WEBVTT - Examining Possible Escalation Between Israel and Iran 0:00:02.960 --> 0:00:10.720 Bloomberg Audio Studios, podcasts, radio news. This is Bloomberg Business 0:00:10.760 --> 0:00:14.000 Wait inside from the reporters and editors who bring you 0:00:14.040 --> 0:00:18.360 America's most trusted business magazine, plus global business, finance and 0:00:18.440 --> 0:00:22.880 tech news. The Bloomberg Business Week podcast with Carol Messer 0:00:23.040 --> 0:00:27.320 and Tim Stenebek from Bloomberg Radio Well. 0:00:27.360 --> 0:00:29.800 Israel said eight of its soldiers were killed in classes 0:00:29.840 --> 0:00:33.920 with Hesbolah in southern Lebanon, first casualties it suffered in 0:00:33.960 --> 0:00:37.479 an expanding ground incursion amid fears of a spiraling conflict 0:00:37.479 --> 0:00:40.760 with Around meantime, Benjamin net and Yahoo vowed to retaliate 0:00:40.800 --> 0:00:43.760 against Iran after it fired about two hundred ballistic missiles 0:00:43.800 --> 0:00:47.319 at Israel, a major escalation that world powers fear could 0:00:47.360 --> 0:00:50.360 spiral into a Middle East wide war or some of 0:00:50.360 --> 0:00:53.280 the conversations we had yesterday tim a World War three. 0:00:53.360 --> 0:00:55.680 It's not just that. Televised comments made during a visit 0:00:55.680 --> 0:00:58.960 to Doha, Iran's president said if Israel takes further action 0:00:59.160 --> 0:01:03.520 against Iran, the Islamic Republic will quote give stronger response, 0:01:03.840 --> 0:01:06.520 and President Biden says G seven nations are discussing sanctions 0:01:06.560 --> 0:01:09.760 against Iran in response to the latest attack against Israel. 0:01:09.760 --> 0:01:11.360 All right, so let's get to it. Let's get more 0:01:11.360 --> 0:01:14.520 with retired Lieutenant General Michael grew In. He is Geopolitical 0:01:14.520 --> 0:01:18.200 Intelligence Group member an advisory board member at Academy Securities, 0:01:18.280 --> 0:01:21.679 joining us from Virginia. General grew In, great to have 0:01:21.720 --> 0:01:24.600 you here with Tim and myself on BusinessWeek. Are we 0:01:25.040 --> 0:01:28.160 likely to see more back and forth between Israel and 0:01:28.200 --> 0:01:29.440 Iran for some time? 0:01:31.520 --> 0:01:32.720 Yeah, inevitably. 0:01:32.760 --> 0:01:35.720 I think we've we've been on this cycle since October 0:01:35.760 --> 0:01:39.759 seventh last year, and I think where, you know. 0:01:39.880 --> 0:01:43.200 We look at the the the who has the balance 0:01:43.240 --> 0:01:46.120 of escalation, who who can escalate this? And it seems 0:01:46.160 --> 0:01:50.000 like every time that the Israelis achieve an objective that 0:01:50.040 --> 0:01:55.320 they that they've established, uh, the Iranians and or their proxies, uh, 0:01:55.400 --> 0:01:58.080 you know will escalate once again, and they'll and they'll 0:01:58.200 --> 0:02:00.920 they'll pull another trigger, and so you know, we're in 0:02:01.000 --> 0:02:02.040 this do loop of. 0:02:02.120 --> 0:02:06.280 Continuous trigger and response, trigger and response. Of course, now 0:02:06.360 --> 0:02:09.440 it's really it's really become serious when we when we 0:02:09.480 --> 0:02:12.360 start talking about it in Israeli ground invasion and again, 0:02:12.520 --> 0:02:15.600 as as you just said, you know, eight Israeli soldiers 0:02:15.880 --> 0:02:18.839 already killed in the in the action once you're on 0:02:18.880 --> 0:02:21.840 the ground, especially in the broken terrain of southern Lebanon, 0:02:22.800 --> 0:02:25.720 it becomes extraordinarily dangerous and extraordinarily difficult. 0:02:26.240 --> 0:02:28.320 I do wonder one of my concerns, one of our 0:02:28.360 --> 0:02:32.080 concerns Bloomberg Opinion writing about it, our Andreas Kluth about 0:02:32.200 --> 0:02:36.160 you know, when does what Israel is doing become offensive 0:02:36.280 --> 0:02:40.240 versus defensive, and should then the US and other global 0:02:40.280 --> 0:02:43.640 allies rethink its support of Israel. 