TIME Coffee

Starbucks Unveils First Location in Colombia

Inside A Starbucks Store And The "Returning Moms" Program Ahead Of International Women's Day
Bloomberg/Getty Images

And will open 50 more within the next 5 years

Starbucks is spreading its corporate empire to a country already known for the strength of its coffee.

After 43 years of roasting and selling Colombian coffee, Starbucks opened its first store in Bogota, fully aware that it will have to compete with a number of domestic chains in a country with one of the world’s most vibrant coffee cultures. The new coffeehouse is bigger and more fancy than your typical Starbucks—the three-floored café has comfortable armchairs and elaborate wall art. The new branch will be the first anywhere to sell exclusively locally-sourced Starbucks coffee, the company said in a statement.

Starbucks “is looking to achieve a leadership position in the [Colombian] market,” said a statement by Nutresa, one of the two Latin American companies Starbucks is partnering with in the new venture.

The U.S. company’s main competitor will be Juan Valdez, a multinational chain that also sells 100% Colombian coffee. Juan Valdez seems to welcome the competition, though; Alejadra Londono, head of international sales, told the New York Daily News that “there’s room in the market for us both.”

Yet with Starbucks planning to open 50 stores in the market within the next five years, it remains to be seen whether Londono’s assured words will stick.

TIME energy

6 Simple Ways to Save on Your Energy Bill

Reduce your carbon footprint and keep more money in your pocket

+ READ ARTICLE

Unless you’re the Viking God and Marvel Comic character Thor, with the enviable ability to harness electricity—i.e. lightning—using your magic hammer, odds are you have to buy energy from other sources like power plants and gas stations.

Energy is a major expense for American families—about 22% of all energy consumed in the U.S. goes into running our households and all the modern conveniences we’ve come to rely upon, like our air conditioners, heaters, lights and computers.

Fortunately, there are easy ways to cut back on your energy usage, reducing your carbon footprint on the environment and your energy bill along with it. Here are six areas where cutting back on your energy usage is an easy way to put more money in your pocket.

TIME Autos

GM’s Mary Barra Faces Another Capitol Hill Mauling

General Motors CEO Mary Barra Testifies Before Senate Committee About GM's Recalls
CEO of the General Motors Company Mary Barra testifies during a hearing before the Consumer Protection, Product Safety, and Insurance Subcommittee of the Senate Commerce, Science and Transportation Committee on July 17, 2014 on Capitol Hill in Washington. Alex Wong—Getty Images

Barra is headed to the Senate for her fourth congressional hearing since record series of recalls began in February

Senators grilled GM’s general counsel Michael Millikin during a hearing Thursday after an internal investigation released last month found that his legal team knew of safety concerns linked to a faulty ignition switch for several years before recalls were announced in 2014.

“How in the world, in the aftermath of this report, did Michael Milliken keep his job?” asked Sen. Claire McCaskill, chair of the Subcommittee on consumer protection, product safety, and insurance, which held the hearing. “It is very clear that the culture of lawyering up and Whac-A-Mole to minimize liability in individual lawsuits killed innocent customers of general motors.”

“The failure of this legal department is stunning,” she said.

CEO Mary Barra, making her fourth hearing appearance on Capitol Hill since the company began massive recalls this year related to the ignition switch problem that has been linked to at least 13 deaths, was largely praised by Senators for her handling of the scandal, which erupted just weeks after she assumed the post.

Thursday’s hearing came in the wake of a New York Times report that found that GM withheld information from regulators inquiring about fatal accidents. Citing documents obtained through the Freedom of Information Act, the New York Times reported on Tuesday that GM “repeatedly found a way not to answer the simple question from regulators of what led to a crash.” In some cases, GM said it had not conducted an assessment and in others it simply declined to provide an answer. In another case, the company cited attorney-client privilege.

The hearing in Congress aimed to focus on accountability in corporate culture, as lawmakers aim to keep corporations from covering up safety concerns. Three senators introduced a bill on Wednesday that would impose criminal penalties for corporate executives who hide product dangers.

Milliken says he was not informed about the safety concerns until February of this year, and Barra defended her decision not to fire him. “He is a man of high integrity,” she said.

Following the internal investigation last month, GM fired 15 employees and Barra blamed “a pattern of management deficiencies and misjudgments.” But she said the probe found no deliberate cover-up by the company.

