TIME energy

Most Americans Are Spending Less Than $2 Per Gallon for Gas

The average household will save $750 on gas this year

The price of gas is plummeting like a bungee jumper without a rope.

A majority of Americans are paying less than $2 per gallon for gas for the first time since 2009, and the ever-cheapening fuel it helping put more money in consumers’ pockets and bolster the economy. About 6 in 10 U.S. gas stations are selling a gallon of gas for under $2, according to AAA. The average gas price has dropped for a record 120 consecutive days to less than $2.04 a gallon. That’s the cheapest average in nearly six years.

American consumers will benefit immensely this year from the drop: The Department of Energy predicted last week that the average American household would spend about $750 less for gasoline in 2015 compared with last year.

“It’s crazy,” Michael Noel, an economics professor at Texas Tech University who studies oil and gasoline prices, told the Associated Press of the fuel price drop. “But for consumers it’s very, very good.”

MORE: The Cost of Cheap Gas

Lower fuel prices will also likely help the U.S. economy grow significantly this year. The World Bank expects the American economy to grow 3.2% this year, compared with 2.4% in 2014, and some forecasts are even higher.

The downside? Oil drillers and refineries in states like Texas and North Dakota are likely to suffer from lower gas prices. Layoffs of thousands of workers have begun in recent weeks.

TIME Fast Food

McDonald’s CEO Pleads for Time to Turn Things Around

A sign stands outside of a McDonald's restaurant in San Francisco.
A sign stands outside of a McDonald's restaurant in San Francisco. Justin Sullivan—Getty Images

Many changes are to come for the fast food giant

The only good thing about 2014 for McDonald’s is that it’s finally over.

As Fortune detailed in November, this has been a terrible, horrible, no good, very bad year for the iconic fast food giant. Today the company capped it off by reporting fourth-quarter and full-year results that made 2014 the first year since 2002 in which it reported a decline in global same-store sales.

The year was historically bad for McDonald’s U.S. business in particular. Nation’s Restaurant News reported last week that the company’s slump in the U.S. market would be the first time its numbers waned compared to the year before in at least 30 years, ending the longest run ever of domestic restaurant sales growth for a single chain.

On the earnings call today CEO Don Thompson cited a litany of actions the company is taking to turn things around, including localizing its menu, allowing patrons to customize their burgers, and launching fresh marketing. He stressed that McDonald’s is “acting with a sense of urgency”—but he also made the case for giving management more time for a turnaround to kick in. He noted that McDonald’s is only six months into the 12- to 18-month plan he outlined in July.

“History tells us that these efforts will take time to resonate,” Thompson said on the call, “[and therefore] expect continued volatility in the market through most of 2015.” As he put it, “2015 will be a year of regaining momentum globally…. It will take time, especially in larger markets to notice the comprehensive changes that are under way.” He warned that the company would continue to feel pressure on sales and earnings in the first half of the year, with negative same store sales already expected for January.

Thompson certainly inherited some of the company’s issues, such as menu bloat, which had been a long time in the making when he became CEO in July 2012. Thompson had to report a slowdown in sales growth in most major markets his very first quarter on the job, but he’s now had two and a half years to change the company’s trajectory and the arrows keep pointing the wrong direction.

One promising sign, perhaps, came from a subtle shift in what McDonald’s said about food quality—a sensitive issue for the company. McDonald’s management has always maintained that its food is excellent, arguing that it was a simply a perception problem; the company, it said, just needed to do a better job educating consumers about its ingredients and how they’re prepared. But this time Mike Andres, president of the U.S. business, acknowledged on the call that “we have to make sure our quality aligns with consumers’ definition of quality moving forward. And so we’re going to be very agressive in that area.” He said that he’s building culinary talent and bringing in outside consultants to help with “menu vision.”

It was an important acknowledgement. But the company’s challenge remains daunting. It needs to simultaneously pare its menu, improve its offerings, increase its speed, and hone its message—a combination of factors that will be hard to pull off, particularly in a world where many customers are craving healthier offerings.

