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Local Stores Face New Threat; What Not to Buy on Black Friday; Deadly Shooting in Gaza; Post-Sandy Debt and Destruction; Crews Check Plane Safety
Aired November 23, 2012 - 11:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN BERMAN, CNN ANCHOR: All right. Love to shop but hate the crowds? You can shop online and may avoid sales tax in the bargain. Of course you'll have to wait at least a day or two for your stuff but now comes Amazon betting some consumers are willing to pay tax if it means getting faster delivery. Would you believe same day?
Our Dan Simon looks at what this means for you and for your friendly neighborhood merchants.
DAN SIMON, CNN SILICON VALLEY CORRESPONDENT (voice-over): Online versus brick and mortar. It's a battle for your holiday dollars perhaps has never been so intense. For years Internet merchants like Amazon had a key advantage in states like California. No sales tax. Local bookstores already under pressure by the rapid rise of e-books and large bookstore chains, though particularly squeezed.
Michael Tucker owns a chain of bookstores in San Francisco.
MICHAEL TUCKER, BOOKSTORE OWNER: If you can save 10 percent, why wouldn't you?
SIMON: But Amazon's tax advantage recently disappeared in California, adding seven to nearly 10 percent to the cost of each other. It also began taxing this year in other states like Pennsylvania and Texas. Online retailers collect tax only for states where they have a physical presence.
Now here in California, Amazon is building two giant warehouses. Including this one near Los Angeles. It's a million square feet. And for the old fashioned retailers, it's another reason to worry.
(On camera): Why? Because Amazon's goal is to get items to customers faster and to be able to offer same-day delivery. That's right. You can avoid stores if you want and have a package delivered to your house in a matter of hours.
(Voice-over): A win for consumers, but tough for local retailers.
COLIN SEBASTIAN, BAIRD RESEARCH: If Amazon creates distribution centers and facilities on their turf locally that takes away the one advantage that we see retailers have left to compete against Amazon. So it is a big deal. SIMON: Internet analyst Colin Sebastian says that means retailer need to up their game.
SEBASTIAN: Retailers need to take a lesson from Amazon. They need to focus on the consumer experience. They need to become more sophisticated both offline and online.
SIMON: Those who want a lesson on how to thrive could learn from Books, Inc. in San Francisco.
TUCKER: We've had almost everything that comes down the pipe that could flatten an industry.
SIMON: Amidst a tidal wave of change in the industry, Michael Tucker's dozen stores are thriving.
TUCKER: Everybody can get the books. But the staffs that we have really and the readers that we have that are working with the public, that's the difference. That's the different factor we have. Tremendous staff that are engaged with those communities.
SIMON: A basic reminder to all retailers Internet and otherwise that good customer service could be the decisive factor in winning over business.
Dan Simon, CNN, San Francisco.
BERMAN: While you have your eyes on those Black Friday deals investors are keeping their eyes on these big Black Friday crowds for signs of consumer confidence. And here's how the markets are reacting right now. The Dow, having a pretty decent day. Up around 117 points right now. The markets are open for just a short session today. They're going to close at 1:00 p.m. Eastern Time.
Already back home with a car full of Black Friday bargains? If so, are you sure you have the best deal? And if you're getting a late start, you're going to want to listen to this before you head out.
Here's Alison Kosik with today's top tips from the New York Stock Exchange.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Hey, John, with Thanksgiving officially in the rearview mirror, the holiday shopping season is officially in full swing. And up to 147 million people are going to be shopping online or visit stores this weekend. They're going to be looking for a lot of deals. But even with all the markdowns and promotions, you know what? You may not be getting the best deal.
Emily Jane Cox at CNNMoney, she's got a few tips on items to avoid buying. She says, first of all, skip the clothing rack. The 50 percent off sign, it could be tempting but clothes are usually discounted later in the season as stores get ready for spring apparel. Another aisle to skip, believe it or not, the toys. Wait until about two weeks before Christmas because then you'll find cheaper prices as this year's hot toys become old news.
