Business

(NEW YORK) — WeWork, the office-sharing company that experienced a dazzling rise and sudden decline that came to symbolize the excesses of business startup culture, filed for bankruptcy on Monday.

In 2019, the company was valued at $47 billion. By last week, that figure had plummeted to $45 million, with shares of WeWork’s stock falling more than 98% since the beginning of the year.

Creditors holding 92% of the company’s secured debt agreed on a restructuring plan that would include cutting back its portfolio of office leases, WeWork said in a statement on Monday.

“Now is the time for us to pull the future forward by aggressively addressing our legacy leases and dramatically improving our balance sheet,” WeWork CEO David Tolley said in the statement.

Popularized by a charismatic co-founder and fueled by an era of cheap borrowing, WeWork expanded the old-fashioned business of commercial real estate into a vision of transforming the way people work, replete with chic offices offering free beer on tap.

The company met its undoing, however, when a debt-fueled spending spree on leasing office space ran up against insufficient demand from businesses and freelancers, experts told ABC News. The COVID-19 pandemic, which forced many office employees worldwide to work from home, only made things worse.

Here’s what caused the WeWork bankruptcy, and what its implications could be.

What is WeWork’s business model?

WeWork’s business model rested on the proposition that the company could lease and refurbish office space, and then rent the properties to companies and freelancers at marked-up rates, Samuel Rosen, a professor of finance at Temple University’s Fox School of Business, told ABC News.

“WeWork is kind of a middleman,” Rosen said. “They take out a giant portfolio of real estate leases, rent it out and make a profit.”

The company currently offers office space at 660 currently open or soon-to-come locations in 119 cities worldwide, according to its website.

As part of its appeal to tenants, WeWork gained a reputation for lavish spending on stylishly designed spaces with worker amenities such as free kombucha and beer, hammocks, and rock-climbing walls.

What’s behind WeWork’s collapse?

WeWork took on tens of billions of dollars in debt to amass its large portfolio of leased office space. As of 2021, Japanese venture firm SoftBank had invested $17 billion in the company, Bloomberg reported.

However, demand for shared office space never reached the level necessary to match the large acquisition WeWork made. That lack of tenants in turn meant WeWork couldn’t offset those losses or make their sizable rent payments on the office space they’d leased, Erik Gordon, a business professor at the University of Michigan who has studied WeWork, told ABC News.

“They mistakenly thought that signing leases gave them tons of assets,” Gordon said. “There’s tons of empty office space, so having nailed down office space made no sense.”

Since WeWork had taken on debt to fund its lease portfolio, the underperformance gradually pushed the company into bankruptcy.

“It’s the combination of a business model that wasn’t as profitable as originally projected, and a lot of debt,” Rosen said.

What are the implications of WeWork’s bankruptcy?

The bankruptcy of WeWork offers a cautionary tale regarding a period of low interest rates in the 2000s and 2010s that spurred a flood of investment into startups as investors sought novel ventures that could deliver high returns, Gordon said.

When borrowing expenses are low, he added, investors bring less scrutiny to where they put their money.

“It’s a testament to how damaging near-zero interest rates are to the market mechanisms that allocate capital,” Gordon said. “Near-zero interest rates make capital get allocated stupidly.”

Since last year, however, the Federal Reserve has raised interest rates at the fastest pace in more than two decades, making borrowing more expensive for businesses and consumers alike.

Christopher Kayes, a professor of management at the George Washington University School of Business, said in a statement: “The fall of WeWork signals that the excesses of the last decades are being put to rest.”

“The cheap money that enabled the financing of companies like WeWork to thrive was the match in the powder keg,” Kayes added.

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(NEW YORK) — Starbucks will raise the hourly pay of U.S. retail employees by 3% at the outset of next year, the company announced on Monday.

The Seattle-based coffee chain operates roughly 17,000 stores in the U.S., providing employees between $15 to $24 per hour in wages and a full benefits package that reaches as much as $27 an hour, Starbucks said.

Starting on Jan. 1, hourly retail employees will receive a raise of at least 3%. Further, workers with two to five years of employment at the company will gain a 4% raise and those with more than five years of experience will earn at least a 5% raise, the company said.