This article originally appeared on Fortune.com.

TIME Aviation

The TSA Seized a Record Number of Guns in 2014

TSA: How to Travel by Commercial Airflight With A Firearm
After filling out a brief disclosure form, commercial air flight travelers are allowed to transport unloaded firearms in locked, hard-sided cases as checked luggage only, as can be seen in props provided by the Transportation Security Administration (TSA) at Dulles International Airport on Wednesday, June 11, 2014, in Washington, DC. The Washington Post—Getty Images

Security agents found six per day on average

The Transportation Security Administration kept especially busy in 2014: A record high of 2,212 guns were seized from carry-on luggage, marking a 22% increase over 2013 numbers.

The TSA found an average of more than six firearms per day, the agency said Friday, and of those seized, 83% were loaded. Dallas/Fort Worth International Airport saw 120 guns seized, the most of any airport.

Passengers who try to bring firearms onto a plane in their carry-on bags can be arrested and criminally charged.

TIME Companies

Here’s Everything You Need to Know About Box

Box, Inc. Chairman, CEO & co-founder Aaron Levie, second from right, gets a high-five during opening bell ceremonies to mark the company's IPO at the New York Stock Exchange on Jan. 23, 2015.
Box, Inc. Chairman, CEO & co-founder Aaron Levie, second from right, gets a high-five during opening bell ceremonies to mark the company's IPO at the New York Stock Exchange on Jan. 23, 2015. Richard Drew—AP

The cloud storage company went public Friday

The cloud: it’s a buzzy form of computing technology as nebulous as the climactic phenomenon for which it’s named. The largest technology companies, from Google to Amazon to Microsoft, are investing in cloud-based storage services for customers. All of us dabble in the cloud every day when we log into Facebook or stream a movie on Netflix, but a lot of us don’t know exactly how it’s used.

No, this isn’t an explainer about the cloud. But it is an introduction to a hot company that’s using the cloud — and could be Wall Street’s next Silicon Valley darling.

The company is Box, and Friday is its first day of public trading. Offering individuals and businesses easy-to-use cloud-based storage and other enterprise solutions, the $1.7-billion company has caught plenty of investors’ attention.

Here’s why so many people care about Box:

What is Box?

Box is a cloud storage company. What that means is that you can upload files—documents, videos, photos, etc.—to the service from your phone, tablet or computer. Then you can access those files anywhere. Think of it as a floating hard drive that’s connected to all your devices. You can store up to 10GB on it for free, and up to 100GB for a $10 per-month fee.

Who is using Box?

Mostly businesses. About 99% of its 32-million users are employees from Fortune 500 companies. It’s aiming a lot of its services toward particular industries, including health care and retail, by creating purpose-built sharing tools.

Last year, Box acquired MedXT to let customers in medicine annotate medical images, and the company has been attracting executives from the law, retail, health care and media worlds.

Does Box have competitors?

Lots of them. Several top companies are offering cloud-based storage, with products like Amazon Web Services, Google Drive, Microsoft’s OneDrive, Apple’s iCloud, and Dropbox all competing for users. But the services all target different markets, and Box’s strength could be its popularity among large companies. About 275,000 companies use Box.

Who is Box’s CEO?

Aaron Levie, 30, is what you might expect of a Silicon Valley executive. A University of Southern California dropout, Levie founded Box out of his dorm room in 2005. He wears bright sneakers with snazzy business outfits. And he works pretty much non-stop. He also owns about 4% of the company.

So today was Box’s IPO. How is its first day trading on the New York Stock Exchange going?

Surprisingly well. Its initial public offering price of $14 was history by midday on Friday, with its stock rising as high as $24.73, up nearly 70% before cooling somewhat. Box sold 12.5 million shares at $14 a piece — above the expected $11-$13 range — raising some $175 million and giving the company a market capitalization of about $1.6 billion in the process. Box ended Friday at $23.15 a share.

Sounds like Box is doing great.