The Justice Department is separately investigating why it took the company more than a decade to address the problem.

Barra and Millikin were joined at the hearing by Anton Valukas, who headed up the internal report, and Rodney O’Neal, the head of the ignition switch supplier, Delphi. Kenneth Feinberg, who is administering GM’s compensation payments, also took questions from lawmakers about the compensation program.

TIME Companies

Microsoft to Cut Up to 18,000 Jobs

Microsoft CEO Satya Nadella gestures during the keynote address of the Build Conference in San Francisco, April 2, 2014
Microsoft CEO Satya Nadella gestures during the keynote address of the Build Conference in San Francisco, April 2, 2014 Eric Risberg—AP

Most of the cuts will come from Nokia, which it bought in April

Correction appended 11:o9am ET

Software giant Microsoft Corp will cut up to 18,000 jobs over the next year, it announced in a press statement Thursday.

The company said the cuts are part of “a restructuring plan to simplify [the] organization and align the recently acquired Nokia Devices and Services business with the company’s overall strategy.”

The bulk of the cuts, around 12,500 professional and factory positions, will come from the Nokia business, which Microsoft purchased for $7.2 billion in April. The acquisition brought Microsoft’s headcount to around 127,000 staff.

The cuts, which will be fully completed by June 30 next year, are the largest in Microsoft’s 39-year history. In 2009, former Microsoft CEO Steve Ballmer cut 5,800 jobs or 6 percent of staff to stem the effects of the recession.

The plans were announced in an email from Microsoft CEO Satya Nadella, who was appointed in February. This email follows Nadella announcing plans for a “leaner” business in an open note to employees last week.

Nadella’s cuts may be an attempt to make Microsoft more competitive against Google and Apple. Computer-maker Hewlett Packard has also announced job losses with plans to cut 50,000 of their 250,000 workforce over the next three to five years.

Correction: This article originally misstated how many staff joined Microsoft with the Nokia deal. It was around 32,000.

TIME Video Games

Microsoft Claims Xbox One Sales Doubled Since Price Cut

Microsoft

But since Microsoft won't release unit sales figures, we have no way of gauging what that claim actually means

The Xbox One’s price drop from $499 to $399 in early June is apparently paying dividends: Microsoft says in an Xbox Wire post that Xbox One sales have more than doubled since the company began selling a Kinect-less version of its flagship games console on June 9.

The “more than double” claim is based on undisclosed May sales, and Microsoft says its data stems from sold-through units, meaning purchases, not just units shipped to stores. The company adds that Xbox 360 growth is “solid” as well.

The update comes in advance of NPD’s June video game sales figures, due later today. The XBox One slashed prices earlier this summer to parity with Sony’s PlayStation 4, which also retails at $399.

Since NPD stopped providing unit sales breakdowns years ago, and Microsoft didn’t provide specific May figures, it’s impossible to gauge or even much guess at what “more than double” means. Microsoft could have sold a dozen Xbox Ones in May (making June’s take a whopping 24!), or it could have sold half a million. All we know for sure, taking Microsoft at its word, is that Xbox One sales are up.

The last these companies talked unit sales specifics (around the end of March), Sony said it had sold-through some 7 million PS4s *, Nintendo that it had sold-through just over 6 million Wii Us, with Microsoft bringing up the rear at around 5 million Xbox Ones shipped to stores.

* Edge apparently reported in early July that Sony had sold 9 million PS4s, but Sony has not confirmed.

TIME Economy

Surprise: The Economy isn’t As Bad As You Think

7 signs America has turned the corner

Nearly seven years after the onset of the Great Recession, the national mood remains troubled. Surveys find entrenched pessimism over the country’s economic outlook and overall trajectory. In the latest NBC News/Wall Street Journal poll, 63% of respondents said the U.S. is on the wrong track. It’s not difficult to see why. Set aside the gridlock in Washington for a moment and appreciate the weakness of the economic recovery: Households whose finances were too weak to spend. Large numbers of unemployed workers who couldn’t do so either. Younger Americans who couldn’t afford their own homes. Banks that were too broken to lend. Yet nearly a year ago, I wrote an essay for TIME suggesting that the economy could surprise on the upside. That hypothesis looks even more valid today.