Also avoid buying that big brand name HDTV. If you can, wait until January or February. Prices on those usually fall as manufacturers clear stock to make room for newer models. And last but not least, Christmas decorations. I know you're getting in that holiday spirit, but so is everybody else. So the advice is wait for prices to drop as the holiday gets closer. Of course if you've got the patience, the best time to buy Christmas decorations, John, is after Christmas. So it's kind of planning ahead for the next year if you want to find those discounted decorations -- John.
BERMAN: That takes serious dedication, though.
BERMAN: So, Alison, you mentioned clothes, toys, TVs, and Christmas decorations. What does that -- whap does that leave?
KOSIK: What else is there?
BERMAN: What should you be shopping for today?
KOSIK: Electronics. Electronics. You know what, I'm seeing a lot of good deals on electronics. You know what, you can follow these guidelines, but then again the deals are also out there. You just have to really choose them carefully, I think, John.
BERMAN: All right. Good. It's good because electronics are on my list. So if you're shopping for me, you can buy me anything you want.
KOSIK: There you go.
BERMAN: Alison Kosik --
KOSIK: Get me something while you're at it.
BERMAN: You're the best. Thanks so much, Alison.
Forty minutes after the hour right now. Analysts are expecting the crowds to be smaller compared to last year but spending more. Estimates say that Black Friday sales will reach more than $21 billion this year.
BERMAN: As we mentioned the ceasefire between Israel and Hamas is facing a serious test right now. Israeli troops opened fire in a buffer zone along the border with Gaza, killing a Palestinian man and wounding 19 others. Hamas says the victims were farmers trying to check their land near the zone. Israeli officials say they attempted to breach the fence diving Gaza and Israel. Earlier this morning, I spoke about this incident with Stuart Holliday. He is the former U.S. ambassador for special political affairs in the United Nations. And he's currently the president and CEO of the Meridian International Center, which is a public diplomacy organization.
I began the interview by asking him how troubling the incident on the border is for the ceasefire.
STUART HOLLIDAY, FORMER U.S. AMBASSADOR FOR SPECIAL POLITICAL AFFAIRS to U.N.: At the local level, it's obviously very troubling and there are, you know, lives at stake and there's this delicate balance on a ceasefire. But in the bigger picture, this is -- there's a lot invested in this ceasefire at the political level. And it appears to be at this point more of a typical border incident category kind of problem rather than a directed violation from either side of the ceasefire. And I think that's what we're going to have to watch for, is what happens next.
BERMAN: What critics are looking at this agreement as a short-term fix. A band-aid that will last as long as, say, Hamas manages to rearm and then perhaps start shooting rockets again. Is it naive to talk about a long-term deal? And should the U.S. -- what should the U.S. be doing right now?
HOLLIDAY: Well, the United States, of course, President Obama dispatched Secretary Clinton and she was there when the peace -- when the ceasefire deal was reached. And it signals, I think, a renewed engagement. Even though we have the so-called pivot to Asia, the Middle East obviously still is a vital security interest for the United States. So I think you're going to see a little bit more activity.
In Israel you have election coming up in January. The Palestinian, both factions, Hamas and Fatah, are talking about some sort of coalition. So I think you're going to see some movement obviously at any point the extremists, particularly those that are actually to the -- more radical than Hamas or could seek to destabilize the situation.
BERMAN: You brought up Fatah. And they've been called powerless, impotent a lot during the conflict over the last 10 days or so and criticized, in some cases, by members of Hamas and some Islamists in the region. On CNN yesterday there was a quote from a member of Hamas talking about the Palestinian Authority and Fatah. Let's listen.
(BEGIN VIDEO CLIP)
(BEGIN VIDEO CLIP)
GHAZI HAMMAD, SENIOR HAMAS OFFICIAL: I think people feel now that the only way which can push Israel to go to give concessions is the resistance because President Abbas spent about 20 years in negotiation but they get nothing from this.
(END VIDEO CLIP)
BERMAN: Does the Palestinian Authority have any power anymore to negotiate? Or are they just an empty suit?
HOLLIDAY: No. They do have -- they do have power, but again, they don't have -- you know, the popular support in Gaza that's necessary to enforce or bring any large scale deal along. So it's really a bifurcated government. But if we're going to be negotiated with Palestinians you can bet that Abbas is going to be the key interlock. And what Hamas is doing now, of course, is, you know, a draw for them or a ceasefire is being portrayed to their people as a -- as a victory.
