Buy Dollar General for consistency and Dollar Tree for high-risk, high-reward, Jim Cramer says

CNBC’s Jim Cramer on Thursday said investors who value consistency should buy Dollar General while risk-takers should purchase Dollar Tree.

“If you want a consistent operator that doesn’t need to do anything too crazy to beat the estimates, that’s Dollar General. Even though they’re lowering prices, I think that’s a good long-term strategy to win over customers,” the “Mad Money” host said.

“Dollar Tree is more of a high-risk, high-reward turnaround play, where the stock could have a lot more upside if they pull off the execution. But if they screw up, you can kiss your gains goodbye,” he added.

Cramer said that the two companies’ contrasting pricing strategies has helped Dollar General come out on top. Dollar Tree announced late last year that it was raising the prices of most of its products to $1.25 to help offset pandemic-driven costs. 

In contrast, Dollar General said in an analyst call on March 17 that the retailer has “leaned into” its $1 products, including through plans to set up more in-store displays of items at that price point.

“While Dollar General’s pitching this as a move to help their customers, who often struggle to make ends meet, especially if they’re on a fixed income, it has the added advantage of luring away disaffected Dollar Tree customers who don’t like paying an extra quarter,” Cramer said.

Dollar General stock declined 2.13% on Thursday to $222.63. The company reported quarterly earnings in line with forecasts and a miss on revenue earlier this month. Dollar General also forecast better-than-expected full-year sales and raised its dividend by 31%.

Cramer recently highlighted Dollar General as a dividend stock to buy.

Dollar Tree stock fell 0.11% to $160.15 on Thursday, notching a new 52-week high of $162.13 earlier in the day. The company missed Wall Street expectations on revenue in its latest quarterly earnings. 

The host said that Dollar Tree stock has gained overall in recent months and highlighted the company’s executive board changes at Dollar Tree as a reason why. The retailer named Richard Dreiling, a former Dollar General executive, as Dollar Tree’s executive chairman earlier this month due to an activist investor campaign. 

Piper Sandler and Loop Capital Market upgraded their positions on Dollar Tree after the move. “Activist pressure can work wonders, especially if it’s a smart activist,” Cramer said.

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The hot jobs market could mean big gains for March payrolls and wages

A sign reading “sign on bonus” is seen at a Perkin’s Restaurant which is hiring workers.

Paul Weaver | LightRocket | Getty Images

The economy is expected to have added nearly a half million jobs in March, and wage gains also likely picked up at a hotter pace.

Economists expect 490,000 payrolls were added, down from 678,000 in February, according to Dow Jones. The employment report, released at 8:30 a.m. ET Friday, is also expected to show the unemployment rate dipped to 3.7%, from 3.8%

The pace of wage gains is expected to increase to 0.4% over February or 5.5% year-over-year, Dow Jones found. In February, wages were flat on a monthly basis, but rose 5.3% year over year.

“The job market feels like it’s rip-roaring,” said Mark Zandi, chief economist at Moody’s Analytics. “The job market is a machine. It’s been turning over a half million, give or take for a year… We can’t maintain this pace for very long or else we’re going to overheat.”

Zandi said he expects job gains to be made in the industries that have been most disrupted by the pandemic, such as leisure and hospitality but also professional services.

 “Transportation still seems to be pretty hot, certainly the hospitality sector but over the last couple of months, it’s been pretty widespread. We’re seeing jobs gains across most of the jobs sectors,” said Marvin Loh, State Street senior global macro strategist. “I would look at retail because when you get these higher gas prices it’s the consumption categories that get hit first.”

Hiring for a hybrid structure

Tom Gimbel, CEO of recruiting firm LaSalle Network, said he sees no sign from CEOs that the Ukraine war is changing their plans, and they are more worried about inflation and the labor shortage. But he did note the firm’s cybersecurity practice is up over 50% from a year ago. Sales and marketing are the hottest areas for hiring.

