Walmart to offer cheaper brand of organic foods
NEW YORK — Walmart is using its massive size to drive down the price of organic food items from tomato paste to chicken broth to make them more affordable for its low-income customers.
The world’s largest retailer and nation’s largest grocery seller said Thursday that it has teamed up with Wild Oats to sell a new line of organic foods, starting this month, that’s at least 25 percent cheaper than the national organic brands it carries and in line with the prices of its branded non-organic alternatives. Wild Oats helped pioneer the organic food trend in the late 1980s but has largely disappeared from store shelves since 2007.
Wild Oats’ 6-ounce can of tomato paste, for example, is priced at 58 cents, compared with 98 cents for a national-brand organic version. And a 32-ounce can of chicken broth under Wild Oats is priced at $1.98, compared with $3.47 for a national-brand alternative, according to the discounter’s survey of 26 nationally branded organic products available at Walmart.com.
Walmart Stores Inc. is unveiling nearly 100 pantry items under the Wild Oats label over the next several months, adding to the 1,600 organic food items it already carries. It’s taking a cautious approach, planning to have them in about half of its 4,000 domestic namesake stores to make sure it can satisfy demand. The Bentonville, Ark., company will be the exclusive national retailer of Wild Oats.
“We are removing the premium associated with organic groceries,” Jack Sinclair, Walmart’s executive vice president of grocery, said Wednesday.
Walmart and other mainstream stores are eagerly trying to stake a bigger claim in the hot organic market as they see shoppers from all different income levels wanting to eat healthier. Analysts think that Walmart’s strategy could put more pressure on companies like Whole Foods to lower prices. — AP
Ally Financial’s IPO raises $2.38 billion
Ally Financial Inc. held the largest IPO of the year this week, but its shares fell in their trading debut Thursday.
The Detroit-based auto lender is the former financing arm of General Motors. It was nearly wrecked years ago by bad subprime mortgages through its Residential Capital unit and received a $17.2 billion bailout by the U.S. government during the financial crisis.
Ally has since cut ties to ResCap and transformed itself into a company focused on U.S. auto lending and banking.
Its offering of 95 million shares priced at $25 each raised $2.38billion. That’s the largest initial public offering thus far in 2014, which has proven a busy year for IPOs.
Ally’s shares priced at the low end of its expected $25 to $28 range. Its shares fell 4 percent to close at $23.98 Thursday. — AP
Crude oil reserves highest since 1976
Crude oil reserves in the U.S. grew for the fourth straight year, reaching the highest level since 1976, according to an Energy Department report released Thursday.
The report says reserves grew 4.5 billion barrels, or 15 percent, to 33 billion barrels in 2012. It was the biggest one-year jump since 1970.
The U.S. consumed 6.9 billion barrels of crude-based fuels last year.
Drillers have learned how to unlock oil trapped in rock formations once thought too expensive to tap, using horizontal drilling and hydraulic fracturing, a process known as fracking. North Dakota and Texas, home to the two most prolific of these formations, accounted for the vast majority of the increase. — AP
GM to replace second part in recalled cars
General Motors announced Thursday it will take a $1.3 billion write-down to cover the cost of repairs related to faulty ignition switch recalls, and placed two engineers at the center of the recall scandal on paid leave.
The company also said it will replace a second part in the affected cars.
GM Chief Executive Mary Barra confirmed Thursday that two engineers were put on leave following a briefing from Anton Valukas, the former U.S. attorney overseeing an independent investigation into circumstances leading to a safety recall of 2.6 million GM cars because of a faulty ignition switch.
“This is an interim step as we seek the truth about what happened,” Barra said Thursday. “It was a difficult decision, but I believe it is best for GM.”
The defect causes vehicles to shut off, disabling the air bags and other key functions, and has been linked to 13 deaths. GM has known about the problem for more than a decade but did not recall the cars until earlier this year.
The auto company had already set aside $750 million to fix the cars with the bad switch, to provide owners loaner vehicles when requested, and to repair about 3.5 million other vehicles recalled this year for other problems.
Now GM said it will take a $1.3 billion charge against its first-quarter earnings to cover those expenses.
GM also has told the National Highway Traffic Safety Administration that it will replace the ignition lock cylinders in the recalled cars. The cylinders can allow removal of the ignition key while the engine is running, leading to a possible rollaway, GM said. — The Los Angeles Times