“Investing in our partners is what drives our success,” Sara Trilling, executive vice president and president of Starbucks North America, said in a statement on Monday. “It’s what makes us all partners. And an important way we do this is by investing in our partners’ journey, to bridge to a better future at Starbucks and beyond.”

In addition to the pay increase, Starbucks will reduce the minimum number of days an employee must work in order to qualify for paid vacation benefits, the company said.

The minimum pay raise of 3% falls short of the annual pace of inflation, which stands at 3.7%.

The announcement arrives amid an ongoing union campaign at Starbucks stores nationwide. Since 2021, a union called Starbucks Workers United has organized more than 350 stores employing roughly 9,000 workers.

Alex Yeager, a worker at a Starbucks store in Albany, New York, who belongs to the union, said in a statement to ABC News that he expects the company to provide the raise only at non-unionized stores.

“Once again, Starbucks is responding to our bargaining demands, but they’re implementing them in nonunion stores and denying these new benefits to workers in stores that are unionizing or already voted to join the union,” Yeager said, noting that the union has filed charges with the federal government over previous instances of such conduct by the company.

“This is against the law, and there are already several consolidated charges from the National Labor Relations Board for benefit packages Starbucks has denied union workers — such as credit card tipping — since we started our campaign,” Yeager added.

A labor board judge ruled in September that Starbucks had illegally provided previous pay increases and benefits to non-union employees without offering them to unionized workers. Bloomberg first reported on the ruling.

Starbucks did not immediately respond to ABC News’ request for comment about the union’s allegation that the pay increase would only be provided to workers at non-union stores.

In its announcement on Monday, Starbucks said: “The company recognizes changes to wages, benefits, and/or terms and conditions may not be unilaterally implemented for partners in stores with organizing underway and may be subject to collective bargaining in good faith for partners in stores with certified union representation.”

In recent months, Starbucks and the union have publicly clashed over a host of issues, including the Israel-Hamas war.

The company sued Starbucks Workers United last month after the labor organization posted a since-deleted message on X, formerly known as Twitter, expressing solidarity with Palestinians. The message from the union triggered calls to boycott Starbucks, when some appeared to mistake the union’s position for that of the company.

Weeks later, the union posted an additional statement on X standing with Palestinians while condemning the deaths of innocent civilians.

“We are opposed to violence, and each death occurring as the result of violence is a tragedy,” the statement said. “We absolutely condemn antisemitism and Islamophobia.”

The union also filed a countersuit against Starbucks, calling its lawsuit an attempt to damage the union and undermine its organizing efforts.

“We strongly disagree with the views expressed by Workers United, including its local affiliates, union organizers and those who identify as members of ‘Starbucks Workers United’ — none of these groups speak for Starbucks Coffee Company and do not represent our company’s views, positions, or beliefs,” Sara Kelly, executive vice president and chief partner officer at Starbucks, said in the statement.

 

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(NEW YORK) — Tyson Foods is voluntarily recalling almost 30,000 pounds of its dinosaur-shaped chicken nuggets due to possible contamination of foreign materials, specifically metal pieces, according to a press release issued by the U.S. Department of Agriculture’s Food Safety and Inspection Service on Saturday.

The specific items subjected to the recall are for 29-ounce plastic bag packages containing “fully cooked fun nuggets breaded shaped chicken patties” with a best by date of Sept. 2, 2024, according to the USDA. The products were distributed and sold in Alabama, California, Illinois, Kentucky, Michigan, Ohio, Tennessee, Virginia, and Wisconsin and bear establishment number “P-7211” on the back of the package.

Tyson alerted USDA after receiving complaints from consumers who found small metal pieces in the products, said the agency, which added there has been “one reported minor oral injury” associated with consumption of the food, but no other additional injuries reported so far.

Tyson Foods did not immediately respond to ABC News’ request for comment.

Officials from USDA expressed their concern that some consumers may have some of the chicken nuggets stored in their freezers and are urging them not to consume the products, return the items to the place of purchase or throw them out.

In a press release posted on its website, Tyson Foods said some of its consumers reported they found “small, pliable metal pieces in the product” and the company decided to recall the products “out of an abundance of caution.”

The company also advised purchasers to cut the UPC and date code from the packaging, discard the product and call or text 1-855-382-3101.