“There’s a huge surplus in response in people applying for openings,” Gimbel said. “What that’s telling me is people want to be working, and that’s a little bit of a different shift. People were going for more money, and they were going for work from home.”

Gimbel said now companies are hiring for a hybrid structure, with employees still at home part-time but more often in the office. “We still have companies that are willing to pay for the experienced talent and the wages continue to increase…You’re getting people that are two-years experienced, and they’re getting what two or three years ago they would have gotten with five years’ experience,” he said. “We’re seeing out-of-college salaries really start to balloon.”

Gimbel said for instance, a young professional in consulting may have initially earned $55,000 to $60,000 several years ago, and now could see a salary offer of $75,000 to $90,000. “It’s just that companies are in such short supply of people to do the work,” he said.

Room for growth

In February, total nonfarm employment was still down 2.1 million, or 1.4% from its prepandemic level in February 2020. The participation rate was 62.3% in last month, down from 63.4% in February 2020.

Zandi said the economy still has room to create jobs before reaching full employment. The Federal Reserve has already determined the job market is strong enough for it to turn its focus on fighting inflation.

The Fed raised interest rates by a quarter-point this month, its first hike since 2018, and economists are predicting it could ramp up the pace even more to a 50 basis point, or half-point increase in May. The Fed forecast the equivalent of seven quarter-point rate hikes for this year.

That makes the wage component of the employment report an important focus for markets that have been fixated on inflation.

“I’m expecting a 0.4% increase” in average hourly wages, said Diane Swonk, chief economist at Grant Thornton. “That will give us 5.5% on the year, which puts us back at January levels. They slowed a bit in February so we’ll see a reacceleration in wage growth.”

The hotter wages are filtering into inflation. The consumer price index jumped 7.9% in February and is expected to be high again in March.

“Even though wages are not going up as fast as inflation, there’s no question wage gains are adding to goods inflation and services inflation,” Swonk said. “We’re starting to see it show up in the service sector.”

Regardless of what is in the employment report, the Fed is expected to proceed with its interest rate hike in May.

“Clearly the Fed has already decided that we’re overheating,” said Swonk. “This is a remarkably fast gain in jobs, but it’s faster than the economy can accommodate. If everyone is running at the door at once, people get crushed.”

State Street’s Loh said the March jobs report is not likely to have much market impact.

“From a market perspective, unless it’s a massive surprise to the downside, it’s not going to have a big effect,” he said. “The jobs market is fully healed from the Fed’s perspective… They’ve already signaled that we’re at full employment from a monetary perspective.”

But Loh also said the jobs market could overheat if the participation rate doesn’t improve, which means the number of people actually working in the economy doesn’t expand.

“If we actually end up printing these kind of numbers without people coming back into the workforce, we could collapse that unemployment rate pretty quickly, and that would be a sign of overheating,” he said.

GameStop shares soar more than 10% as company plans stock split

A screen displays the logo and trading information for GameStop on the floor of the New York Stock Exchange (NYSE) March 29, 2022.

Brendan McDermid | Reuters

GameStop shares surged in extended trading Thursday after the company said it planned to implement a stock split.

The video game retailer said it will seek stockholder approval at its next shareholder meeting for an increase in the number of Class A common stock from 300,000,000 to 1,000,000,000 to partly conduct a stock split in the form of a stock dividend.

Shares of the meme stock jumped 17% in after-hours trading Thursday after the announcement.

It was not clear how much of the increased share count would be used for the stock split. GameStop inserted a line in a regulatory filing that suggested part of the increase in shares could be used at some point for other means, possibly selling more stock.

The authorization would also be used to “provide flexibility for future corporate needs,” the company said.

The stock dividend will be contingent on final board approval, GameStop said.

Shares of GameStop have been on a tear this month, up 35%, as enthusiastic retail investors stood by their meme favorite. The stock got a boost earlier this month when chairman Ryan Cohen bought additional 100,000 shares, bringing the activist investor’s ownership to 11.9%.