Despite the pessimistic mood, America is experiencing a profound comeback. Yes, too many Americans are out of work and have been for far too long. And yes, we have a huge amount of slack to make up. In fact, if the 2008 collapse had not happened, the U.S. GDP would be $1 trillion–or more than 5%–higher than it is today.

But in terms of the growth outlook, the news is good. Goldman Sachs and many private-sector forecasters project a 3.3% growth rate for the remainder of 2014. The first half of 2014 saw the best job-creation rate in 15 years. Total household wealth and private employment surpassed 2008 levels last year. Bank loans to businesses exceeded previous highs this year. And income growth will soon improve too. America is finally returning to where it was seven years ago.

As halting as the U.S. recovery has been, the economy is now leaner and more capable of healthy, sustained growth through 2016 and beyond. Our outlook shines compared with that of the rest of the industrialized world, as Europe and Japan are stagnant. The 2008 economic crisis and Great Recession forced widespread restructuring throughout the U.S. economy–not unlike a company gritting its teeth through a lifesaving bankruptcy. Manufacturing costs are down. The banking system has been recapitalized. The excess and abuse that defined the housing market are gone. And it’s all being turbocharged by an energy boom nobody saw coming.

It’s not just economic trends that are looking up: crime rates, teen pregnancy and carbon emissions are down; public-education outcomes are improving dramatically; inflation in health care costs is at a half-century low. That points to something I did not foresee last year: that the social health of America seems to be mending. Americans may still feel discontented, but winter is finally over.

AMERICANS ARE SPENDING LIKE THEY MEAN IT

The biggest piece of the U.S. economy, by far, is the consumer sector. It represents 70% of GDP in most years. But consumers suffered historic setbacks in 2008 and 2009. According to a Federal Reserve Board report, 13% of households experienced “substantial financial stress.” This compares with only 1% during the previous two recessions. And it is why consumer spending fell so sharply in 2009, as frightened households cut back.

It has taken years for total household finances to recover fully, but now they have. Total household net worth is now well above its 2007 peak, driven by the recovery in stock prices and home values. Household debt-to-income ratios are the lowest in more than 30 years. And the first half of 2014 has seen employment begin to take off.

Indeed, consumer spending is strengthening alongside consumer confidence, which is nearly back to prerecession levels. For all of 2014, consumer spending should grow around 3% as real disposable income rises and the savings rate moderates. With an average of 248,000 new jobs having been added in each of the past five months, the unemployment rate is probably on course to fall to 5% in 2016. Although part of the decline in the unemployment rate to date is due to stubbornly low labor-participation rates, the overall outlook for consumer spending, the engine of our economy, is healthy again.

HOUSING HAS COME BACK TO LIFE

A good recovery in the housing sector was inevitable because both the supply of viable housing and household-formation rates had dropped to very low levels. That combination finally triggered a snapback.

At first, it was housing prices that turned up. Over the past year, they rose in each of the 20 largest metropolitan areas. And since its low point in early 2012, the Case-Shiller Home Price Index has risen more than 25%. This revived the housing market and helped restore overall household balance nationwide.

Single-family and multifamily housing starts have also recovered strongly. They exceeded 1.5 million annually in the decade before the crisis but collapsed to less than 500,000 in its aftermath. Now they are over 1 million and should go higher. Most forecasts envision a rate of roughly 1.2 million next year, continuing to rise to 1.6 million over the next few years. Keep in mind that new housing construction and renovations drive a wide range of manufacturing and services output, from appliances to trucking. Indeed, private residential investment has jumped by more than 27% since 2012.

Finally, economic hardship forced record numbers of grown kids to stay with their parents, depressing household formation to rates far below normal. But this too is improving. Harvard’s Joint Center for Housing Studies estimates that formation rates will double to 1.2 million annually as kids finally move out and the adult population increases.

AMERICAN-MADE MAKES SENSE AGAIN

A new factor to add since my previous analysis is manufacturing. A near consensus that this sector was in permanent decline has existed for many years. It was accentuated by the loss of nearly 6 million manufacturing jobs from 2000 to 2010 and by the sense that much lower wages in Asia made continued offshoring inevitable.