0:02:45.680 --> 0:02:47.799 So thanks, thanks for the question. You know, it's a 0:02:47.840 --> 0:02:50.720 very it's a very complex situation of course. 0:02:51.360 --> 0:02:51.440 Uh. 0:02:52.160 --> 0:02:54.880 You know, the state of Israel, you know, has suffered 0:02:56.200 --> 0:02:59.359 hundreds of rockets today, you know, for you know, for 0:02:59.720 --> 0:03:03.440 many many weeks here as as Hesbola has made the 0:03:03.480 --> 0:03:06.880 northern part of the country uninhabitable. So you know, even 0:03:07.160 --> 0:03:10.000 you know, from a humanity aspect and from a law 0:03:10.040 --> 0:03:13.359 of armed conflict aspect, you know, Israel has a right 0:03:13.400 --> 0:03:18.360 to defend themselves beyond their borders in this space. That said, 0:03:19.000 --> 0:03:21.320 you know, this is not the first time that there's 0:03:21.360 --> 0:03:25.160 been an incursion into southern Lebanon. And and in fact, 0:03:25.200 --> 0:03:28.120 I mean you think about you know, going back years ago, 0:03:28.960 --> 0:03:31.160 you know, even nineteen eighty three, when the you know, 0:03:31.160 --> 0:03:34.800 when the US Marine barracks was bombed in Beirut. There 0:03:34.840 --> 0:03:38.680 has been a long history of tit for tat across 0:03:38.720 --> 0:03:43.720 that border. The Israelis and the UN have articulated the 0:03:43.800 --> 0:03:46.880 La Tani River as the border. That's about twenty miles 0:03:47.320 --> 0:03:50.000 north of the current border of Israel, and that's twenty 0:03:50.040 --> 0:03:53.600 miles of really rough terrain, really dangerous terrain, and really 0:03:53.600 --> 0:03:54.960 difficult terrain to operate on. 0:03:56.080 --> 0:03:58.600 I want to go back to this idea of seeing 0:03:58.600 --> 0:04:01.640 an end to this conflict. And I'm wondering, given that 0:04:01.680 --> 0:04:04.120 there is this tit for tat, this idea of retaliation, 0:04:04.640 --> 0:04:06.520 after one side makes one move and then the other 0:04:06.560 --> 0:04:09.640 side retaliates, how do you see this conflict ending at 0:04:09.720 --> 0:04:11.560 least this iteration of the conflict. 0:04:12.960 --> 0:04:15.800 So so this iteration of the conflict, I think the 0:04:16.000 --> 0:04:19.480 you know, the principal parties are you know, of of 0:04:19.480 --> 0:04:22.600 of a hard heart and a hard stance here uh, 0:04:22.839 --> 0:04:26.000 Presidenttnyahu are Prime Minister of Netnah, who of course you know, 0:04:26.120 --> 0:04:29.200 has has has talked about what he's willing to do 0:04:29.640 --> 0:04:32.200 and what he wants to do to achieve the safety 0:04:32.279 --> 0:04:35.640 of of Israel and Uh and and there's not a 0:04:35.680 --> 0:04:38.600 lot of wavering on the Israeli side, on the on 0:04:38.680 --> 0:04:41.040 the Hesbula side, or on the Iranian side. 0:04:41.480 --> 0:04:41.640 Uh. 0:04:41.640 --> 0:04:44.960 You know, even with uh, you know, the loss of 0:04:45.240 --> 0:04:49.400 many many of their Hesbela commanders and their IRGC commanders, 0:04:49.440 --> 0:04:51.920 we should always remember that those you know, those commanders 0:04:51.920 --> 0:04:54.880 are on the ground with hesblah uh in in Lebanon. 0:04:56.480 --> 0:05:00.000 You know, even with a really uh not very effect 0:05:00.160 --> 0:05:04.159 of SORTI of missiles against Israel the other day, you know, 0:05:04.200 --> 0:05:09.720 the Iranians are still calling for retaliation. So they are 0:05:09.760 --> 0:05:13.080 stuck on a wheel here of and the maybe the 0:05:13.120 --> 0:05:17.120 only thing that can start to bring some at least 0:05:17.160 --> 0:05:21.320 a place to talk outside of for tat exchanges is 0:05:21.560 --> 0:05:24.800 a relationship with other countries in the region. And here 0:05:24.839 --> 0:05:28.640 I'm talking about Jordan and Saudi Arabia and the Emirates Egypt, Like, 0:05:28.880 --> 0:05:33.200 is there a way to get back to the table 0:05:33.560 --> 0:05:36.799 at least stop firing missiles while we're you know, while 0:05:36.800 --> 0:05:39.440 we're trying to figure out what a long term solution 0:05:39.520 --> 0:05:39.880 looks like. 0:05:40.120 --> 0:05:42.200 Is a long term solution does that include a two 0:05:42.200 --> 0:05:47.080 state a scenario in the end, and just got about 0:05:47.080 --> 0:05:47.880 thirty seconds. 