Still, for investors and analysts hoping for a fundamental turnaround at GameStop, they have largely been disappointed so far as the company revealed little detail about its ecommerce transformation.

Russians hand control of Chornobyl nuclear plant back to Ukraine, IAEA says

A shelter construction covers the exploded reactor at the Chernobyl nuclear plant, in Chernobyl, Ukraine, on April 27, 2021.

Efrem Lukatsky | AP

Russian troops that took over the Chornobyl nuclear power plant last month have transferred control back to Ukraine, the International Atomic Energy Agency said Thursday, citing information from Ukraine.

Multiple convoys of Russian troops in the area have also moved back toward Kremlin-allied Belarus on Ukraine’s northern border, Kyiv told the IAEA.

The Russian forces, which had held the nuclear facility since Feb. 24, “in writing” returned control of the Chornobyl plant to Ukrainian personnel, the IAEA said in a press release.

The agency added that it “has not been able to confirm reports of Russian forces receiving high doses of radiation while being in the Chornobyl Exclusion Zone.”

The IAEA said those Russian troops moved two convoys toward Belarus, while a third convoy left the nearby city of Slavutych, where many of the nuclear plant’s staff live, also toward Belarus.

“In addition, Ukraine reported that there are still some Russian forces on the Chornobyl NPP site but presumed that those forces are preparing to leave,” the IAEA statement said.

U.S. intelligence appeared to back up Ukraine’s information. “We have seen indications that some Russian forces are departing the Chernobyl plant facility,” Pentagon spokesman John Kirby said in a press briefing Thursday afternoon.

“We gather that they are leaving to the north to go back again towards Belarus. But again, indications are not completely clear at this time,” Kirby said.

More than half of young investors have regrets from the last year

Prasit photo | Moment | Getty Images

Many Millennials and Gen Zers who invested in the stock market over the last year wish they had done things differently.

Some 57% of Gen Z investors and 50% of millennials regret how they invested in the last 12 months, outpacing their Gen X and baby boomer counterparts, according to a recent study from MagnifyMoney. The online survey of 1,295 U.S. consumers was conducted from Feb. 15 to 21.

The most common regret among younger investors was not investing more money, with 23% of millennials and 15% of Gen Zers saying they wish they’d socked away larger amounts, the survey found. Investors also regretted some of their specific decisions, such as when they bought and sold certain assets.

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The increased regret could be due to different goals. Younger investors were more likely to say their primary investing goal is to get rich, while older investors said they’re focused on saving for a comfortable retirement.

“If they’re thinking, ‘I can really get rich off of investing,’ then they’re going to regret things like not investing sooner or more,” said Ismat Mangla, MagnifyMoney’s executive editor.

Different goals yield opposite investing styles

Because of these different goals, younger investors are often more aggressive in their strategies, the survey found. While some of this is fine as they have more time in the market to build savings and recoup possible losses, it may also lead to them making riskier choices that they come to regret, said Mangla.

For example, the third-most-likely regret for Gen Z investors was putting too much money in cryptocurrency, the study found.

On the flip side, those closer to retirement are in a very different stage of investing. They’re looking to protect their portfolios during market volatility to ensure that they have sufficient income and savings for retirement.

This is also reflected in popular assets by age – older investors are more likely than their youthful counterparts to have mutual funds and annuities, while younger investors are more likely to invest in cryptocurrencies.

How to avoid regret

To shield yourself from too much investing regret, experts generally recommend starting as soon as possible and coming up with a plan for your money to grow it over time.

“You want to start as soon as you can,” said Shelly-Ann Eweka, senior director of financial planning strategy at TIAA. This is because with more time, you’ll reap greater benefits from compounding, which is the interest earned on your invested money.

Some people may put off investing to prioritize other financial goals, which Eweka cautions against.  

US auto sales forecast Q1 2022 looks bleak due to chips, inflation

New Jeeps are displayed at a car dealership on October 05, 2021 in New York City.

