German business groups expressed dismay on Thursday after Chancellor Angela Merkel and state leaders agreed a gradual easing of coronavirus curbs but added an “emergency brake” to reimpose restrictions if case numbers get out of control.
“The results of the coronavirus summit are a disaster for the retail sector,” said Stefan Genth, chief executive of the HDE retail association.
Under the five-stage plan agreed late on Wednesday, up to five people from two households will be allowed to meet from March 8, with children under 14 exempt. Some shops, including book stores and garden centres, can reopen.
Other retailers can only reopen in regions where case numbers are below 50 cases per 100,000 people over seven days. If the incidence rises above 50, ‘click and meet’ restrictions kick in, whereby customers book a slot to go to the store.
On Thursday, Germany’s seven-day case average rose to 64.7 from 64 on Wednesday. New infections increased by 11,912 to 2,471,942 and the death toll rose by 359 to 71,240.
“The stable incidence of 50 prescribed for opening shops is not in sight,” the HDE said, adding that retailers were likely to lose another 10 billion euros ($12.1 billion) in sales by the end of March compared to 2019.
Merkel’s chief of staff Helge Braun defended the decision to ease curbs only gradually, telling ARD public broadcaster that the emergency brake for regions with incidence rates above 100 was needed to avoid a third wave of infections.
“That’s very important… because the opening steps come at a time when the numbers are slightly going up again and the British mutant is becoming the most common virus type in our country. So we have to remain cautious”, Braun said.
The HDE was sceptical about the possibility of shopping by appointment, noting that personnel and operating costs would probably be higher than the turnover.
Hans Peter Wollseifer, president of the association representing skilled trades, called for faster progress on vaccination and mass testing for COVID-19.
“In order to prevent the death of businesses on a broad front, economic life must be made possible again as quickly as possible,” Wollseifer said. “The decisions taken now do not do justice to this.”
He called for other criteria had to be taken more into account instead of just focusing on the level of infections, such as the situation in intensive care units in hospitals as well as progress in testing and vaccination.
Walt Disney Co will close at least 60 Disney retail stores in North America this year as the company revamps its digital shopping platforms to focus on e-commerce, the company said on Wednesday.
Disney also is evaluating a significant reduction of stores in Europe, a spokesperson said, adding that locations in Japan and China will not be affected. The company currently operates roughly 300 Disney stores around the globe.
Disney did not say how many people would lose their jobs as a result of its store closures.
Consumers have been moving to digital shopping over physical locations, and chains including Walmart Inc and Macy’s Inc have shuttered physical stores. The global coronavirus pandemic accelerated that change in behavior when people were forced to stay home.
“While consumer behavior has shifted toward online shopping, the global pandemic has changed what consumers expect from a retailer,” said Stephanie Young, president of Disney’s consumer products, games and publishing.
Over the past few years, Disney has expanded its shops inside other retailers such as Target. Those locations will continue to operate, as well as Disney Parks Stores. Disney-licensed products also will remain widely available through third-party retailers.
“We now plan to create a more flexible, interconnected ecommerce experience that gives consumers easy access to unique, high-quality products across all our franchises,” Young said.
Digital shopping gives Disney a chance to offer a much broader selection and include higher-end products from all of its Disney, Pixar, Marvel and Star Wars brands.
New products will be introduced including adult apparel, artist collaborations, streetwear, premium home products and collectibles, the company said.
Disney will revamp its shopDisney apps and websites over the next year.
Disney recently launched new digital marketplaces in Australia, New Zealand and India.
U.S. private employers hired fewer workers than expected in February, suggesting the labor market was struggling to regain speed despite the an nation’s improving public health picture.
Private payrolls increased by 117,000 jobs last month, the ADP National Employment Report showed on Wednesday. Data for January was revised up to show 195,000 jobs added instead of the initially reported 174,000.
Economists polled by Reuters had forecast private payrolls would increase by 177,000 jobs in February.
The ADP report is jointly developed with Moody’s Analytics. It has a very poor track record predicting the private payrolls count in the government’s more comprehensive, and closely watched, employment report because of methodology differences. The ADP report’s initial 174,000 private payrolls tally for January way overshot the Labor Department’s total of only 6,000.
“It remains difficult to use the ADP data as a signal for forecasting the Labor Department employment figures,” said Daniel Silver, an economist at JPMorgan in New York.
Nevertheless, the report is still followed for clues on the labor market’s health.