But recently the greater role of technology in manufacturing and rising wages in Asia have given our manufacturing sector some life. A recent Brookings Institution report on manufacturing stresses how robotics, 3-D printing and the relentless advance of digital technology are transforming big parts of U.S. manufacturing. Moreover, as China’s GDP has continued to grow, its wages have risen considerably, narrowing the cost differential with the U.S. In many industries, the cost-to-produce difference is now down to 15%.

That explains why certain U.S. producers are reversing themselves and committing to manufacturing goods at home. Walmart announced that it would sell $50 billion more in American-made products over the next 10 years, and the Boston Consulting Group recently estimated that up to 30% of offshore production would return. Although manufacturing has added 668,000 jobs since the 2010 nadir, continued automation will prevent this sector from being a major contributor of new jobs in the future. But the role of manufacturing in our GDP is stable, and the sense that other sectors of the economy would need to compensate for continued declines in manufacturing is out of date.

ENERGY PRODUCTION IS BOOMING

If ever there was proof of the difficulty of forecasting, it is the stunning recovery in our oil-and-gas production. Virtually no one from ExxonMobil on down saw this coming. Nor the way in which made-in-the-USA technology made it happen. The idea that America, whose oil production has been declining for the past 40 years, is now on track to become the world’s biggest producer by 2015 is still hard to grasp. As is the notion that after similar declines in production of natural gas, we now have a 100-year supply of natural gas at current rates of consumption. The U.S. Energy Information Administration expects total U.S. crude-oil production to increase more than 25% to 9.3 million barrels per day by 2015, which would mark the highest level since 1972. Daily natural gas production, which grew by 5% over the past year, is expected to continue climbing, with the U.S. becoming a net exporter by 2018.

This is a plus for growth, for household budgets and consumption, for climate protection and for America’s national security. Given our huge new supplies, natural gas is cheaper here–around $4.70 per 1,000 cu. ft.–than anywhere else. This means lower utility bills across the country. It also means that gas is being substituted rapidly for the dirtiest fuel, coal, to produce electricity. And that both America’s stake in the unstable Persian Gulf and our borrowing from China are diminished as we import less energy. The rise, fall and rise of the American oil-and-gas sector is probably, together with development of the Internet, the biggest economic breakthrough in this country in 50 years.

OUR ENVIRONMENT IS GETTING HEALTHIER

Although there remains a heated political debate over climate change and its causes, few people, regardless of their views on that, actually favor more carbon emissions. But there is also an unexpected positive trend. Carbon emissions in the U.S. actually have been falling. Today they are down nearly 10% from 2005 levels. It is possible that the U.S. will meet its goal of cutting emissions by 2020 to 17% below that 2005 baseline.

Technology and regulation explain this surprising trend. Take the auto industry. At one level, Washington upped fuel-efficiency requirements to a stiff fleetwide average of 54.5 m.p.g. by model year 2025. At another, galloping advances in engine technology and vehicle weight are enabling automakers to improve their mileage more quickly than anyone forecast. And the EPA has just mandated sharp reductions in emissions from coal-fired plants.

The U.S. has been among the worst offenders in emissions. To have any credibility in leading global negotiations on these issues, we need to lead the way.

AMERICAN SCHOOLS ARE WORKING SMARTER

How often have you read that America’s education system, especially public education, is a failure? It has a long way to go, but it has started to improve. This is crucial because differentials in lifetime earnings by level of education are widening. Driven by globalization and technology, labor markets are demanding higher and higher levels of skills. Therefore, to improve incomes for younger Americans, we must get better educational outcomes.

For 25 years, those outcomes were stagnant. High school graduation rates had fallen to 60% or lower in many large cities and rural areas. And just over half of first-year college students would graduate within six years. These are poor results by the standards of advanced countries.

But beginning in 2006, the decline began to reverse. High school completion rates are now up almost 10 points, crossing 80% for the first time.

According to a recent report from Johns Hopkins University, the turnaround reflects countless grassroots efforts toward public-school reform. Instigated by parents, business groups, nonprofits, state and local governments and, in some areas, teacher unions, these efforts have concentrated on teacher training and evaluation, better collection and use of data in supporting students, improved curriculum materials and the restructuring or closing of underperforming schools, sometimes called dropout factories.

It is crucial that these reforms continue because if they do, that same Johns Hopkins study predicts that U.S. high schools will reach a 90% completion rate by 2020. That would be a huge achievement. Over the past decade, college-completion rates also have strengthened, nearing 60%. True, the college readiness of high school graduates has not improved in line with graduation rates. But recent advances that tie online education to different approaches in the classroom may soon improve this too.