Spencer Platt | Getty Images

Automakers will likely report sharp sales declines for March and the first quarter, industry analysts say, as an ongoing shortage of new vehicles has left car-shoppers with few – and often expensive – choices.

U.S. auto sales forecasts from Cox Automotive, Edmunds, and J.D. Power/LMC Automotive say that first-quarter sales of cars, pickup trucks and SUVs were likely below 3.3 million, down more than 14% from the first quarter of 2021.

For some automakers, the declines may be even worse. Edmunds expects General Motors, Honda, Nissan, and Volkswagen to report year-over-year sales declines of more than 20% for the first quarter, with Ford faring only slightly better.

But while sales are falling, prices are rising: TrueCar analysts said that the average selling price of a new vehicle in the U.S. likely rose 15.4% in March from a year ago, to nearly $43,500.

Consumer concerns about inflation – including higher gas and vehicle prices – likely played a role in the quarter’s projected sales decline, which includes an expected drop of at least 24% in March. But the biggest factor is the thin supply of new vehicles amid a global shortage of semiconductor chips.

“Skyrocketing gas prices were top of mind for consumers in March, but the lack of inventory is what ultimately depressed new vehicle sales in the first quarter,” said Jessica Caldwell, Edmunds’ executive director of insights.

Edmunds’ forecast calls for a 15.2% year-over-year decline in first-quarter auto sales. The company reported that inventories remain very thin, with just 20 days’ supply of gas-powered vehicles and 21 days’ worth of electric vehicles available. Automakers typically aim to have enough vehicles in inventory to last 60 to 70 days.

Not only are automakers still grappling with Covid-related supply-chain disruptions, Caldwell noted, they may now be facing additional supply challenges in the wake of Russia’s invasion of Ukraine.

U.S. auto sales have traditionally ramped up in March as spring weather arrives in much of the U.S., noted Cox Automotive’s senior economist, Charlie Chesborough. He thinks that consumer demand would probably be strong right now – if only automakers had more vehicles to sell.

“Low unemployment, relatively low interest rates — the conditions are right for higher sales,” Chesborough said. But, he said, until automakers are able to boost the number of vehicles on dealers’ lots, sales will remain weak.

“Make no mistake,” he said, “this market is stuck in low gear.”

Amazon renews Prime credit card pact with JPMorgan after flirting with American Express

Jeff Bezos and Jamie Dimon.

Getty Images | CNBC

Amazon has chosen to renew a deal allowing JPMorgan Chase to issue the tech giant’s flagship rewards credit card, ending months of heated negotiations, CNBC has learned.

The Amazon Prime Rewards card was one of the industry’s most highly coveted co-brand deals, a rare prize because of the massive scope of Amazon’s loyalty program, with its estimated 150 million U.S. members, according to people with knowledge of the talks.

While JPMorgan has issued Amazon’s card since it was little more than an online bookseller two decades ago, that didn’t stop Amazon from soliciting bids to replace the bank in mid-2021. American Express and Synchrony were among the issuers involved in discussions, and Mastercard had hoped to displace Visa as payments network, said the people, who declined to be identified speaking about the private process.

“This was a once-in-a lifetime opportunity to penetrate Amazon and have a step change in your card business,” said one of the people.  “If Chase were to lose it, it would be the shot heard around the payments world. Any winner would gain instant credibility and a new growth story for Wall Street.”

Credit card deals with popular brands including Amazon, Costco and American Airlines have become some of the most hotly contested contracts in the financial world. That’s because they instantly give the issuing bank a captive audience of millions of loyal customers who spend billions of dollars a year. The biggest pacts can make up a disproportionate share of an issuer’s business; American Express lost 10% of its cards in circulation when Citigroup won the bid for Costco’s card in 2015.

The card deals are so important to banks that CEOs including JPMorgan’s Jamie Dimon and Citigroup’s Jane Fraser are known to get involved hashing out the transactions, the people said.

