proposed $111-billion takeover of Warner Bros. Discovery. Bonta’s office has opened an investigation into the Paramount-Warner merger, but Bonta said Friday that no decision has been made on whether he or other attorneys general will seek to block it.

For now, he is focused on derailing the Nexstar-Tegna deal.

“We filed a suit before that deal closed,” Bonta told The Times. “We think our case is extremely strong. There is no way this should be approved.”

At issue is whether the FCC had the power to grant a waiver that would allow Nexstar to control TV stations that reach nearly 80% of U.S. households. In 2003, Congress set the station ownership cap at 39% of the country.

The Department of Justice also gave its blessing to close the deal.

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The three FCC commissioners did not vote on the matter — despite pleas from the lone Democrat on the panel who advocated for an open process.

Approval of the merger was rapid after President Trump endorsed the consolidation on Feb. 7.

“We need more competition against THE ENEMY, the Fake News National TV Networks,” Trump wrote in his social media post.

“Letting Good Deals get done like Nexstar – Tegna will help knock out the Fake News because there will be more competition, and at a higher and more sophisticated level,” Trump wrote. “GET THAT DEAL DONE!”

In a statement Thursday, Nexstar founder and chief executive Perry Sook thanked Trump and FCC Chairman Brendan Carr, saying Nexstar was “grateful” they recognized the “dynamic forces shaping the media landscape” and allowed the transaction to move forward.

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