The labor market has been slow to regain traction as some restrictions on services businesses have been rolled back amid a decline in new COVID-19 infections and hospitalizations.
The number of Americans filing initial claims for weekly state unemployment benefits remains way above its 665,000 peak during the 2007-09 Great Recession. At least 19 million people are collecting unemployment checks.
The lack of significant improvement in the labor market is also despite nearly $900 billion an additional pandemic relief provided by the government in late December, which boosted consumer spending and positioned the economic for faster growth in the first quarter. That has led to concerns of labor market scarring that could take years to heal.
According to a Reuters poll of economists, the government will likely report on Friday that nonfarm payrolls increased by 180,000 jobs in February after rising only 49,000 in January.
Hopes for a pick-up in hiring were supported by a survey last week showing consumers’ perceptions of the labor market improved in February after deteriorating in January and December. In addition, a measure of manufacturing employment increased to a two-year high in February.
The economy has recovered 12.3 million of the 22.2 million jobs lost during the pandemic. Employment is not expected not return to its pre-pandemic level before 2024.
Texas will lift its mask requirement and allow businesses to reopen at full capacity next week, Governor Greg Abbott has announced.
“It is now time to open Texas 100%,” the Republican said on Tuesday.
Texas is the largest US state to end its mask mandate. Mr Abbott has faced criticism from his party over the measure, which was imposed last July.
But the administration of US President Joe Biden has made it clear coronavirus restrictions are still necessary.
The announcement in Texas came as similar rules were lifted in other states, including Michigan, Louisiana, and Mississippi, which also ended its mask mandate.
The roll-out of vaccinations against Covid-19 has boosted confidence in a return to pre-pandemic life in the US.
On Tuesday, President Biden said the US was on track to have enough vaccines for every adult in the country by the end of May.
Yet the wave of reopenings has put states at odds with the Biden administration and its senior health officials, who have reacted with dismay to the relaxation of coronavirus measures at a precarious time in the pandemic.
On Monday the director of the US Centers for Disease Control and Prevention (CDC) warned of a “potential fourth surge of cases” if the country lapsed into complacency.
Covid-19 data shows that, while infections and deaths have declined in recent weeks, they are still at high levels relative to other countries.
In total, the US has recorded more than 28 million infections and 516,000 deaths related to Covid-19, according to data collated by Johns Hopkins University.
What did the Texas governor announce?
Mr Abbott issued an executive order that rescinded most of the coronavirus measures he imposed earlier in the pandemic.
The new executive order, which is to take effect on 10 March, lifts all mask requirements and forbids local authorities from penalising residents who do not wear a face covering.
It removes all restrictions on businesses in counties without a high number of Covid-19 patients in hospital.
“Too many Texans have been sidelined from employment opportunities,” Mr Abbott said in a speech at the Chamber of Commerce in the city of Lubbock. “Too many small business owners have struggled to pay their bills. This must end.”
He said that with increased vaccinations and improved treatment for Covid-19, the state was “in a far better position now”.
Texas has recorded more than 43,000 deaths related to Covid-19, the third-highest state toll in the US.
Texas puts White House relations to the test
Angelica Casas, reporting from San Antonio, Texas
Governor Abbott’s announcement was no surprise to Texans. After all, the state’s pandemic response has been political from the start.
The state’s Republican leadership favoured former President Donald Trump’s relatively relaxed approach to imposing restrictions. But that created tension with local officials in the state’s major cities, which all lean Democrat.
It was control of the disease vs control of the economy. Mask requirements vs maintaining personal liberties. And when the surges came, state politicians were more reactive than proactive.
A year later, not much has changed. The state’s death toll and current case rate are still among the highest in the US. That’s why critics say Governor Abbott’s decision does not follow the science.
So the decision will be a test to the state – but also to Mr Abbott’s relationship with President Biden, who has addressed the pandemic with more urgency than his predecessor.
What about other US states?
Individual states are in charge of public health policy in the US. At the start of the coronavirus pandemic, most introduced restrictions on businesses and travel.
About 35 required face coverings to be worn in public places – either or outdoor – although enforcement of these mask mandates has been patchy.
With cases and deaths falling sharply in recent weeks, several states have begun easing the restrictions.
Shortly after Mr Abbott’s announcement, Mississippi Governor Tate Reeves said he would do the same in an even shorter time frame.
“Starting tomorrow, we are lifting all of our county mask mandates and businesses will be able to operate at full capacity without any state-imposed rules,” Mr Reeves said.