Tense talks

Discussions for the Amazon card included JPMorgan’s stance that it could walk away from the two-decade long partnership and sell its loan portfolio, Bloomberg reported in June. Loans made by Amazon Prime customers held at the bank’s Chase division total roughly $20 billion, said the sources. Doing so would ignite an arduous process of switching over millions of customers to a new bank while making sure their cards still worked perfectly.

That may have been a negotiating tactic on the part of JPMorgan, because while Amazon experienced torrid growth during the pandemic as people were forced to stay home, other segments that Chase cards are known for — hotels, restaurants and entertainment — declined sharply. That made Amazon even more important for the biggest U.S. bank by assets.

Despite their importance for banks and to American consumers, who have become obsessed with maximizing card rewards, the contracts themselves are shrouded in secrecy. Amazon required participants to sign non-disclosure agreements and ran its own RFP, or request for proposal, for the deal, largely excluding third-party consultants, said one of the people.

Known for driving hard bargains with partners, Amazon pushed issuers to agree to their terms, said the people. That included maintaining the card’s rich 5% rewards rate for Amazon.com and Whole Foods purchases, while also having to share revenue from making loans, as well as rebate some of the interchange fees that banks would normally keep, said the people.

It is unclear if Amazon was able to negotiate those terms with JPMorgan, the people said.

Longer deals

As big retailers flexed their leverage over banks during the past decade, forcing lenders to accept more onerous revenue-share terms and offer richer rewards, the deals have grown longer in duration. What had typically been five-year contracts have stretched into seven- and ten-year deals, or even longer, according to industry participants, giving the banks a better chance at making money on the cards. For instance, Citigroup’s Costco deal is effectively a decade long, said two of the people.

Several of the banks involved had hopes that they could dislodge JPMorgan for at least part of the business, perhaps by being named as a secondary issuer along with Chase.  American Express and Synchrony have other cards with Amazon, including small business and private label offerings. They and the other banks declined to comment for this story.

Payments network Mastercard sensed an opening last year amid a dispute between Amazon and Visa over the interchange fees the ecommerce giant is forced to pay. Mastercard solicited interest from banks including American Express, seeing if they could partner up to displace Chase and Visa, said one of the people. Conveniently, Visa and Amazon reached a global agreement last month that allowed Visa cardholders to continue using their cards.

In the end, Amazon chose to stay with JPMorgan and the Visa network. The corporate relationship stretches all the way back to 2002, when a Chicago-based lender called Bank One (led by CEO Jamie Dimon at the time) first signed up the promising young internet company to a card deal. Bank One was acquired by JPMorgan two years later.

Dimon-Bezos

Jeff Bezos’ Blue Origin launch New Shepard NS-20 crew to space

The NS-20 crew, from left to right: Gary Lai, George Nield, Jim Kitchen, Marty Allen, Sharon Hagle, and Marc Hagle.

Blue Origin

Jeff Bezos’ Blue Origin launched its New Shepard rocket for the first time this year on Thursday, as the company sends more passengers on short trips to space.

Called NS-20, this New Shepard mission carried a crew of six – former Party America CEO Marty Allen; real estate development firm Tricor International CEO Marc Hagle and his wife Sharon; University of North Carolina professor Jim Kitchen; former FAA commercial space office leader Dr. George Nield; and Gary Lai, the chief architect of Blue Origin’s New Shepard rocket.

Comedian and actor Pete Davidson was previously announced to be flying with the crew, but his seat was turned over to Lai after Davidson became unable to join the mission for an undisclosed reason.

After a handful of countdown holds, to resolve possible issues Blue Origin identified before the launch, the mission launched at 9:57 a.m. ET.

The NS-20 mission also marked Blue Origin’s 20th passenger launched to space with New Shepard since the rocket’s first crewed mission last summer.