Not so fast. Its first day of trading has so far surpassed expectations, but the company has a lot of challenges. Besides sparring against well-funded competitors in the cloud storage business, Box has some financial troubles of its own. First, the company doesn’t make a profit: In fact, it’s lost a cumulative total of $483 million since its founding, partially due to sales and marketing expenses. It also delayed its IPO by nearly a year to wait for better market conditions, which made some observers nervous about the company’s future.

What’s next for Box?

According to Levie, Box is “just a couple months” into building services for particular industries, a business that’s likely to be profitable for the company. With all the new funding from its IPO, Box should also be able to more effectively invest in sales and marketing.

MONEY

Triumph of Starbucks & Fast Casual Over McDonald’s & Fast Food

Starbucks
Philip Toscano—PA Wire/Press Association Images

In the battle for consumer food and beverage dollars, upscale is winning out over cheap. Starbucks' sales, store traffic, and stock price are all booming, while McDonald's continues to flounder.

The quarterly results released at the end of the week from Starbucks and McDonald’s paint quite a picture of how America’s quick-serve consumption habits are changing. Namely, that we’re growing increasingly more likely to indulge in pricier on-the-go food and drink that’s deemed upscale, healthier, or otherwise superior in quality than we are on the stuff that’s tempting mainly just because it’s cheap.

Starbucks posted outstanding results that immediately juiced the company stock price, with store traffic up 2% (double the growth rate of the previous quarter) and same-store sales rising 5%, plus $1.6 billion added to Starbucks Cards (up 17% compared to the previous year) and a very impressive increase of 9 million sales over the same period a year prior. McDonald’s results, on the other hand, were disappointing, with same-store sales in the U.S. dipping 1.7% and quarterly profits dropping 21%.

Neither McDonald’s recent struggles nor the success of fast casual players such as Starbucks, Panera Bread, and Chipotle should come as a surprise. The core fast-casual pitch—food and drink that’s higher quality and yet only marginally more expensive than fast food—is one that consumers have been buying into for years. On the other hand, the attempts by traditional fast food giants to follow the fast-casual playbook and push quality and prices up and up haven’t gone over so well with consumers. And the costs of expanding menus and adding personalization options so that McDonald’s and its ilk can better compete with Chipotle or Starbucks have hurt profits, confused customers, and angered franchise owners.

What’s especially interesting is that all signs indicate that a broad swath of consumers have been plenty game to spend more on everyday eating ventures—and that they’ve grown increasingly likely to do so during a long stretch when the middle class has supposedly been gutted and incomes have largely been flat.

Using as a launchpoint the impending IPO of Shake Shack, Danny Meyer’s no-hormone, no-antibiotic $7 burger chain, business columnist James Surowiecki offers the long view of the fast-casual/fast food showdown in the latest issue of The New Yorker.

“For most of the fast-food industry’s history, taste was a secondary consideration,” Surowiecki writes. But in the ’80s and ’90s, the economy boomed, and the typical American employee was overworked—leaving him with disposable income and little time or interest to cook. Enjoying the finer things day-in, day-out came to be seen as the just rewards of one’s labors. The foodie movement hit the mainstream, with skyrocketing sales for products once deemed by the masses as snobby, elitist, and perhaps pretentious, including wine, craft beer, and, of course, organic foods sold by the likes of Whole Foods.

And yes, upscale coffee too. “In 1990, the idea of spending two dollars for a cup of coffee seemed absurd to most Americans,” Surowiecki explains. “Starbucks changed people’s idea of what coffee tasted like and how much enjoyment could be got from it.”

This once niche idea—that it’s a no-brainer to spend more money on superior food—is largely assumed to be the way to go by the kids born in the ’90s, the millennials, a generation that arguably loves food and restaurants more than any previous group. To a large extent, the shift to fast-casual has arisen hand in hand with the coming of age of millennials. As the Wall Street Journal pointed out last summer, the percentage of teens and 20-somethings who hit McDonald’s at least once a month has been falling for years, while the number of millennials who regularly visit Chipotle or another fast-casual restaurant steadily rises.

