It’s knives out for US retailers, with Walgreens being the latest to cut prices on thousands of its products to stay competitive and adapt to changing consumer spending habits. 

Grocery Store Slashes

Earlier this month, just two days before a less-than-stellar first-quarter earnings report, Target began cutting prices on 5,000 grocery store items including milk, diapers, drinks, fruit, and cleaning products. The move came as customers were spending less — Q1 sales fell 3.7% year-over-year — and possibly finding better deals at Walmart, which started lowering prices to pre-pandemic levels in March. 

In the past week, Amazon said it was slashing grocery prices at its Fresh chain by up to 30% to lure back inflation-weary customers. Aldi has begun reducing prices on more than 250 items, which the grocery chain says will pass along $100 million in savings to customers.

And now, Walgreens — which has seen its share price drop nearly 45% this year — is following suit:

• On Wednesday, Walgreens lowered prices on more than 1,500 items including vitamins, chips, lotion, and Squishmallow plushies. In a release, the company’s chief customer officer, Tracey Brown, said, “Walgreens understands our customers are under financial strain and struggle to purchase everyday essentials.”
• Walgreens actually reported solid Q1 revenue, increasing 6.3% from a year ago to roughly $37 billion and beating Wall Street’s expectations. However, it also dropped its guidance to reflect the “challenging retail environment in the US.” Plus, it took a major writedown of nearly $6 billion on its VillageMD clinics.

An analysis from The Wall Street Journal found that in addition to eating out less and spending less at the grocery store, many price-sensitive consumers are switching from brand-name to in-house items. Instead of reaching for Kellogg’s Rice Krispies, they might opt for Crispy Rice from Shop Rite’s Bowl & Basket line. Huge difference.

Let’s Get Some Shoes: As grocery chains slash prices to stay competitive, higher-end retailers have somehow managed to keep their knives sheathed. On Wednesday, Dick’s Sporting Goods reported 5.3% sales growth in the first quarter — more than twice what Wall Street expected — as customers spent more on sneakers and athletic gear. Abercrombie & Fitch reported that revenue increased for the sixth consecutive quarter and raised its full-year outlook, sending its share price up roughly 30% Wednesday. If consumers keep spending like this on clothes in this economy, we’ll eat our hat.

Workers of the world aren’t exactly uniting, but they do seem to be stirring, at least in techland.

South Korean phone and chip giant Samsung is facing a strike action from the National Samsung Electronics Union, its biggest union representing roughly 28,000 workers. The union announced Wednesday that it will stage a one-day walkout on June 7 with workers using their paid annual leave en masse, with potentially more strikes to come without management concessions. It’s an uncomfortable first for Samsung, and it shows that the trend of rank-and-file workers for tech giants mobilizing is going global.

A Global Sensation

Unionization is a fairly new chapter in Samsung’s history — Samsung’s leadership maintained a strict anti-union stance until 2020 when executive chairman Jay Y. Lee came under massive public scrutiny amid a succession scandal and promised to reverse Samsung’s long-held anti-union policy. “From now on, I will make sure that Samsung is not criticized for ‘union-free management,’” Lee said at the time.

Smash-cut to Wednesday, when the union live-streamed its accusation of Samsung’s “union repression,” per Reuters’ reporting. But this isn’t the first taste of union action that Samsung has faced. In 2021, workers for its Samsung Display division (the part of the company that makes screens) staged a 90-minute walkout, per The Korea Times. However, this is the first honest-to-goodness strike action it has experienced that brings the potential for escalation. And Samsung isn’t the only tech giant with a workforce preparing for its first strike:

• Earlier this month, unionized workers at an Apple store in Maryland voted to authorize strike action after what it said was “over a year of negotiations” with Apple reached a sticking point.
• Tesla, which also has a history of being anti-union, is readying itself for a US unionization drive from the United Auto Workers union. Meanwhile, it’s still in a drawn-out battle with striking Scandinavian union workers.

Not Great, Not Terrible: As news of the Samsung strike took its shares down about 4%, another bit of bad news blew in. South Korea’s Nuclear Safety and Security Commission announced it’s launching a probe into Samsung after two of its workers at a semiconductor plant had to be hospitalized for radiation exposure. Samsung’s PR team had better be ready for some fallout.

Unlike oil itself, which separates over time, the oil industry is coming together. 

On Wednesday, ConocoPhillips agreed to acquire rival Marathon Oil in an all-stock deal with an enterprise value of $22.5 billion, including $5.4 billion in debt. It’s just the latest in a long wave of mergers and acquisitions in the oil industry.

M&A FOMO

In the past year, the oil industry has experienced massive consolidation. But while major players like Exxon, Chevron, and Diamondback Energy completed a shopping spree totaling more than $150 billion in acquisitions, ConocoPhillips has largely been left out to dry. According to sources who spoke with The Wall Street Journal, the oil firm swung and missed on a handful of acquisition targets in recent months, including Endeavor, which eventually sold to Diamondback, and CrownRock, which sold to Occidental.

But now ConocoPhillips has landed a decent-sized fish — one that brings it increased operations both outside of and within the highly desirable Permian Basin oil fields of Western Texas:

• In addition to shale production in the Permian Basin, Marathon will offer ConocoPhillips increased access to the Bakken oilfield in North Dakota, Texas’s Eagle Ford, as well as offshore assets in Equatorial Guinea.
• ConocoPhillips says the acquisition will add total resources equivalent to 2 billion barrels to its inventory; in the first quarter, Marathon says it produced an average of 326,000 barrels per day.

Balancing Act: ConocoPhillips has been public about its desire to expand. In a CNBC interview in March, CEO Ryan Lance said “Our industry needs to consolidate. There’s too many players. Scale matters, diversity matters in the business.” Unfortunately for Lance, not everyone agrees. Though the industry mostly avoided antitrust scrutiny in its recent M&A binge, the tides may be beginning to turn. The FTC took a hard look at Exxon’s acquisition of Pioneer, signaling further interest in the industry’s consolidation.