SOCIAL TRENDS ARE MOVING IN THE RIGHT DIRECTION

America has seen a drop in crime rates that in earlier years would have been universally viewed as impossible. The overall crime rate has plummeted by 45% since peaking in 1991 and by 13% just since 2007–counterintuitively continuing to drop through the recession and sharp spike in unemployment.

Since 1991, according to FBI data, the number of violent crimes has fallen 36% nationally and 64% in the nation’s largest cities. And in New York and Los Angeles, our two largest cities, it has fallen even further. Property crime has also become increasingly rare. Incredibly, in New York City, car thefts have plunged 94% in the past two decades.

How is this possible? In the mid-1990s, few saw this decline coming, and many warned that crime would surge once again as teens of that era grew into young adults. Today, criminologists still differ on what has caused the nationwide turnaround in crime rates and why those dire predictions never came to pass. But crime-fighting technology, better policing, aging societies, growing urban populations and declining usage of hard drugs are widely cited.

For many Americans, the drop in crime has resulted not only in a much higher quality of life but in a reduced economic burden as well. Safer cities generally mean stronger urban economies.

In the same category of big surprises, teen-pregnancy rates have fallen to their lowest level in more than 30 years, according to the widely respected Guttmacher Institute. They have declined 51% from their 1990 peak, based on the latest available data, and the teenage birthrate is down 43% from that year’s level. Today, fewer teens are becoming pregnant and becoming mothers than at any point since reliable data has been collected by the National Center for Health Statistics. This is also true for women in the 20-to-24 age group. To put it mildly, there were very few predictions to this effect a generation ago.

In addition, overall birthrates in the U.S. have turned up for the first time since 2007–including for children born to women with a college education–to just shy of 4 million.

THE CHALLENGE AHEAD

Our country’s biggest challenge now is the plight of lower-income Americans, who are under severe and sustained economic pressure. Today, America resembles a tale of two cities. Those who own homes or stocks have benefited from the recovery in these asset classes and are moving up again. But 40% of our working-age families earn $40,000 a year or less. Generally they live within 250% of the official poverty level, which is the eligibility threshold for food stamps. Indeed, judging from current trends, half of today’s 20-year-olds will receive food stamps during their adult lives. More broadly, median household income is still 8% below the precrisis level, and those who have not completed college are seeing declines in anticipated lifetime earnings compared with their peers with college degrees.

This is our primary economic challenge. If a third of our population has little purchasing power, it will be hard to achieve the rate of long-term growth we want. We need to improve the work skills of this group, strengthen the social safety net and increase the number of young Americans receiving a full college education.

Although doing more to relieve the financial burdens of working Americans is good economics, it is also, and perhaps more important, a matter of values. For much of the 20th century we strove, with much success, to build a fairer and more inclusive society. But today, too many working families are living paycheck to paycheck or even in outright poverty, while the toeholds to economic stability become fewer and farther between.

With our economy’s near- and medium-term economic outlook strong, now is the time to remove the barriers that are keeping hardworking Americans walking a far too thin financial line.

Altman, who served as Deputy Secretary of the Treasury during the Clinton Administration, is the founder and executive chairman of Evercore Partners

TIME technology

Comcast, AT&T Say They’re Not Big Enough Yet

Comcast
The Comcast Corp. logo is seen as Brian Roberts, chairman and chief executive officer of Comcast Corp., right, speaks during a news conference at the National Cable and Telecommunications Association (NCTA) Cable Show in Washington, D.C., U.S., on Tuesday, June 11, 2013. Bloomberg—Bloomberg via Getty Images

At a Senate hearing ahead of major merger melees

Two of the biggest players in the telecom industry faced off against a public interest group, a trade group and a satellite company at a Senate hearing Wednesday in a debate that will help set the stage for upcoming battles over the future of broadband, television and streaming video.

The hearing comes just as federal regulators are staffing up to review two mammoth mergers: One between Comcast and Time Warner Cable, and another between AT&T and DirecTV. To some degree, the hearing was only ceremonial: Congress won’t have any direct say over whether federal regulators approve or deny the mergers. But political winds in Washington can affect regulators’ moods, and the back-and-forth gave members of the Senate Committee on Commerce, Science and Transportation a chance to publicly speak their minds on the mergers.