Last year, Tyson Fresh Meats recalled about 93,697 pounds of raw ground beef products, saying the items may be contaminated with “extraneous materials, specifically reflective mirror-like material,” USDA announced. At the time, the agency and company told consumers not to eat the contaminated ground beef, however, there were no confirmed reports of injury or illness from the recalled beef.

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(NEW YORK) — Despite a gradual slowdown in investment opportunities for Black businesses, Daymond John is determined to rewrite the narrative through Black Entrepreneurs Day.

John, CEO of FUBU and co-star of ABC’s “Shark Tank,” started Black Entrepreneurs Day in 2020 to celebrate innovation and enterprise in the Black community. Black Entrepreneurs Day, which held their annual event Wednesday, says it has awarded more than $750,000 in business grants since 2020.

“The need for resources and community support for our Black businesses remains paramount. I salute our partners who year after year, support our mission to educate and inspire Black entrepreneurs around the globe,” John told ABC News.

In 2020, following George Floyd’s death, Black founders raised a record $4.3 billion in venture capital and corporate investments. However, amid increased market uncertainty, financing for Black businesses dropped by 45%, outpacing the 36% decline in overall VC funding in 2022, CNBC reported.

Nine entrepreneurs were selected to win $25,000 each during Black Entrepreneurs Day’s star-studded event at Harlem’s Apollo Theater. New York City Mayor Eric Adams presented John with an official Black Entrepreneurs Day proclamation.

The winners, representing industries ranging from food to financial services and lawn care, won more than $200,000 through the NAACP Powershift Entrepreneur Grant. Applicants were required to share their visions for their businesses, describe the challenges they’ve faced so far, and explain how they plan to use the grant funding in full.

Ashley Sutton, the Salesforce-sponsored recipient of a $25,000 grant, said she has big plans to revolutionize the greeting cards industry.

“I wanted to dive in headfirst with something that had a personal meaning to me. I wanted to disrupt this $7 billion industry that hasn’t been innovated since pop-ups and music,” Sutton told ABC News.

Sutton created Hustle & Hope in 2019 to do just that. Sutton said her love for greeting cards bloomed through her family’s tradition of giving her special notes for every occasion.

Using her 13 years of marketing expertise, she came up with the idea to merge the digital and physical experience by embedding downloadable guides into her inspirational cards through QR codes. The resources cover a wide range of topics including celebrations, self-care strategies, and dealing with rejection– something Sutton said she is very familiar with as a full-time entrepreneur.

This investment will allow her to expand the Hustle & Hope team and hire an intern, Sutton said.

‘”If I kept track of every ‘no’ I’ve ever gotten, I could probably fund my business,” Sutton said. “But it’s just this unwavering belief in myself. And holding on to this quote from my mom, ‘No means next.’ That keeps me going.”

Lawrence Phillips, another recipient of Black Entrepreneurs Day, said burnout led him to take a risk and quit his lucrative consulting job to travel the world at the height of his career. While navigating 30 countries across seven continents, he said he often found himself nervous about visiting certain areas as a Black man.

“I really could never find a platform that would tell me, from city to city, what it would be like traveling while Black,” Phillips said to ABC News.

By 2018, he launched Green Book Global, a travel platform where users can book trips, read and write reviews, and join a premium membership with discounts and cash-back rewards. Phillips said he drew inspiration from “The Negro Motorist Green Book,” a critical Jim Crow-era guide designed to help Black travelers find safe places accommodations, restaurants, and other services in the United States.

Green Book Global was handpicked by Hilton to receive a $25,000 prize. With this grant, Phillips is all set to overhaul the Green Book Global mobile app and website to make the user experience more seamless.

“Our goal is to increase the confidence and reduce the anxiety of black travelers,” Phillips said. “People don’t always have that many vacation days. They have maybe one or two big trips a year. They don’t have time to have a bad experience. They’re probably going to spend a lot of money, so they want to be sure whatever they encounter is a positive experience.”

He’s excited to build out the company’s community features so users can directly message each other and grow stronger bonds over their excitement for travel.

“It’s empowering, and it adds life to the reviews when you get to know the people behind the posts,” said Phillips. “It’s our hope to drive the company forward and [we] can’t do anything without our community.”

Disney is the parent company of ABC and ABC News.