0:05:47.680 --> 0:05:53.839 Left here, Well, clearly, you know, Lebanon is a captive state. 0:05:54.080 --> 0:05:57.160 You know, it's been captured by by Iran and so 0:05:57.760 --> 0:06:00.320 and then and then if you look over to god Asa, 0:06:00.440 --> 0:06:02.479 you know kind of when when we talk about a 0:06:02.520 --> 0:06:05.760 two state solution, uh you know, there's there's you know, 0:06:05.800 --> 0:06:08.960 even the Egyptians don't want to govern Gaza. You know, 0:06:09.080 --> 0:06:12.800 it is this in its current state, it is completely ungovernable. 0:06:13.320 --> 0:06:17.800 Uh you until Sinwar Sinwak goes and he's not going 0:06:17.880 --> 0:06:20.840 to go uhh you know, with his with his boots on, 0:06:21.480 --> 0:06:26.480 so like it is a you know until until uh 0:06:26.960 --> 0:06:31.800 we it's some resolution where this tip for tent is 0:06:31.800 --> 0:06:34.360 going to continue. All right, Yeah, there's not an offer. 0:06:34.680 --> 0:06:36.400 All right, got it? Thank you so much, and so 0:06:36.480 --> 0:06:39.600 glad we could reconnect with you. Retired Lieutenant General Michael 0:06:39.680 --> 0:06:42.599 grew and Geopolitical Intelligence Group member and Advisory board member 0:06:42.600 --> 0:06:43.800 at Academy Security. 0:06:44.680 --> 0:06:48.560 This is Bloomberg Business Week with Karl Messer and Tim 0:06:48.600 --> 0:06:51.600 Stenebeck on Bloomberg Radio and Television. 0:06:52.560 --> 0:06:54.760 All right, everybody you are listening and watching Bloomberg Business 0:06:54.760 --> 0:06:57.040 We Carol Masser along with Tim Stanevik. A lot going on. 0:06:57.080 --> 0:06:59.120 We do want to mention a headline that crossed Microsoft 0:06:59.200 --> 0:07:02.599 investing about seven hundred and fifty million dollars in open 0:07:02.680 --> 0:07:08.919 AI's latest fund raise, if you will, are fund raising round, 0:07:09.480 --> 0:07:12.320 which is a I gotta just say, this raise just 0:07:12.360 --> 0:07:13.880 has kind of blown me away. How much. 0:07:14.000 --> 0:07:14.520 Yeah. 0:07:14.720 --> 0:07:17.840 Microsoft has already invested thirteen billion dollars in the startup. 0:07:17.960 --> 0:07:21.840 Nvidia another name in there. Listen to this, Carol. Open 0:07:21.840 --> 0:07:24.440 ai completed a deal to raise six point six billion 0:07:24.480 --> 0:07:27.120 dollars in new funding. That new valuation at one hundred 0:07:27.120 --> 0:07:28.720 and fifty seven billion dollars. 0:07:28.800 --> 0:07:31.240 That's quite a fund raise, if you will. 0:07:31.320 --> 0:07:33.080 Yeah, the question is where does it go from here? 0:07:33.200 --> 0:07:33.440 Yeah. 0:07:33.480 --> 0:07:35.360 It may cost a lot of money to run this company. 0:07:35.640 --> 0:07:37.800 I can you look something up on chat GPT that 0:07:37.840 --> 0:07:39.200 costs money, uses a lot of energy. 0:07:39.320 --> 0:07:41.120 We talked about this with our Max Chafkin, right. The 0:07:41.200 --> 0:07:43.000 also the idea that it costs a lot of money 0:07:43.040 --> 0:07:44.920 to run it, so they're still trying to figure out 0:07:44.960 --> 0:07:47.640 I guess the way to profitability it is. By the way, 0:07:47.680 --> 0:07:50.000 the deal, one of the largest ever private investments, makes 0:07:50.040 --> 0:07:53.120 open ai one of the three largest venture backed startups, 0:07:53.160 --> 0:07:57.080 alongside Elon Musk's SpaceX and TikTok owner Byte Death. That's 0:07:57.080 --> 0:07:59.160 a creaty People familiar with the matter, who asked not 0:07:59.240 --> 0:08:00.840 to be identified, are the. 0:08:00.920 --> 0:08:05.840 Names Thrive Capital, Coastala Ventures, Altimeter Capital, Fidelity Management and Research, 0:08:06.200 --> 0:08:09.440 soft Bank, and the Abu Dhabi based tech investment firm 0:08:09.520 --> 0:08:10.840 mgx I anticipated. 