While the discussion at the hearing was unflaggingly respectful, it touched, just below the surface, on what has become a fiercely ideological war with regard to the future of TV, with each side presenting a vision incompatible with the other’s.

Comcast and AT&T argued that massive consolidation in the telecom industry is good for consumers, good for innovation, and good for the free market. They warned that if the government does not allow the mergers to go through, incumbent telecom companies would no longer be able to invest in basic Internet infrastructure, leaving consumers to pay more for fewer Internet and TV options.

Representatives from advocacy group Public Knowledge, a TV writer’s guild, and satellite TV company Dish made the opposite case. They said that recent consolidation in the telecom industry has been terrible for consumers, driven up prices and driven down the quality of customer service. They also said the lack of competition has squashed innovation and investment in broadband infrastructure.

At the center of the discussion was Americans’ shifting TV-viewing habits. When Americans want to watch TV, they’re increasingly bypassing traditional set-top boxes, instead opting for their smartphones, tablets, and laptops. Online video consumption grew by 71% in the U.S. between 2012 and 2013, according to Nielsen.

That trend has been the driving force behind skyrocketing broadband subscriptions—a major cash cow for cable companies and for telecom companies that offer services faster than DSL. AT&T’s revenue from its U-Verse high-speed broadband business was up 29% from last year according to a recent quarterly report, for example. Comcast, which already has more than 21 million broadband subscribers, says the broadband business is one of its fastest-growing offerings.

That so many Americans are streaming more video online has also made online TV and video content companies, like Netflix, YouTube and Vimeo, fundamentally dependent on telecom companies’ pipes to reach customers. Public Knowledge’s Gene Kimmelman argued that no online video streaming company can exist without going through broadband providers like AT&T and Comcast, whose services are necessary to deliver streaming content to consumers. That sets up a potential problem, as Comcast could be incentivized not to carry Netflix or YouTube content as quickly as its own video offerings (Comcast owns NBCUniversal, a major content production company).

“Everyone who wants to make the online video system works needs to make a deal with Comcast,” he said.

Also addressed during the hearing was many Americans’ frustration at having to pay large bills for pay-TV—bills that have risen faster than inflation—to receive hundreds of channels. The non-profit consumers rights group, Consumers Union, has said that at least two-thirds of pay-TV customers [PDF] would prefer to pay less for a handful of programs that they actually watch. The disconnect between these two methods—known as “bundling” versus “a al carte”—is at the heart of the future of online video.

“The younger generation doesn’t want to spend $120 for 500 channels,” said Jeffrey Blum, a senior vice president of Dish, the second-largest satellite company in the country after DirecTV. But fixing the problem, he said, requires going up against incumbent telecom companies, like Comcast, AT&T and Verizon, which rely on bundling to underwrite their pay TV services, and would lose out if most Americans simply cut their pay-TV bill and began streaming shows online. Popular networks like ESPN would also lose out; in the current system, the telecom companies pay them large fees to redistribute their content.

Still, Blum said, there is already “too much power in the hands of too few” in the broadband space. A combined Comcast-Time Warner Cable “will have the incentive and ability to stifle competition,” he said.

Both Cohen and AT&T’s senior executive VP John Stankey dismissed concerns about anticompetitive behavior. In previous testimony before Congress, Comcast’s executive VP David Cohen has said that the merger between Comcast and Time Warner Cable will not affect competition since the companies do not currently compete in any geographic region, and that Comcast has “only to gain” from more people streaming video online. The more demand there is for online video, “the more demand there is for our broadband service,” he said at a previous hearing.

In February, Comcast made a bid to buy Time Warner Cable for $45 billion; in May, AT&T’s bid for DirecTV was worth $48.5 billion. Neither deal has yet to pass regulatory muster.

Both Cohen and Stankey also reiterated their companies’ commitment to the Federal Communication Commission’s now-defunct rules on “net neutrality,” the notion that broadband providers treat all content that passes over their pipes equally. While both expressed their opposition to some public interest groups’ hopes that the telecom industry would be recategorized as a “Title II” industry, giving the FCC much more regulatory control over broadband, they said they supported the FCC’s newly proposed net neutrality rules.