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(NEW YORK) — A gangbusters job market showed pronounced signs of a slowdown last month, a government report on Friday showed. The fresh data elicited predictions from some economists that hiring could stall by the middle of next year.

The U.S. economy added 150,000 jobs in October, which amounts to solid growth, but only half of the jobs gained during the previous month, the data showed.

Even placed within a wider context, the hiring gains marked a significant drop from the monthly average over the past year.

The unemployment rate last month clocked in at 3.9%, an increase of half a percentage point from a recent low in April. Since that month, an additional 850,000 people are out of work, the report found.

“The job market slowed meaningfully in October,” Julia Pollak, chief economist at ZipRecruiter, said in a statement on Friday, adding that the assessment was backed by “all of the key indicators.”

The new data “explains why job seekers and new hires are feeling more stressed out than they have in over a year,” Pollak noted. “Rising financial strain, paired with declining worker leverage, are taking their toll.”

A slowdown in job growth took hold across wide swathes of the U.S. economy, including leisure and hospitality as well as professional and business services.

The apparent loss of momentum applies to the months preceding October, government data showed, noting a downward revision of the hiring estimates for August and September by more than 100,000 jobs.

Lydia Boussour, a senior economist at consulting firm EY, dubbed the job market’s recent performance an “autumn chill.”

The trend will extend beyond fall, Boussour said, predicting that the unemployment rate would jump to nearly 4.5% by the end of next year.

Preston Caldwell, chief U.S. economist at Morningstar, said he expects the 34-month streak of U.S. job growth to end by the middle of 2024.

The slowdown in hiring last month still amounts to robust job gains. Moreover, in some key sectors, such as health care and government, jobs added in October exceeded the average monthly gains over the past year.

Plus, the overall cooldown in October owes in part to a major auto workers’ strike that remained active last month, accounting to more than 33,000 job losses reflected in the data released on Friday.

Some economists said it remains unclear whether the significant slowdown last month is a one-off blip or a wider trend.

“One tepid jobs report does not a trend make,” Jason Schenker, president of research firm Prestige Economics, said in a statement.

Still, Schenker described the jobs report on Friday as “disappointing,” saying that he expects “more weakness likely lies ahead.”

The jobs data arrives two days after the Federal Reserve opted to leave interest rates unchanged despite stubborn inflation that has fallen from a peak last summer but stalled in recent months at level well above the central bank’s target.

Since last year, the Fed has raised its benchmark interest rate at the fastest pace in more than two decades, seeking to slash price hikes by slowing the economy and reducing consumer demand.

In theory, the economy should eventually falter as it becomes more expensive for businesses and consumers to borrow. But the economy has largely resisted a cooldown.

Gross domestic product data released last week showed that the U.S. economy expanded at a 4.9% annualized rate over three months ending in September. That breakneck pace more than doubled growth over the previous quarter and reinforced other recent indicators of sturdy performance.

Observers, however, point to a rapid rise in U.S. government bond yields over recent weeks as evidence that the Fed’s rate hikes have elevated long-term borrowing costs for consumers seeking mortgage loans and corporations pursuing funds to expand their businesses.

Pollak, of ZipRecruiter, attributed the cooldown in hiring to the interest rate increases and the spike in borrowing expenses.

“The good news is that this slowdown is not due to economic fundamentals, but rather due to careful orchestration by the Fed,” Pollak said. “If it turns out that the Fed and bond markets have gone too far, the Fed holds the keys to turning that around.”

 

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(NEW YORK) — A jury has found FTX founder Sam Bankman-Fried guilty on all charges in his federal fraud and conspiracy trial.

The jury deliberated for a little over four hours before reaching a verdict on Thursday.

“We will have decorum in the courtroom when the verdict is announced,” Judge Lewis Kaplan said before the reading.

Bankman-Fried, 31, sat motionless at the defense table in an ill-fitting grey suit. He was made to stand and face the jury for the reading. He showed no emotion.

Bankman-Fried was charged with seven counts of fraud, conspiracy and money laundering in what federal prosecutors have described as “one of the biggest financial frauds in American history.”

He was accused of using customer deposits on the crypto trading platform FTX to cover losses at his hedge fund, pay off loans and buy lavish real estate, among other personal expenses.