0:08:10.880 --> 0:08:12.680 I think what's also staggering is that it's been a 0:08:12.680 --> 0:08:14.800 turbulent year for open AI, to say the least, So 0:08:14.840 --> 0:08:17.480 it's interesting to see this amount of money coming in 0:08:18.040 --> 0:08:20.640 to the company. I got to say, AI certainly one 0:08:20.640 --> 0:08:22.080 of the trends that we've been all over for the 0:08:22.120 --> 0:08:24.360 last two year and a half, and so is the 0:08:24.440 --> 0:08:26.560 new diet drugs that are out there. 0:08:26.640 --> 0:08:29.280 Yeah, because ozempic, well, we're not scared anymore. That's what 0:08:29.320 --> 0:08:32.199 food industry executives seem to be saying right now. After 0:08:32.240 --> 0:08:36.080 initial concerns about what ozempic and other GLP one's carol 0:08:36.360 --> 0:08:38.600 would do for their products. If people were taking these drugs, 0:08:38.679 --> 0:08:40.360 are they still going to buy as much food as 0:08:40.360 --> 0:08:41.240 they were buying before. 0:08:41.320 --> 0:08:43.080 Well, it turns out big food they're kind of warming 0:08:43.160 --> 0:08:44.800 up to the GLP one drugs. Let's get to it 0:08:44.800 --> 0:08:47.440 with Bloomberg News consumer reporter Dina Shankers. She's with us 0:08:47.480 --> 0:08:50.800 in New York City. Great read data just remind us 0:08:50.800 --> 0:08:54.080 First up, that initial terror. We used to talk about it, right, 0:08:54.160 --> 0:08:56.640 these new drugs were out there and all the food companies, 0:08:57.000 --> 0:08:59.440 the package food companies were like, oh my god, what's 0:08:59.480 --> 0:09:03.080 going to happen to all our business businesses? Remind us 0:09:03.120 --> 0:09:07.080 to kind of about that backdrop before we get to 0:09:07.080 --> 0:09:07.839 where we are today. 0:09:08.760 --> 0:09:11.199 Sure, so I can tell you for me. It started 0:09:11.320 --> 0:09:14.920 last fall when I was interviewing Steve Kaylene, the CEO 0:09:14.960 --> 0:09:18.320 of Kelenova, the snack company, and I asked him like, well, 0:09:18.480 --> 0:09:21.600 what are you thinking about these GLP one drugs? And 0:09:22.400 --> 0:09:25.360 they were like, listen, we're watching it. We're not sitting here, 0:09:25.600 --> 0:09:29.200 we're not being you know, just complacent on this, but 0:09:29.320 --> 0:09:33.319 we're watching it, and well we're prepared to mitigate any impacts. 0:09:34.120 --> 0:09:37.320 We then saw less than a year ago, earlier this year, 0:09:37.800 --> 0:09:42.000 that the CEO of Novo Nordisk, which makes Ozembic and 0:09:42.080 --> 0:09:46.280 we Goobi, that they told us that they were getting 0:09:46.280 --> 0:09:49.319 phone calls from CEOs of food companies that were scared. 0:09:49.360 --> 0:09:52.240 They didn't know what was going on, and there was 0:09:52.320 --> 0:09:54.440 this big question that was coming up. We saw it 0:09:54.480 --> 0:09:56.760 in news headlines. It was just like a major topic 0:09:56.800 --> 0:10:01.520 of conversation was ozempic going to to finally deal a 0:10:01.559 --> 0:10:04.400 blow to big food that any diet trend of the 0:10:04.440 --> 0:10:06.319 past was simply unable to do. 0:10:06.600 --> 0:10:09.360 And just in case anybody forgot, Kelenova makes those good 0:10:09.400 --> 0:10:12.719 things like cheese it and pop tarts and all those 0:10:12.720 --> 0:10:15.120 good kringles, exactly right. 0:10:15.280 --> 0:10:16.760 Things that maybe you would need as much of if 0:10:16.760 --> 0:10:19.520 you're taking those perhaps, But Dina, you're also here to 0:10:19.559 --> 0:10:22.240 tell us that big food, well they're going to be 0:10:22.400 --> 0:10:24.040 just fine. How have they adapted? 