Last year Bezos, also founder and CEO of Amazon, said Blue Origin had sold nearly $100 million worth of tickets to future passengers, though the company has not disclosed the price of a seat on New Shepard.

The rocket launched from Blue Origin’s private facility in West Texas, and soared above 100 kilometers — or more than 340,000 feet — before returning to Earth safely a few minutes later. From start to finish, the mission lasted about 10 minutes, with the crew experiencing about two minutes of weightlessness.

New Shepard’s capsule accelerated to more than three times the speed of sound to pass beyond the 80-kilometer boundary, or about 50 miles, that the U.S. uses to mark the edge of space. The capsule is flown autonomously, with no human pilot, and floats down with the assistance of a set of parachutes to land in the Texas desert.

The New Shepard rocket booster is reusable, and returned to land on a concrete pad near the launch site.

Blue Origin also flies New Shepard on cargo missions, such as one held in August, which carry research payloads in the capsule.

This photo provided by Blue Origin, Blue Origin’s New Shepard rocket sits on a spaceport launch pad near Van Horn, Texas, Tuesday, July 20, 2021.

Blue Origin | Reuters

The Fed’s preferred inflation gauge rose 5.4% in March, the highest since 1983

The Federal Reserve’s favorite inflation measure showed intensifying price pressures in February, rising to its highest annual level since 1983, the Commerce Department reported Thursday.

Excluding food and energy prices, the personal consumption expenditures price index increased 5.4% from the same period in 2021, the biggest jump going back to April 1983.

Including gas and groceries, the headline PCE measure jumped 6.4%, the fastest pace since January 1982.

The core PCE increase actually was a touch lower than the 5.5% Dow Jones estimate. On a monthly basis, the gauge was up 0.4%, in line with estimates.

Surging prices dented consumer spending, which rose just 0.2% for the month, below the 0.5% estimate. Disposable income increased 0.4%, a touch below the 0.5% expectation, while real disposable income fell 0.2%. Savings nudged higher to $1.15 trillion, or a rate of 6.3%.

In other economic news Thursday morning, the Labor Department reported that initial jobless claims totaled 202,000 for the week ended March 26. That was an increase of 14,000 from the previous week and ahead of the 195,000 estimate, but still below the level that prevailed prior to the Covid pandemic.

Continued claims, which run a week behind the headline number and count those who filed for a second week, dropped to just over 1.3 million, the lowest level since Dec. 27, 1969.

While the employment picture has tightened, it is inflation that has captured much of the attention as price increases continue.

The Fed has reacted to rapidly surging inflation by tightening policy, with an interest rate increase in March expected to be followed by hikes at each of the remaining six meetings this year.

Goods prices climbed by 1.1% for the month, the fastest increase since October 2021, pressured by supply chain backups that have bedeviled the economy for much of the pandemic era. Those problems were expected to be “transitory,” a description the Fed had to abandon when it finally capitulated on the loosest monetary policy in its history.

However, the price increases flipped in February from longer-lasting goods to shorter-term purchases. Inflation for durables was flat, while non-durable prices rose 1.8%.

Services inflation was held relatively in check, rising just 0.3%.

However, energy prices jumped 3.7% for the month — before abating in March — while food inflation rose 1.4%.

How Google and Amazon bankrolled a ‘grassroots’ activist group of small business owners to lobby against Big Tech oversight

The logo of Google is seen on a building at La Defense business and financial district in Courbevoie near Paris, France, September 1, 2020.

Charles Platiau | Reuters

Clay Montgomery owns a small blacksmith shop called “Arrow M Enterprises” outside of Mingus, Texas, where he manufactures hand-forged metal works and grilling tools. He also sells a spicy barbeque sauce and a meat rub called “Bite My Butt.”

In recent years, Montgomery’s blacksmith shop has been listed as a member of a Washington, D.C.-based trade group called the “Connected Commerce Council” that claims to lobby on behalf of small businesses. On its website, the council describes itself as a non-profit membership organization with a single goal: “to promote small businesses’ access to essential digital technologies and tools.”