He pleaded not guilty to all counts. With the conviction on all charges, he could face a sentence of up to 110 years in prison. His sentencing was scheduled for March 28, 2024.

As he exited the Manhattan federal courtroom Thursday night, he turned to look at his parents. His mother put her hand over her chest in a farewell gesture, while his father put his arm around her.

With his head down, Bankman-Fried appeared overcome with emotion as he stood between his lawyers, who seemed to comfort him. He nodded slightly as defense attorneys Marc Cohen and Chris Everdell spoke quietly in his ear.

Cohen said in a statement that Bankman-Fried “maintains his innocence and will continue to vigorously fight the charges against him.”

“We respect the jury’s decision. But we are very disappointed with the result,” Cohen said.

U.S. Attorney Damian Williams said the verdict sends a message “to every single fraudster out there who thinks that they’re untouchable.”

“Those folks should think again. And if they don’t I promise we’ll have enough handcuffs for all of them,” Williams said.

Judge Kaplan said a second trial of counts that had been severed is currently scheduled for March 11, 2024.

“I would tell the government to let me know by Feb. 1 whether that’s going to proceed,” the judge said.

Bankman-Fried stepped down from his role at FTX in November 2022 amid a rapid collapse that ended with the company — once valued at $32 billion at its peak — declaring bankruptcy. Prosecutors charged Bankman-Fried the following month with an array of alleged crimes focused on a scheme to defraud investors.

During the month-long trial, the prosecution laid out the case that this was an elaborate and intentional fraud, while the defense tried to deflect blame for the FTX collapse and characterized Bankman-Fried as a naïve math geek.

While testifying in his own defense, Bankman-Fried conceded on the witness stand that he made mistakes but said he committed no fraud.

Bankman-Fried also testified that he only learned two months before FTX collapsed into bankruptcy that Alameda had spent $8 billion of FTX customer funds.

Caroline Ellison, the former co-chief executive of Alameda and Bankman-Fried’s ex-girlfriend, previously pleaded guilty to criminal charges and testified under a cooperation agreement with prosecutors. She has testified that she committed fraud with Bankman-Fried and at his direction.

Ellison additionally testified that Bankman-Fried believed in utilitarianism and thought rules against lying or stealing inhibited his ability to maximize the greatest benefit for the most people.

FTX co-founder Gary Wang also admitted to committing wire fraud, securities fraud and commodities fraud with other people, including Bankman-Fried, during his testimony. Wang agreed to testify under an agreement with the government after previously pleading guilty to fraud charges.

ABC News’ Mark Guarino contributed to this report.

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(NEW YORK) — The cost of doing business in California could soon be slightly more expensive with minimum wages set to increase in April. But what does that mean for menu prices at fast food restaurants that employ hourly workers?

A spokesperson for Chipotle confirmed to ABC News Thursday that as of now, the company has “not made a decision to raise prices in California to offset the anticipated labor increase in California next year.”

However, on the company’s most recent earnings call, CFO Jack Hartung addressed that labor cost changes will impact Chipotle’s margins.

“We’ve been studying that… it’s going to be a pretty significant increase to our labor,” he said.

“We haven’t made a decision on exactly what level of pricing we’re going to take, but to take care of the dollar cost of that and/or the margin part of that, we haven’t decided yet where we will land,” he continued. “It’s going to be a mid to high single digit price increase, but we are definitely going to pass this on. We just haven’t made a final decision as to what level yet.”

McDonald’s CEO Chris Kempczinski, meanwhile, addressed the same issue on his company’s Q3 earnings call Monday, saying it “is an impact that’s going to hit all of our competitors” and that McDonald’s will explore other areas outside of raising prices to offset increased labor costs, which is ultimately at the discretion of franchisees, and can vary by location.

“There is going to be a wage impact for our California franchisees. I don’t think, at this point, we can say exactly how much of that is going to work its way in through pricing,” Kempczinski said. “Certainly, there’s going to be some element of that, that does need to be worked through with higher pricing. There’s also going to be things that I know the franchisees and our teams there are going to be looking at around productivity.”

He added that in longer term discussions with franchisees, McDonald’s sees this as “an opportunity for us to gain share.”