0:10:25.040 --> 0:10:28.559 Well, so that's what they're saying. Anyway, what we found 0:10:28.880 --> 0:10:32.960 is that some companies are basically like, oh, well, we're like, 0:10:33.200 --> 0:10:38.280 our portfolio is perfect for GLP one. Of course, so 0:10:38.679 --> 0:10:42.000 we saw Nestley roll out an entire new line called 0:10:42.040 --> 0:10:47.680 Vital pursuit of basically like single frozen, single served meals 0:10:47.760 --> 0:10:50.880 that are high protein, they have fiber, they have the 0:10:50.960 --> 0:10:53.840 nutrients that people are looking for when they're on these 0:10:53.920 --> 0:10:56.880 drugs or often when they're not on these drugs. And 0:10:57.000 --> 0:11:00.920 so then we also heard other companies like Campbell, Soup 0:11:01.000 --> 0:11:05.480 and Anne say in public presentations that they had foods 0:11:05.520 --> 0:11:08.960 that were perfect for this cohort. And we spoke with Connagra, 0:11:09.120 --> 0:11:11.760 which has spoken a little bit about this before publicly, 0:11:11.800 --> 0:11:13.880 and we had a conversation with them asking them what 0:11:13.920 --> 0:11:17.320 they've seen, and they said they're seeing it. They're seeing 0:11:17.320 --> 0:11:21.280 a bump in their frozen single served meals and it's 0:11:21.320 --> 0:11:24.920 small but measurable, and it's certainly something that they're going 0:11:25.000 --> 0:11:27.680 to keep an eye out to see how it changes. 0:11:27.720 --> 0:11:29.600 All right, So what does the investment community say about 0:11:29.640 --> 0:11:32.040 all of this. They're like, great new revenue stream, or 0:11:32.080 --> 0:11:33.800 they're like, wait, the jury is still out on this. 0:11:34.840 --> 0:11:37.040 So most of the most of the people that I've 0:11:37.040 --> 0:11:41.239 spoken to, most of the analysts, experts, et cetera, were like, yeah, 0:11:41.240 --> 0:11:45.000 there's opportunity here for some of these companies. And one 0:11:46.080 --> 0:11:49.120 stressed his name is Bobby Gibbs. He's a partner at 0:11:49.160 --> 0:11:51.720 Oliver Wyman, and he was stressing just that like, even 0:11:51.760 --> 0:11:53.880 if you're not on a GLP one drug, maybe you 0:11:53.880 --> 0:11:55.800 were and you got off, or maybe you never were, 0:11:55.840 --> 0:11:59.120 but you really are just health conscious. This is a 0:11:59.200 --> 0:12:03.559 growing part of the of the world of American consumers 0:12:03.559 --> 0:12:07.560 that we all want to eat better, and so making 0:12:07.640 --> 0:12:12.720 foods that serve those needs is a growing opportunity. One uh, 0:12:13.600 --> 0:12:16.520 one person I spoke with Nicholas Faraday over at Rabobank. 0:12:16.640 --> 0:12:20.160 He was. He was a little more skeptical, especially on 0:12:20.240 --> 0:12:23.440 snack companies, because some of the snack companies have not 0:12:23.600 --> 0:12:26.400 said so much that they, you know, are going to 0:12:26.480 --> 0:12:29.520 grow off of GLP ones, but that they don't expect 0:12:29.559 --> 0:12:34.320 any real impact. And including Kelenova, which at first was 0:12:34.320 --> 0:12:36.200 was the first company I talked to that was or 0:12:36.320 --> 0:12:39.079 I shouldn't say worried that was watching it that place 0:12:39.120 --> 0:12:43.680 of risk that they no longer see it as being 0:12:43.760 --> 0:12:46.960 something that we have to worry about. 0:12:47.120 --> 0:12:49.280 We got to run Dina. Everybody should read it. Go 0:12:49.320 --> 0:12:51.960 to Bloomberg dot com. Dina Shankar, thanks so much. This 0:12:52.080 --> 0:12:52.640 is Bloomberg. 0:12:53.600 --> 0:12:57.080 You're listening to the Bloomberg Business Week podcast. Catch us 0:12:57.160 --> 0:13:00.400 live weekday afternoons from two to five pm Eastern Listen 0:13:00.440 --> 0:13:02.599 on Apple, card Play and and Brout Auto with a 0:13:02.600 --> 0:13:05.600 Bloomberg Business app or warn't just live on YouTube. 0:13:07.000 --> 0:13:10.360 Okay, Carol, come off, no, Charlie. Is it too early 0:13:10.440 --> 0:13:12.160 for yes holiday shopping? 