The daily business briefing: June 12, 2017
Aldi raises stakes in grocery price wars, GE shares gain as CEO steps aside, and more
Aldi announces $3.4 billion investment in U.S. grocery store expansion
German grocery chain Aldi said Sunday that it planned to invest $3.4 billion to expand in the U.S. Aldi already operates 1,600 stores in the U.S. It said it would open another 400 by the end of 2018, and would reach a store base of 2,500 by 2022. Aldi said it would spend $1.6 billion to remodel 1,300 of its current stores as it raises the stakes in a price war with rivals. The new spending will raise Aldi's capital investment this year to $5 billion as it competes in an increasingly brutal price war. German rival Lidl is opening its first 100 U.S. stores on June 15, boasting that it will offer prices up to 50 percent lower than the competition. Walmart, the largest U.S. grocer, is pressing vendors to undercut rivals by 15 percent.
GE announces longtime CEO Jeffrey Immelt's departure
General Electric said Monday that CEO Jeffrey Immelt is stepping down after 16 years on the job. Immelt will remain as chairman of the board until his retirement at the end of the year. Health-care head John Flannery will take over as CEO in August, then become chairman of the board when Immelt leaves. Flannery's appointment came after succession planning that started in 2011, the company said. Flannery has led a turnaround at GE Healthcare, increasing organic revenue by 5 percent, GE said. GE shares climbed more than 2 percent in premarket trading.
Uber board accepts Eric Holder's recommendations on reforms
Uber's board voted unanimously on Sunday to adopt a series of recommendations from former Attorney General Eric Holder to reform the ride-hailing service's corporate culture following a sexual harassment investigation. The recommendations, which are expected to be announced to employees on Monday, are expected to impose tighter controls on spending, human resources, and other areas where executives have had an unusual degree of autonomy. Holder and his law firm were hired in February to investigate Uber's inner workings after former Uber engineer Susan Fowler published a blog post describing what she said was an insufficient response by senior managers to allegations of sexual harassment. The board was also weighing a possible three-month leave of absence for the company's controversial CEO, Travis Kalanick.
Jaguar Land Rover unit teams up with Lyft
InMotion Ventures, a unit of Jaguar Land Rover that focuses on autonomous cars and other technology, announced Monday that it would invest $25 million into Lyft to help the ride-hailing company expand and develop new technologies. As part of the deal, the British automaker will supply a fleet of its vehicles. Teaming up with Lyft will provide Jaguar Land Rover with a "real-world platform helping us develop our connected and autonomous services," InMotion managing director Sebastian Peck said. The deal was the latest in a series of cooperative agreements between car companies and technology companies to develop autonomous vehicles. San Francisco-based Lyft, which operates in 300 cities, also partnered with General Motors to research autonomous ride-hailing.
Tech stocks under pressure for second straight day
U.S. stock futures edged down ahead of the start of the week's trading on Monday, with technology shares losing the most as they appeared headed for a second straight day of declines after Friday's plunge. The tech-heavy Nasdaq-100 was down by 0.6 percent early Monday, while the S&P 500 lost 0.2 percent and the Dow Jones Industrial Average about 0.1 percent. "All eyes will be on the U.S. tech giants when the U.S. stock markets open," said Kathleen Brooks, research director at City Index, in a note. "A second session of hefty losses for the Nasdaq and U.S. tech sector could spook the markets this week, so if we don't get a recovery then we may see a broader decline in growth assets."