“We believe we’re in a better position than our competitors to weather this. And so let’s use this as an opportunity to actually accelerate our growth in California,” Kempczinski said.

A spokesperson for McDonald’s told ABC News this week, “The assertion that raising prices is the only way the company is responding to wage increases is inaccurate.”

The wage legislation in question, AB 1228, was signed into law by California Gov. Gavin Newsom in late September, and “authorized the Fast Food Council to set fast-food restaurant standards for minimum wage, and develop proposals for other working conditions, including health and safety standards and training.”

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(NEW YORK) — DoorDash is testing a new notification it hopes will encourage customers to leave a tip for delivery drivers.

The delivery giant is rolling out a message to some of its app users that states, “Orders with no tip might take longer to get delivered — are you sure you want to continue?”

“While the vast majority of customers do leave a tip, offers that don’t include a tip can be seen as less desirable — this impacts our entire community, leading to longer wait times for customers, orders sitting longer at merchants, and less value for Dashers,” the company said in a statement.

“I think DoorDash should pay their drivers more and meet their customers, their clientele in the middle,” David Slyder, who has been a DoorDash driver for nearly three years, told ABC News’ Good Morning America. “We use our own vehicles. We put our own gas.”

The move comes four months after a viral video showed a former DoorDash delivery man who was offended by a tip and yelled an expletive at the customer at her home.

Tipping has increased in recent years, especially in the wake of the COVID-19 pandemic that left restaurants reeling for every penny following the government shutdowns; expensive safety protocols and changes; rising food costs; supply chain hurdles; and other factors that raised the overall cost of eating out.

Square, a financial services platform developed by Block, Inc., previously told ABC News that tipping has skyrocketed across the board during the COVID-19 pandemic with tips up over 25% at restaurants and nearly 17% at quick service establishments in 2022.

But even as tip and fee fatigue has grown for some consumers, tipping prompts are popping up in more places.

“COVID caused people to be willing to tip more — but that increase in tipping kind of communicated to businesses, ‘Hey, consumers are willing to tip more. Let’s start asking for it,'” Mike Lynn, a professor of consumer behavior at Cornell University, told GMA.

DoorDash also reiterated that service fees and tips are separate.

“Those fees are shown to the customer before they decide what to tip. It varies by order. Our fees won’t change based on whether a customer does or doesn’t tip, separate thing entirely,” the DoorDash representative said.

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(NEW YORK) — Uber and Lyft agreed Thursday to pay a combined $328 million for withholding money from drivers.

Uber agreed to pay $290 million and Lyft $38 million in what New York Attorney General Letitia James called the largest wage-theft settlement her office has ever secured.

The money will be distributed to cheated drivers who will get back pay along with mandatory paid sick leave and other benefits. Eligible drivers can file a claim to receive the money owed.

From 2014 to 2017, Uber deducted sales taxes and Black Car Fund fees from drivers’ payments when those taxes and fees should have been paid by passengers, the attorney general’s office said.

Uber misrepresented the deductions made to drivers’ pay in their terms of service, telling drivers that Uber would only deduct its commission from the drivers’ fare, and that drivers were “entitled to charge [the passenger] for any tolls, taxes or fees incurred,” though no method to do this was ever provided via the Uber Driver app.

Lyft used a similar method to shortchange drivers from 2015 to 2017, deducting an 11.4% “administrative charge” from drivers’ payments in New York equal to the amount of sales tax and Black Car Fund fees that should have been paid by riders.

Uber and Lyft also failed to provide drivers with paid sick leave available to employees under New York City and New York State law.

“For years, Uber and Lyft systemically cheated their drivers out of hundreds of millions of dollars in pay and benefits while they worked long hours in challenging conditions,” James said in a statement. “These drivers overwhelmingly come from immigrant communities and rely on these jobs to provide for their families. This settlement will ensure they finally get what they have rightfully earned and are owed under the law.”

In addition to paying a total of $328 million in back pay to former drivers, Uber and Lyft agreed to an “earnings floor,” guaranteeing drivers across the state are paid a minimum rate. Drivers outside of New York City will receive a minimum of $26 per hour. Drivers operating in New York City already receive minimum driver pay under regulations established by the Taxi & Limousine Commission in 2019.