Now I think if you look at the -- you know, the damage inflicted on Gaza, it'd be hard to call that a victory. But they're trying to make hay and trying to get political support.
BERMAN: And of course they lost their key defense chief also.
There was another major player over the last few days here and that's been Egypt and the new leader there, Mohamed Morsi. He's largely credited by the U.S. for helping the ceasefire deal happen. But he did something extraordinary overnight, which he gave himself some new administrative powers, which essentially makes all of his rulings over the last five months and going forward immune from any kind of legal challenges.
Some people are saying this is just the next step in becoming more of a dictator here. Was he taking advantage of the situation?
HOLLIDAY: Well, we'll have to watch this closely. It appears, you know, the timing is curious. He's gotten the support and this bump, particularly for his role in mediating the ceasefire from the United States and from others. He's really seen as emerging stronger from this. But this is an issue that goes back to whether the judiciary in Egypt was really appointed by Mubarak and a check on the executive branch.
And what he said is this is a temporary -- until they have a constitution, a temporary step. So we'll have to see if anything looks like it's being put into place permanently, it could be a big problem for democracy in Egypt.
BERMAN: Our thanks to Stuart Holliday, former U.S. ambassador for special political affairs at the United Nations.
BERMAN: Turkey and football and shopping and napping and napping are Thanksgiving weekend traditions, but so is helping, and that's why members of the Baptist of the Arkansas Baptist Day Convention are hundreds of miles from their own couches and kitchen this week cooking thousands of meals for families stricken by Sandy. The visitors supply the gear and volunteers. The Red Cross supplies the food. And before you can say loaves and fishes, the holiday dinners multiple.
(BEGIN VIDEO CLIP)
JOE BURT, ARKANSAS BAPTIST STATE CONVENTION: We're capable -- Arkansas Baptist State Convention is capable of feeding 40,000 meals, add it with New York, it's another 10,000 or 15,000 meals so conceivably if it needs there we can do -- 55,000 meals a day.
(END VIDEO CLIP)
BERMAN: You know, many of the volunteers are actually using vacation time from work to help out. It's really nice.
Speaking of work, all kinds of family businesses are still drying out, still trying to clean up after Hurricane Sandy. And as we hear now from CNN's Poppy Harlow, many still don't know whether they will survive or not.
POPPY HARLOW, CNN CORRESPONDENT (voice-over): Right before superstorm Sandy, the streets were quiet outside Liberty Industrial Gas and Welding.
ASHLEY MURRAY, LIBERTY INDUSTRIAL GASES AND WELDING: You know, that's in less than 10 minutes.
HARLOW: This is nightfall as the waters begin to rise.
MURRAY: So at this point I think it's gone.
HARLOW: At industrial park in Red Hook, Brooklyn, sandwiched between two bodies of water.
MURRAY: So this is the Gowanus Canal coming into the harbor which is going to meet up with the river. And Liberty is right here. We really had quite a surge because of the Gowanus, you know, and the river essentially meeting in this area and flooding these streets.
HARLOW: Ashley Murray's family business devastated.
(On camera): This is very hard for you personally?
MURRAY: Yes, yes.
HARLOW: And I can see it in your eyes.
MURRAY: Yes. Yes. It's just we're devastated. It's just been a devastating process, and there needs to be a little bit more help.
HARLOW: Do you feel forgotten?
MURRAY: A little bit, yes. Yes. So this was once a really nice showroom.
HARLOW (voice-over): Eighty percent of her inventory gone.
MURRAY: Essentially we have moved everything into our stockroom so that we can work from the sidewalk. So now this is where we are functioning our store from. We have one functioning computer, one printer, and we have people coming in from the roll-down door.
HARLOW (on camera): Before Sandy you didn't have any debt.
MURRAY: Now we're probably looking at $700,000 to $800,000 of debt.
HARLOW: Of debt. What kind of help have you gotten from the government?
MURRAY: Nothing from the government.
HARLOW (voice-over): Ashley found government loans with 6 percent interest. Her bank did better with a line of credit at just over 3 percent.
MURRAY: We had chop saws and boxed items that --
HARLOW (on camera): There goes the lights again.