So no wonder McDonald’s has been having such a rough go of things lately, and no wonder company morale is down in the dumps.

TIME Companies

SkyMall Files for Bankruptcy

Time to raise a giant, novelty wine glass to the demise of the inflight retail catalog

The parent company of in-flight shopping catalog SkyMall has filed for Chapter 11 bankruptcy, citing an increased prevalence of mobile devices on planes as the primary reason for the company’s flagging sales.

Xhibit Corp. and several of its affiliates, including SkyMall, have asked a U.S. Bankruptcy Court in Phoenix to supervise a sale of their collective assets, the company announced on Friday. “We are extremely disappointed in this result and are hopeful that SkyMall and the iconic ‘SkyMall’ brand find a home to continue to operate as SkyMall has for the last 25 years,” said Scott Wiley, Xhibit’s chief financial officer and acting CEO.

“With the increased use of electronic devices on planes, fewer people browsed the SkyMall in-flight catalog,” Wiley said in a bankruptcy filing.

The SkyMall catalog has long been an option for bored or curious flight passengers who could peruse its pages to find myriad products for purchase — from clothing and electronics to more non-essential fare such as glow-in-the-dark toilet seats or Justin Bieber Dental Floss. SkyMall’s widely diverse offerings cemented the catalog’s place in popular culture, inspiring parodies as well as blogs and listicles dedicated to its more perplexing products (a lithograph simply titled “Drunk Cat”?).

In recent years, though, SkyMall fell victim to declining sales as revenue dropped from $33.7 million in 2013 to just $15.8 million for the first nine months of 2014. In a court filing, Wiley blamed the fall-off in sales on the fact that more and more passengers now spend their flights engaged with their smartphones and tablets due to technological advances, such as in-flight WiFi, as well as evolving air safety rules that provide allow passengers to keep their mobile devices on during flights. Those changes “resulted in additional competition from e-commerce retailers and additional competition for the attention of passengers, all of which further negatively impacted SkyMall’s catalog sales,” Wiley said in a filing. “These technology changes, and the costs incurred by airlines in carrying a printed SkyMall catalog, have also made the traditional in-flight SkyMall catalog increasingly unattractive to the airlines.”

Xhibit asked in a bankruptcy court filing that the asset sale be completed by April at the latest and noted that “an expeditious sale process is very important.” The company said SkyMall’s cash reserves can support business operations through that target date, but noted that it is “critical” that the process wind down within the next few months.

This article originally appeared on Fortune.com.

TIME

Watch a Dude Run Through a Life-Size Pac-Man Game in Bud Light’s Super Bowl Ad

Complete with technicolor ghosts

For its 2014 Super Bowl ad, Bud Light picked out a normal, non-actor bro from a bar and placed him in a series of bizarre situations — including playing table tennis with Arnold Schwarzenegger and riding an elevator with Don Cheadle and a llama.

This year’s scenario might be cooler.

Continuing its “Up For Whatever” campaign, the beer company built a real-life Pac-Man game for an Average Joe to run through. What unfolds is an enviable run run through a giant maze, complete with technicolor ghosts.

Gotta love Super Bowl ad season.

TIME Companies

Expedia Snaps Up Travelocity for $280 Million

The Expedia Inc. homepage and logo.
The Expedia Inc. homepage and logo. Bloomberg—Getty Images

Another travel site Orbitz is reportedly looking for a buyer as well

Two major travel sites are about to be under the same corporate umbrella.

Expedia will be purchasing rival Travelocity for $280 million in cash. The two sites have been working together since 2013, when they signed a marketing agreement allowing Travelocity access to Expedia’s supply and customer service program in exchange for Expedia powering the technology platforms for Travelocity’s websites in the US and Canada.

Travelocity is currently owned by travel technology company Sabre. Sabre also owns Sabre Airline Solutions, Sabre Travel Network, and the Sabre Hospitality Network. Expedia’s brand portfolio includes the popular Expedia.com, plus other properties including Hotels.com and Hotwire.com.