Uber and Lyft drivers will now also receive guaranteed paid sick leave. Drivers will earn one hour of sick pay for every 30 hours worked, up to a maximum of 56 hours per year.

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(NEW YORK) — With less than one month until Thanksgiving and the start of the winter holiday season, Americans are already eyeing grocery prices to gauge how much their festive gatherings are going to cost this year.

Experts are encouraging consumers to start making shopping plans early for the holiday feast with a budget in mind, especially with inflation still putting the pinch on wallets at check out.

“It is still sticker shock — this year over last year prices are up about 2.4%, but that’s on top of the 11.4% from the year before that,” Phil Lempert, CEO of SupermarketGuru, told ABC News’ Good Morning America.

This year, major retailers are adjusting their game plans amid inflation in order to keep a traditional turkey dinner more affordable.

Target announced Wednesday that it will be serving up a Thanksgiving meal basket to feed four for under $25, including a turkey at less than $1 per pound, an assortment of sides and desserts under $5.

Starting Wednesday, customers can shop the Target Thanksgiving meal both online and in store that includes must-have staples: a 10-pound Good & Gather Premium Basted Young Turkey (Frozen); 5 pounds of Good & Gather Russet Potatoes; 14.5-ounces Good & Gather Cut Green Beans; Campbell’s Cream of Mushroom Soup; Ocean Spray Jellied Cranberry Sauce; Stove Top Turkey Stuffing Mix; and Heinz HomeStyle Roasted Turkey Gravy.

For shoppers who plan to host a larger feast, Target suggests doubling this list to serve eight guests.

John Furner, president and CEO of Walmart U.S. — the largest retailer in the country — joined Good Morning America last month and, in an ABC News Exclusive, revealed Walmart’s new plan to make Thanksgiving more affordable.

“Last Thanksgiving we decided we were going to sell a Thanksgiving meal at the same price as 2021,” Furner said of the strategy they implemented across other major holidays. “This year, finally, we are able to have the Thanksgiving basket that the prices are coming down versus a year ago — we are really proud to say that the price of a Thanksgiving meal is going to come down.”

This year, the Thanksgiving basket from Walmart includes ingredients to make a meal for up to 10 people, which Furner said will “sell for around $2 less than last year” at just over $70.

Furner added that the move comes on the heels of consumer feedback: “92% of our customers tell us they are concerned about food inflation.”

Inflation is up 3.7% from a year ago and, according to Moody’s Analytics, American households are spending $235 more per month on the same goods and services than they spent a year ago.

Staple items such as ham and potatoes will cost more this year, up 6.9% and 2.7% respectively. Egg prices are back down by 28.8% from last year, now costing $2.07 on average.

“Last year, bird flu caused panic with over 60 million birds having to be cold now, so far it’s only hit about 180,000 birds,” Lempert said. “It could be that turkey is gonna be less expensive this year than in previous years.”

Turkey is now $1.27 per pound, down 22% since the same time last year, thanks in part to a decrease in avian flu that previously sent prices soaring, and thus, has helped produce more turkeys.

As Americans have seen shifts in supply chains, changes in consumer habits and other financial impacts that came out of the pandemic, Furner said “it’s been an interesting couple years — from last year, when inflation really started things like food and consumables picked up and we see more people eating at home.”

“Whether it’s food or getting ready for guest, people are buying early,” Furner also said.

Starting Nov. 1, the holiday food basket at Walmart will be offered at the lower price through Dec. 26. There will be two purchasing options: one with ingredients for customers who want to cook from scratch, and one for customers that like more convenient, ready-to-bake options.

“Walmart’s Thanksgiving meal includes customers’ favorites and fixings including many national brands, from turkey (for under $1/lb.!) and ham to stuffing and pumpkin pie,” a Walmart press release stated.

The holiday meal baskets are available for online order, pickup and delivery, as well as in-store.

Other retailers including Aldi have announced savings up to 50% on a list of 70 Thanksgiving items, including gravy, potatoes and pumpkin pies.

According to experts, one way to help maximize your dollar is to shop early for things that won’t spoil and opting for generic over name brand products.

“Shop early. Make sure you have that shopping list and look at the circulars,” Lempert said of the upcoming “price war.”

“You’re going to see Kroger, Albertson’s, Shop Right — just about everybody else wanting to get our money,” he added.

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