Health experts have warned that the pandemic was far from over and cases could pick up if curbs were lifted too soon.
President Biden – in contrast with his predecessor Mr Trump – has made fighting the virus a priority for his administration.
On Tuesday, Mr Biden said he was upbeat about reaching his goal of delivering 100 million Covid-19 vaccine doses in his first 100 days in office, but urged Americans to remain vigilant in wearing masks and observing social distancing.
“Today’s announcements are a huge step in our effort to beat this pandemic,” Biden said in a televised statement from the White House. “But I have to be honest with you. This fight is far from over.”
But the US ranks ninth in terms of deaths per 100,000 population, behind countries such as the UK and Italy
At least 90,000 more Americans are expected to have died with the virus by 1 June, an Institute for Health Metrics and Evaluation (IHME) projection says. By late May, the virus will kill around 500 Americans per day – down from approximately 2,000 now
Hospital admission rates have fallen sharply since January
The growing number of new variants, which could spark further outbreaks, remains a concern
Instacart has more than doubled its valuation in less than six months to $39 billion with a $265 million fundraising round from existing investors, as the grocery delivery company benefits from a surge in online orders during the COVID-19 pandemic.
The San Francisco start-up, whose transaction volumes surged sixfold last year as doorstep delivery boomed during lockdowns, said on Tuesday it plans to use part of the new funds to increase its corporate headcount by an estimated 50% in 2021.
The company was valued at $17.8 billion in November following the closing of a previous funding round. That same month, Reuters reported Instacart had picked Goldman Sachs Group Inc to lead its initial public offering at around a $30 billion valuation.
Its latest cash injection comes just a few months after California backed a ballot proposal that upheld the status of app-based delivery drivers as independent contractors- a major boost for the likes of Instacart and Uber Technologies Inc, which rely on people to work independently and not as employees.
The new funding round was led by Andreessen Horowitz, Sequoia Capital, D1 Capital Partners, Fidelity Management & Research Co and T. Rowe Price Associates.
The COVID-19 pandemic has reshaped the global travel landscape and U.S. no-frills carriers are pouncing.
As legacy airlines shrink to contain costs, budget carriers Spirit Airlines, Allegiant Travel and privately-owned Frontier Airlines are resuming pilot hiring and expanding networks to seize turf dominated by larger rivals.
The three airlines’ combined U.S. market share, which barely topped 10% before the pandemic, could grow by 10 percentage points this year alone, said René Armas Maes of UK-based consultancy MIDAS Aviation.
“Ultra low-cost carriers want to attack head-to-head; they believe they’re in a better position to rebuild travel demand,” he said.
Las Vegas-based Allegiant has told prospective pilots whose hiring was halted as the pandemic unfolded: “We have recalled all of our furloughed pilots and are now planning for exciting growth opportunities.”
Spirit and Frontier have posted pilot job ads and are taking delivery of Airbus A320neo jets that could open longer routes, including coast-to-coast flying traditionally controlled by legacy, or full-service, carriers.
By contrast, American Airlines has gone from hiring 100 pilots a month before the pandemic to threatening 1,850 furloughs without fresh government assistance on labor costs.
Allegiant also stands to benefit if Congress approves a third round of COVID-19 payroll relief for U.S. airlines, but “would be just fine without it,” Chief Financial Officer Greg Anderson told Reuters.
“The leading indicators suggest that there is a nice growth trajectory for Allegiant,” said Anderson, citing Google searches, indices that track changes in city populations and infection and vaccination trends from the Institute for Health Metrics and Evaluation.
He said customer surveys also show an increased preference for smaller airports and non-stop flights, cornerstones of budget carriers’ business models.
TRIAL AND ERROR
Ultra low-cost carriers, or ULCCs, offer a no-frills experience at rock-bottom fares and charge heavily for extras like bags. They wage fare wars and are pervasive in Europe’s fragmented market but have lagged in the United States.
ULCCs are a tier below carriers like Southwest Airlines, which pioneered the low-cost concept in the 1970s and has grown to become the leading domestic airline. It provides free beverages and checked bags but keeps costs low in part by flying a single fleet-type of Boeing 737s.
U.S. mainline legacy carriers American, Delta Air Lines and United Airlines have diverse fleets that include expensive wide-body jets geared for the kind of business and international travel that has suffered most in the pandemic.