0:13:12.280 --> 0:13:17.960 Yes? Yes? 0:13:18.920 --> 0:13:25.600 Okay, Oh, it's gonna be seventy degrees. Here, here's why 0:13:25.679 --> 0:13:27.200 it might be too early for us to talk about 0:13:27.240 --> 0:13:30.000 it in the context of if we've done it. I'm listening, 0:13:30.320 --> 0:13:32.040 but it's still important to talk about because it's so 0:13:32.080 --> 0:13:34.160 important for the US economy, Carol. It gives us a 0:13:34.200 --> 0:13:38.360 good idea how consumers are feeling right now. Also, there's 0:13:38.400 --> 0:13:40.560 this port strike in the US. 0:13:40.600 --> 0:13:42.040 Have you heard about this, We've covered it. 0:13:42.160 --> 0:13:44.679 Yeah, thanks for kidding. Bloomberg Intelligence says it could drive 0:13:44.760 --> 0:13:47.520 up costs, slow the flow of holiday merchandise, threaten the 0:13:47.559 --> 0:13:50.280 ability for retailers to meet holiday demand. Kind of the 0:13:50.320 --> 0:13:53.280 worst timing, Yeah, for one of these strikes. Well, the 0:13:53.280 --> 0:13:56.040 management consulting from PwC has crunched the numbers. They found 0:13:56.040 --> 0:13:58.520 that even though holiday spending is predicted to surge to 0:13:58.600 --> 0:14:01.800 a record high, the increase this year, Carol, is less 0:14:01.800 --> 0:14:04.280 than the increase over the previous two years. 0:14:04.320 --> 0:14:06.880 All right, interesting, So a lot to think about when 0:14:06.880 --> 0:14:10.240 it comes to holiday spending, such an important part, as 0:14:10.280 --> 0:14:12.920 you said, tim in terms of the US economy. Alie 0:14:12.920 --> 0:14:16.080 Furman is Consumer Markets industry leader over at PwC. She 0:14:16.160 --> 0:14:18.760 joins us from Seattle. Ali, good to have you here 0:14:18.800 --> 0:14:19.560 with us. How are you? 0:14:20.640 --> 0:14:22.280 I'm great, Carol, how are you do it? 0:14:22.280 --> 0:14:25.120 Okay? Trying to assess everything that seems to be coming 0:14:25.280 --> 0:14:28.760 at us, including that strike on the East coast ports 0:14:29.240 --> 0:14:31.840 we're trying to assess. Obviously, the longer it goes on, 0:14:31.920 --> 0:14:34.880 the more problematic it becomes. How are you watching this 0:14:35.000 --> 0:14:36.440 from your perch at PwC. 0:14:37.760 --> 0:14:40.760 Yeah, that's a really important question and a question of 0:14:40.800 --> 0:14:44.080 the moment for sure. So look, we are predicting that 0:14:44.400 --> 0:14:48.120 in store holiday shopping is going to increase this year. 0:14:48.680 --> 0:14:51.720 About forty five percent of the consumers we surveyed, we 0:14:51.760 --> 0:14:54.640 surveyed over four thousand consumers, it's our tenth anniversary of 0:14:54.680 --> 0:14:58.640 doing so, said they want to shop in store. We 0:14:59.040 --> 0:15:03.880 with the porch strew can also importantly the shorter week 0:15:04.160 --> 0:15:07.880 We are losing a week between Thanksgiving and Christmas that 0:15:07.920 --> 0:15:10.120 we that we've had in the past, so that actually 0:15:10.200 --> 0:15:14.400 will shorten the shipping time of gifts that people purchase online. 0:15:14.640 --> 0:15:17.880 These factors combine, we think will increase store traffic even 0:15:18.040 --> 0:15:21.840 more than what our survey respondents had initially planned. And 0:15:22.040 --> 0:15:24.480 and your question when you when you first joined, when 0:15:24.480 --> 0:15:27.680 I first joined the broadcast about is it too early 0:15:27.920 --> 0:15:29.360 to consider holiday shopping? 0:15:29.560 --> 0:15:31.200 Yes, from from our. 0:15:31.160 --> 0:15:34.800 Perspective, you know, it seems like it, but really no, 0:15:35.920 --> 0:15:39.520 particularly you know this porch strike issue. Look, we've most 0:15:39.560 --> 0:15:42.280 of the goods for the holiday season are already here 0:15:42.880 --> 0:15:45.880 in the United States. But if you're interested in purchasing 0:15:46.040 --> 0:15:48.560 purchasing an item that's very popular that may fly off 0:15:48.600 --> 0:15:51.320 the shelf, it would behoove you as a consumer to 0:15:51.440 --> 0:15:54.640 purchase that sooner rather than later due to some of 0:15:54.640 --> 0:15:55.960 these issues that I just mentioned. 