More deals could be coming in the online travel booking arena. Orbitz is said to be actively looking for a buyer.

This article originally appeared on Fortune.com.

TIME Companies

Apple Paid its New Retail Chief More Than $70 Million Last Year

Apple Inc.'s iPhone 6 and iPhone 6 Plus Go On Sale
Angela Ahrendts, senior vice president of retail and online stores at Apple Inc., right, and employees look on before opening the doors to the company's George Street store for the sales launch of the iPhone 6 and iPhone 6 Plus in Sydney on Sept. 19, 2014. Lisa Maree Williams—Bloomberg/Getty Images

Making Angela Ahrendts the company's highest-paid exec

How much does Apple care about its retail stores? Enough to pay more than $70 million to the woman heading them up, making her the highest-paid exec at the company.

Apple revealed in an SEC filing Thursday that new hire Angela Ahrendts earned $73.4 million in 2014, almost all of it in stock awards. Ahrendts, the former CEO of Burberry, joined Apple in May as the senior vice president for retail and online stores.

In the filing, Apple explained Ahrendts’ sky-high paycheck. “The recruitment of Ms. Ahrendts provided an extraordinary addition to the Company’s executive team with the experience and ability to lead both the retail and online businesses,” Apple wrote. “In determining her transition package, the Compensation Committee considered Ms. Ahrendts’ compensation arrangement at Burberry and the amounts that she was expected to receive in future years. At the time, Ms. Ahrendts was among the highest paid executives in the U.K. and held unvested Burberry equity awards with a value of approximately $37 million.”

Part of the reason Apple’s been so generous to Ahrendts is because her job extends to much more than just managing the Apple Stores: The former Burberry head was brought on specifically for her fashion taste to help design an Apple Watch that would be visually appealing to customers. We’ll find out whether she succeeded when the new device launches in the spring of this year.

TIME Money

Americans Are Optimistic About the Economy Again

Money
George Washington David M. Elmore—Getty Images/Flickr RF

Middle-income America hasn't been this upbeat in years

The days might still be short and gray in much of the country, but when it comes to money and finances, Americans today have a sunnier outlook than we have in a long time.

A new Gallup survey on how Americans feel about our standard of living hit the study’s highest-ever level since the organization began tracking the metric seven years ago.

Every month, Gallup asks Americans if they’re satisfied with their standard of living and if they think that standard is going up or down, then calculates the answers into a single-number index. In December, that number was at 50 — an all-time high. By comparison, the index was at 14 back in October and November of 2008 when the Great Recession was at its worst.

In another all-time high, 81% of respondents say they’re satisfied with their current standard of living, a jump of 12 points since hitting a recession-era low in late 2008.

And we’re even more optimistic about the future. Today, Gallup finds more than six in 10 Americans say it’s “getting better” when asked about their standard of living — the highest-ever recorded in response to this question, and almost double the one-third of Americans who selected this answer back in October 2008, a record low.

“People’s outlook for their standard of living going forward has improved much more than their current satisfaction with it,” Gallup says.

In a second recent survey, the America Saves campaign finds that our collective willingness and ability to save is significantly higher than it was last year immediately after the holidays.

“[This] suggests that Americans are now feeling better about their financial condition,” Stephen Brobeck, a founder of America Saves and executive director of the Consumer Federation of America (the nonprofit behind America Saves), said in a statement.

The America Saves data show this greater interest in and ability to save is driven primarily by households with an annual income of less than $75,000.

“Our new data suggest that low- and middle-class Americans are feeling more optimistic about their financial situation now than a year ago,” Brobeck says.

In its analysis, Gallup suggests that freer spending, perhaps helped along by low gas prices, could be contributing to our collective optimism. The America Saves data offers clues that this could be the case: Compared to a year ago, the income bracket reporting the biggest jump in how effectively they’re able to save money is households earning less than $25,000.

“Instead of being distracted by heavy holiday spending and debts, they are . . . interested and active saving today,” Brobeck says.

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