(Voice-over): The challenge of doing business these days even the generators fail.
(On camera): Things are so bad here in Red Hook that this business right next door to Ashley's is literally drying invoices like this with a hairdryer.
What does this business mean to you?
UNIDENTIFIED MALE: Everything. It's my life.
HARLOW (voice-over): Ashley's employees watched her grow up working along side her father.
(On camera): If this business went under?
UNIDENTIFIED MALE: I would think I would go under, too, you know?
HARLOW (voice-over): Now it's up to her to save their jobs.
MURRAY: There's so much history here. The community. Our customers. I mean, we really do have -- we have a great business here, and I think we can make it great again.
HARLOW: Poppy Harlow, CNN, New York.
(END VIDEOTAPE) BERMAN: So are you heading to the airport in the next few days to fly back home maybe from your Thanksgiving vacation? Well, you will not be alone. Not even close. Twenty-four million passengers are flying, and on the busiest days, that includes Sunday and Monday, flights could be 90 percent full.
Here is a look at the national map. Really nice weather in big parts of the country. Including the northeast yesterday and today. You can see some small storms in upstate New York in the Appalachians.
There's another storm in the northwest that could cause some big-time travel delays later in the weekend. And there, up in the top, you see snow between seven and nine inches of snow, could fall up on my cousins in the UP. Really my nieces and nephews up there. So enjoy the storm up there, guys.
So just how do airport deal -- how do airports deal with the mad dash, all this mess, all these people? CNN's Sandra Endo got exclusive access to Houston's George Bush Intercontinental Airport.
SANDRA ENDO, CNN CORRESPONDENT (voice-over): At the gate the action starts when these wands stop the plane. We got an exclusive up close look at United Airlines' highly choreographed ramp services crew at Houston's Bush Intercontinental Airport. First unloading a flight from Amsterdam. These metal containers are filled with luggage.
ANTWON WARDEN, RAMP SERVICE AGENT: People don't realize there's a lot of processes that go through getting the bag from one destination to another, but we do it proficiently.
ENDO (on camera): Timing is everything when you turn a plane as these guys unload the cargo off the plane. You can see up there catering is restocking the plane with food.
(Voice-over): There's refueling, filling the water tank, and replacing pillows and blankets. BB Chavez watches over it all from a control center at the airport.
BB CHAVEZ, MANAGER, STATION OPERATIONS CENTER: I like to think of myself more of a orchestra conductor. It's a very complex operation. Everybody has a responsibility, everybody has a critical part of the mission.
ENDO (on camera): You have cleaning crews and maintenance checking to make sure everything inside the plane is ready to go for the next flight.
(Voice-over): The pilots arrive while as many as 35 employees continue to ready the aircraft for departure.
(On camera): Workers can see just how long they have to complete their task by the countdown clock over there, and typically it ranges depending on the size of the plane from 40 minutes to about an hour and a half. (Voice-over): I got to climb inside a cargo hold being filled with bags for the flight back to Amsterdam.
SIMI KALASA, RAMP SERVICE AGENT: We stay ahead of the game and get yourself organized and organize everything, you'll be all right.
ENDO (on camera): But it's heavy lifting?
KALASA: Yes, it is. But when you do it so long, you'll get used to it.
ENDO (voice-over): Efficiency is key. The head of operations said it's not only good for passengers, but for company profits.
STEPHANIE BUCANAN, UNITED V.P. HOUSTON OPERATIONS: The faster we can turn an airplane, the sooner we can get it back in the air flying and earning revenue for us.
ENDO: And a little over an hour since it landed, this plane is, again, filled with passengers and ready to go. After a push away from the gate, the ramp crew is done. All that's left is a taxi to the runway and takeoff.
(On camera): Each ramp services team turns around six planes a day per shift, and while speed is certainly a factor, the airline says safety is their number one priority.
Reporting from Houston, I'm Sandra Endo.
BERMAN: And our thanks so Sandra.
Thanks for watching. I'll be back here on Monday. If they don't change the locks. "NEWSROOM INTERNATIONAL" starts right now with Fredricka Whitfield.
FREDRICKA WHITFIELD, CNN ANCHOR: Well, hopefully, John, if they change the locks, they give you a key.