0:15:56.120 --> 0:15:58.160 You guys have a really cool port in Seattle. I 0:15:58.240 --> 0:16:02.040 must say, Carol and I were there a few months ago, 0:16:02.720 --> 0:16:05.560 driving past it on the way to that Bloomberg Green event. 0:16:05.720 --> 0:16:08.520 Yes, well right, yeah, yeah, this is pretty cool, just 0:16:08.520 --> 0:16:09.920 to reminder, like, of all the stuff that goes in 0:16:09.960 --> 0:16:11.680 and out. Yeah, take it for granted. 0:16:11.680 --> 0:16:13.160 But yeah, when you talk about the West Coast sports, 0:16:13.200 --> 0:16:15.360 we often talk about Port of La and Port of 0:16:15.400 --> 0:16:19.600 Long Beach, but Oakland, San Francisco, Seattle, big ones. Hey, 0:16:19.600 --> 0:16:22.040 talk to us a little bit about some of the 0:16:22.920 --> 0:16:25.600 some of what you found in the research at PwC 0:16:25.760 --> 0:16:30.120 that has that indicates that consumers are feeling a little 0:16:30.160 --> 0:16:32.520 stretched right now. I was struck by this in the 0:16:32.560 --> 0:16:34.800 research that we got from you, sent over by our 0:16:34.840 --> 0:16:38.760 producer Paul, that the majority of consumers right now are 0:16:38.760 --> 0:16:39.680 feeling stretched. 0:16:41.520 --> 0:16:46.520 Yeah, it's interesting, although not particularly surprising given the inflationary environment. 0:16:46.640 --> 0:16:51.360 So so we are projecting that spend consumer average spend 0:16:51.400 --> 0:16:54.800 on the holidays will increase seven percent year over year. 0:16:55.120 --> 0:16:57.880 It will actually take average spend per shopper up to 0:16:57.960 --> 0:17:01.800 a record amount of almost seven veen hundred dollars per shopper. 0:17:02.240 --> 0:17:05.680 But what's interesting about that statistic is for the previous 0:17:05.880 --> 0:17:10.119 two years we projected double digit increases and spend. So 0:17:10.160 --> 0:17:12.840 although we're hitting a record high this year, it is 0:17:12.960 --> 0:17:15.640 not increasing as much as it has in the previous 0:17:15.680 --> 0:17:19.680 two years. And the reasons why are because fifty nine 0:17:19.720 --> 0:17:22.639 percent of consumers and our survey said inflation will impact 0:17:22.640 --> 0:17:25.879 their holiday spending this year, and eighty nine percent of 0:17:26.000 --> 0:17:28.920 consumers said price of an item is going to impact 0:17:28.920 --> 0:17:31.919 their spending. Now, when you compare that to the survey 0:17:31.960 --> 0:17:34.359 we did ten years ago, as I mentioned, we've been 0:17:34.359 --> 0:17:37.600 doing this for ten years now, only seventy percent of 0:17:37.680 --> 0:17:40.880 consumers said that price was an important factor in their 0:17:41.000 --> 0:17:44.080 holiday spending decision. So you know that alone shows you 0:17:44.160 --> 0:17:47.800 that the inflationary environment is breeding more price sensitive and 0:17:47.920 --> 0:17:51.520 value oriented customers than the last two years and certainly 0:17:51.760 --> 0:17:52.800 than the last ten years. 0:17:53.240 --> 0:17:56.800 Allie to the other trends that you guys found is 0:17:56.840 --> 0:17:59.880 that consumers turning to resale items and also the use 0:18:00.119 --> 0:18:03.160 debit cards. Walk us through what your findings were. 0:18:03.920 --> 0:18:06.760 Yeah, absolutely, this is a really interesting one. So first 0:18:06.760 --> 0:18:10.240 of all, you know, the broad trend on resale items 0:18:10.359 --> 0:18:14.640 and consumers, you know, shopping vintage rental items, has been 0:18:14.680 --> 0:18:17.760 ticking up for the past few years. We do, however, 0:18:17.840 --> 0:18:20.040 think it's it's kind of reached a tipping point this 0:18:20.160 --> 0:18:24.760 year around Theday season, with forty five percent of our 0:18:24.760 --> 0:18:28.280 survey respondents saying that they plan to gift resale or 0:18:28.400 --> 0:18:32.159 used products in addition to private labeled and store brands. 