American’s unit costs excluding fuel, a key metric of efficiency, were $0.18 per available mile in 2020, more than double that of budget rivals like Allegiant, according to data compiled by financial services firm Raymond James.
This means Allegiant, which primarily uses second-hand planes and only flies on peak travel days like weekends, can more easily profit on discount fares.
And whereas legacy carriers use a hub-and-spoke network that shuttles people through costly big-city airports, the ULCC business model is based on point-to-point travel to smaller airports where they outsource much of their infrastructure.
Allegiant’s fixed costs account for just around a quarter of its total.
That flexibility helps budget carriers open new routes on a trial-and-error basis. During the pandemic, for example, they have pivoted toward beach and mountain destinations.
“Then if the route is not performing, they won’t hesitate to shut it down,” said George Dimitroff of consultants Ascend by Cirium.
But there are risks.
American, United and Delta have also shifted flights during the pandemic to pick up leisure demand and their market power and geographical reach remain formidable.
Competing with them can lure upstart airlines into relaxing cost discipline – a move described as a “path to hell” by budget airlines entrepreneur Bill Franke, who championed the ULCC model.
Together the three large airlines control around 60% of domestic travel and could chase away rivals on smaller routes if they choose, industry critics said.
But they are more burdened by debt than the ULCCs and continue to burn through millions of dollars every day, hampering their ability to grow, the critics said.
Beyond low fares, experts said the pandemic has given budget carriers a fresh argument for previously wary customers.
Traditional airline perks like catering services have lost their luster in an era of masks, and budget airplanes feature the same hospital-grade aircraft filtration systems as others.
And they could benefit from more cost-conscious small and medium sized businesses changing travel policies to favor lower-cost airlines, albeit constrained by their more limited flying through large hubs.
“More price-sensitive travel will be the new normal for the next couple of years at least,” Armas Maes said.
Even so, today’s outsiders will face a competitive cycle.
After the last downturn, low-cost carrier JetBlue Airways grabbed market share from American on the U.S. east coast. Now it is grappling with competition from ULCCs and is teaming up with its old rival.
MADRID (Reuters) – Inditex staff in Spain say they are being forced out as the owner of fast-fashion brand Zara rolls out its plan to shut up to 1,200 stores worldwide, despite a company agreement with Spanish unions to project jobs.
The world’s biggest clothes retailer is closing smaller outlets while expanding flagship stores and the Spanish closures are the first of up to 700 expected this year in Europe, as well as 100 in the Americas and 400 elsewhere in the world.
Under a December agreement, seen by Reuters, with two Spanish unions, Inditex aims to provide all affected staff with new vacancies matching their old contracts and seniority within 25 km (16 miles) of where they used to work.
But unions and staff say it’s not going to plan.
In an internal report seen by Reuters, the UGT union analysed vacancies offered by Inditex and found 40% of the new positions were outside the province where the worker in question had worked, in some cases on the other side of the country.
The report said one in four workers offered new positions in Spain so far had quit.
“If workers who used to work 40 hours are offered 12-hour jobs, hours away, that’s not preserving employment,” said Cristina Estevez, UGT’s retail representative.
UGT, the second-biggest Spanish union within Inditex, signed the deal with the company along with the leading syndicate CCOO.
An Inditex spokesman said in an email to Reuters that it was complying with the union agreement and that relocations respected, “all its principles, wording and spirit, which is to prioritise the maintenance of jobs”.
The company was offering more than one vacancy for every job lost, the spokesman said, pointing out that 75% of workers had been successfully relocated so far.
MORE NEW JOBS
Clothing sales at Inditex and rivals such as H&M and Next recovered towards the end of last year from record lows when the COVID-19 pandemic first struck, boosted by online shopping and a quick rebound in China.
But the retail industry’s recovery in the western world has been frustrated by lockdowns extending well into 2021 and slow vaccine rollouts in some countries.Slideshow ( 3 images )
While most retail jobs lost in the first quarter of 2020 in the United States and Europe have been reinstated, the number of people employed in the sector remains well below pre-pandemic levels, according to data from Eikon Datastream and Eurostat.
In the United States, the shortfall is about 400,000 jobs while in Europe it’s nearly 350,000, the data showed.
Inditex said in June it would close 1,000 to 1,200 of its smaller, less profitable stores worldwide by the end of 2021. The pandemic tipped the company into a loss for the first time though Inditex attributed the closures to strong results from its integrated online and in-store model.
So far, Inditex has announced the closure of 114 stores in Spain affecting 986 jobs, CCOO said, with unions expecting a further 186 outlets to shut this year.