Those rules have come under fire because they allow broadband companies to redirect some content to a “fast lane,” while relegating most content to a slower, regular lane. Cohen said that while he “didn’t understand” what “fast lanes and slow lanes” even were, he said it was a non-issue. “We don’t have any,” he said. “We don’t have any plans to develop any.”

TIME Companies

How Chick-fil-A Totally Crushed KFC, Popeyes

Chick-fil-A Is a Growing Threat in Fast Food Market
A U.S. flag flies outside a Chick-fil-A Inc. restaurant in Bowling Green, Kentucky, in March 2014. Bloomberg via Getty Images

Wall Street is paying closer attention to Chick-fil-A, which has discreetly surpassed fast food giants despite its limited presence and tainted reputation

Investors are eyeing the privately-held Chick-fil-A, a rising fast food chain that’s quietly emerged as a competitive threat against publicly-traded giants like McDonald’s and KFC.

Unbeknownst to many, Chick-fil-A has dethroned Colonel Sanders to claim the greatest market share in the American limited-service chicken segment, according to a new report from Janney Capital Markets (JCM). Its rise to chicken champion actually occurred in 2012 when Chick-fil-A won 25.1% market share, slightly more than KFC’s 24.4%, a remarkable growth story shadowed by controversy over Chick-fil-A’s owner’s social views and other strange reports.

Here’s a time-lapse chart with data from JCM showing how Chick-fil-A has gobbled up market share from KFC, Popeyes and other chicken chains like Zaxby’s and Bojangles’ Famous between 1999 and 2013:

On the surface, Chick-fil-A pales in comparison to its competitors: it has only 1,700 stores, a small handful compared to KFC’s 4,491 stores, and because it’s a private company its financials are undisclosed, making it impossible to know precisely its earnings. Yet the report estimates that Chick-fil-A posts an average annual growth rate of 12.7% — huge when compared to KFC’s 1% — thanks to its strong sales and store expansion.

But it’s not Chick-fil-A’s newfound dominance over KFC or Popeyes that interests investors—it’s that Chick-fil-A could soon overpower McDonald’s. While the golden arches have dominated the American fast food market, McDonald’s reported declining U.S. sales in recent months, a trend that might allow Chick-fil-A to steal McDonald’s growth opportunities over the next 10 years, according to the report.

McDonald’s is projected to add between $1 and $10.3 billion to its U.S. sales between 2014 and 2023, while Chick-fil-A is projected to add between $6.3 and $9.0 billion, indicating that Chick-fil-A is nowhere near done growing, especially as it expands northward to compete with McDonald’s stores.

“Chick-fil-A should get more attention from the Street in coming years, in part because it represents a growing competitive threat to other sizable quick-service chains, perhaps most notably McDonald’s,” the report states. “It is entirely possible that [Chick-fil-A's sales growth] will be similar to—or worst-case, from McDonald’s perspective—greater than the systemwide sales that McDonald’s can add to its domestic business over that same time.”

 

 

TIME Companies

Apple Set to Pay Out $450 Million Over E-Book-Price-Fixing Scandal

Federal Judge Rules Against Apple In EBook Price Fixing Lawsuit
The Apple logo is seen through a fence in front of an Apple Store on July 10, 2013 in San Francisco, California. Justin Sullivan—Getty Images

However the settlement sum could drop to zero if Apple is acquitted in a separate lawsuit

Apple has agreed to pay $450 million to plaintiffs in 33 states, should it be found guilty of an e-book price fixing conspiracy — but that’s a big “if.”

Whether Apple pays that sum will depend on the outcome of a separate lawsuit filed by the Department of Justice, which also accuses Apple of conspiring to inflate e-book prices with several major publishers.

Should that case end in a guilty verdict, Apple will pay $450 million to avert a class-action lawsuit from customers in 33 states who claim they were overcharged by the company.

However, if the case is remanded to a lower court, then the settlement sum will drop to $70 million. If Apple is acquitted of any wrongdoing, the company will pay no settlement at all.

“This settlement potentially provides for exceptional consumer recovery and ensures an efficient use of judicial resources,” read a court document from the plaintiffs supporting the deal, first reported by the Hollywood Reporter.

Apple was found guilty of price-fixing by a Manhattan court last year, but the company has appealed the ruling and maintained that the government has attempted to “reverse engineer a conspiracy from a market effect.”

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