0:18:32.359 --> 0:18:35.640 But that's up from thirty eight percent just last year. 0:18:36.480 --> 0:18:40.479 So you know, when you buy resale items, it's not 0:18:41.119 --> 0:18:44.560 necessarily more sustainable, but it is more economical, and that 0:18:44.640 --> 0:18:47.200 speaks to the same point about consumers being more price 0:18:47.240 --> 0:18:51.360 sensitive and value oriented. So that's particularly interesting. Your other 0:18:51.440 --> 0:18:52.879 question about payment. 0:18:52.560 --> 0:18:55.800 Methods, I thought this is actually one really curious me too, 0:18:55.920 --> 0:18:56.720 Go ahead. 0:18:56.760 --> 0:19:00.879 Super interesting. So a couple threads tied together here that 0:19:01.040 --> 0:19:04.000 I think speak to why we're seeing this kind of 0:19:04.160 --> 0:19:08.280 shift in preferred payment methods. So our survey respondents this 0:19:08.359 --> 0:19:11.920 year actually ranked paying with debit card as number one. 0:19:12.600 --> 0:19:14.960 Sixty five percent of folks plan to pay with a 0:19:14.960 --> 0:19:20.359 debit card then cash. I know, cash was thirty eight percent. 0:19:20.480 --> 0:19:23.679 Cash was second and credit card was third. When you 0:19:23.720 --> 0:19:26.560 compare that to ten years ago, cash was at the 0:19:26.560 --> 0:19:29.720 top and then credit card than debit card. You tie 0:19:29.760 --> 0:19:33.000 that stat to the fact that gen Z so these 0:19:33.000 --> 0:19:35.600 are the folks who are between the ages of twelve 0:19:35.680 --> 0:19:39.200 and twenty seven years old. Their spending power is increasing 0:19:39.359 --> 0:19:42.159 significantly year over year. I think we're projecting a thirty 0:19:42.240 --> 0:19:45.119 seven percent increase in their spend from last year to 0:19:45.160 --> 0:19:47.680 this year. You know, this is a generation that probably 0:19:47.760 --> 0:19:50.560 does not yet have a lot of credit built up 0:19:52.280 --> 0:19:54.400 or you know, and they're used to they're probably using 0:19:54.400 --> 0:19:57.880 debit cards, they're more likely to use mobile payment options, 0:19:57.480 --> 0:20:01.320 So that is probably par part of what we're seeing there. 0:20:01.680 --> 0:20:04.520 The other reason, we think has to do with the 0:20:04.560 --> 0:20:08.119 fact that credit card delinquency, you know, has been ticking 0:20:08.200 --> 0:20:11.479 up slowly for the last three years, so there's probably 0:20:11.520 --> 0:20:13.639 something to that as well. While people are you know, 0:20:13.840 --> 0:20:16.720 choosing devid and cash over credit this holiday season. 0:20:16.520 --> 0:20:18.959 Ali, you've been doing this at PwC or PBC has 0:20:18.960 --> 0:20:20.800 been doing this for ten years. I should say. So, 0:20:20.840 --> 0:20:23.960 you have good historical data here, but I got to 0:20:23.960 --> 0:20:27.040 tell you, if somebody were to survey me asking what 0:20:27.080 --> 0:20:29.040 I'd spend on the holidays this year, I would have 0:20:29.080 --> 0:20:32.480 no idea what to tell them. Carol, I haven't seen 0:20:32.520 --> 0:20:34.720 your list yet, so I don't know what you want. 0:20:35.160 --> 0:20:37.520 Do you know, track the like kind of family spending, 0:20:37.600 --> 0:20:38.840 like around the holidays and stuff? 0:20:38.920 --> 0:20:41.399 I mean in September in October? 0:20:41.480 --> 0:20:43.080 Like I mean, I don't know that I know about 0:20:43.119 --> 0:20:44.640 it ahead of time, but I do, like at. 0:20:44.520 --> 0:20:47.520 The end, I do at the end. Yeah, absolutely, look 0:20:47.520 --> 0:20:49.959 at what happened. But past performance is no indication of 0:20:50.000 --> 0:20:54.119 what you know future performance. So Ali, how has historically 0:20:54.600 --> 0:20:56.560 how has the survey done? And how do you adjust 0:20:56.680 --> 0:20:59.639 for discrepancies that you see when you survey versus when 0:20:59.680 --> 0:21:01.440 you look back on the data when you actually get 0:21:01.480 --> 0:21:02.680