The number of vacancies offered so far is equivalent to 126% of jobs affected, the Inditex spokesman said.
‘LAUGHING AT US’
Six Spanish unions contacted by Reuters, including CCOO and UGT, said the high proportion of offers in different regions for fewer hours and more evenings and weekends was beyond the scope of what they had expected.
Some workers said the options offered to them would have meant cutting their weekly hours from 30 to 40 to below 20, with shifts moved to evenings and weekends, as shown by documents seen by Reuters listing the new vacancies.
“They’re basically inviting us to leave,” said one Zara worker in Guadalajara near the capital Madrid, who spoke on condition of anonymity for fear of repercussions in her career.
“The vacancies they offered in our store were eight or 16 hours weekly, always on weekends, or even just Sundays, when almost all the staff used to do 20, 40 hours weekly. They’re laughing at us,” she said.
The spokesman for Inditex said it had offered workers in Guadalajara the best alternatives available in the vicinity.
Under the December agreement, Inditex committed to reimburse transport costs up to 90 euros a month when relocation within 25 km was impossible, and cover relocation expenses if staff had to move house. Otherwise, workers could opt to leave, receiving compensation proportionate to their years with the firm.
Some workers in Barcelona were offered vacancies in Santander, a seven-hour drive away, the UGT union said. The CGT union in Madrid, said one worker was offered a position in Melilla, an autonomous Spanish city in North Africa.
“These are disguised layoffs,” CGT secretary for Zara in Madrid, Anibal Maestro, said. “When you propose such moves, you’re forcing the workers to quit.”
The Inditex spokesman said its agreement with the unions accounted for the fact that vacancies further away may be attractive to some staff, citing examples of five people who had asked to relocate long distances.
The fashion retailer, the world’s largest by revenue, expanded its global store network by a net 1,942 stores from 2012 to hit a peak of 7,199. But only 450 stores will open between 2020 and 2022, the company has said, as it seeks to boost the proportion of its online sales to 25% from 14%.
Elsewhere in Europe, negotiations over closures are still underway, according to UNI Global Union, which is overseeing the process with national unions across the region.
In a videoconference with the company’s European Works Council (EWC) in June, Inditex assured them that staff affected by closures would all receive alternative job offers.
“Both parties agree that safeguarding work, training staff in order to tackle the new functions derived from digital transformation and labour organisation … constitute the keys in the work plan,” Inditex and the EWC said in a joint statement on Dec. 21.
The Inditex spokesman said maintaining employment for existing workers was a priority wherever there were closures.
But workers on the ground remain fearful, especially those associated with unions that did not sign the agreement.
“That agreement was a blank cheque for the firm,” said Zara worker and AST union member Jose Angel Parejo, adding that he feared his 13 years at the company would end when his store in central Madrid closes this month. “They committed to an equivalence in quantity of vacancies, but not quality.”
(Reuters) – Twitter said it would apply warnings to tweets that contain misleading information about COVID-19 vaccines and implement a strike system of enforcement that could see users permanently banned for repeat violations.
The social media network started promoting public health information before COVID-19 was declared a global pandemic. It also aimed to remove demonstrably false or misleading content about the virus that had the highest risk of causing harm.
Since introducing its COVID-19 guidance, it said it had removed more than 8,400 tweets and challenged 11.5 million accounts.
With more and more people now looking for authoritative public health information about vaccines as programs were rolled out across the world, it said it would expand the guidance.
Katy Minshall, Twitter’s head of UK public policy, said the company recognised the role it played in giving people credible public health information.
“We continue to work with health authorities around the world – including (Britain’s health service) the NHS – to ensure high visibility access to trusted and accurate public health information on our service, including about COVID-19 vaccines,” she told Reuters.
“Today we will begin applying labels to tweets that may contain misleading information about COVID-19 vaccines, in addition to our continued efforts to remove the most harmful COVID-19 misleading information from the service.”
She said the approach built on existing work to guard against false claims about the safety and effectiveness of inoculation.
Vaccines are at the centre of government plans to fight the pandemic that has caused more than 2.6 million deaths to date.
There have been concerns, however, that public distrust of the shots could jeopardize the success of vaccination programs.
Surveys and data show varying levels of willingness to receive a shot according to country and demographic group.
In Britain, where more than a third of adults have received at least one vaccine shot, authorities are working to overcome hesitancy among some ethnic groups.