The group, which campaigns against aggressive regulation of big tech companies, also says it wants to ensure “policymakers understand the essential intersection of technology and small business,” according to its website.

But there’s just one problem: Montgomery says he’s not a member and, in fact, has never heard of the Connected Commerce Council. The blacksmith told CNBC he would never join a tech lobbying group in Washington. “Technology is not exactly my forte,” he said.

Montgomery isn’t the only small business owner bewildered to find their names listed as a member of the Connected Commerce Council, which also goes by “3C.” More than 20 other “members” contacted by CNBC said they similarly had never heard of the council and did not know why they were on their membership list.

The council, which pitches itself as a grassroots movement representing small business owners, is actually a well-financed advocacy group funded by tech heavy hitters Google and Amazon. The two tech companies are listed as “partners” on the organization’s website. They are also currently the council’s sole financial support, 3C spokesman Chris Grimm confirmed to CNBC.

‘Astroturf’

Lobbying watchdog group the Campaign for Accountability called 3C an “Astroturf” lobbying organization, thanks to the tech giants’ financial support. That’s a bit of Washington slang for a group that claims to represent grassroots entities, but in reality serves as an advocate for big industry. It’s a tactic used in Washington to push for specific legislative or regulatory goals using the sympathetic face of mom and pop organizations. The Campaign for Accountability described 3C in a 2019 report as an “Astroturf-style front group for the nation’s largest technology companies.”

“Big Tech knows that voters and their representatives aren’t hugely sympathetic toward the complaints of trillion-dollar corporations, so they’ve decided to paint small businesses as the real victims of antitrust legislation,” said Michelle Kuppersmith, executive director of the Campaign for Accountability.

To be sure, the group does have some active small business members, several of whom told CNBC they value 3C’s offerings and agree with its issue advocacy in Washington.

Small business owners like Michelle Thom, owner of and a stylist at “A Wild Hair by Michelle” salon in St. Clair, Minnesota, are considerably more sympathetic to members of Congress than wealthy technology executives. The Connected Commerce Council listed her company on its website as a member, but Thom told CNBC she had never heard of the group and her business should not be on its roster.

The owner of Bud’s Barbershop in Wylie, Texas, who declined to give his name, was similarly listed as a member even though he said he has never heard of the group.

Christine Little, whose company, 1058 Auto and Towing in Swansea, South Carolina, was also listed as a member, said she didn’t know anything about the council either. “I’m pretty sure I’d probably remember” joining the group, she told CNBC. “We just tow.”

Partners

And it’s not just small firms that told CNBC they aren’t sure why they were listed on the 3C website. Until this week, the council also had a page on its website listing its “partners” – companies that the website suggested support the council’s efforts. That page featured the logos of three tech giants: Amazon, Google and payment processor Square, which recently changed its name to Block.

But Block, which was created by Twitter founder Jack Dorsey, told CNBC it was not actually a partner of the Connected Commerce Council, despite the listing on 3C’s website. The Connected Commerce Council pulled Square’s logo from its website on Monday after CNBC contacted Block, which said it asked 3C to remove its name.

Grimm said 3C removed Square’s logo Monday after CNBC’s inquiry because Square is “no longer an active partner of the Connected Commerce Council.” 

In a statement to CNBC, Connected Commerce Council Executive Director Rob Retzlaff said all of the group’s members “affirmatively sign up – at events, online, or through a personal connection – and thousands have opened emails, responded to surveys, attended meetings and events, and communicated with legislators.”

Retzlaff said, “I sincerely hope you do not (a) mischaracterize our efforts or the views of small businesses by suggesting we are an astroturf organization that puts words in people’s mouths, or (b) use outdated membership information to distract readers from legitimate concerns of small businesses and their engagement with policymakers.”

In February, the group also quietly removed a list of thousands of grassroots members from its website. Grimm, the council’s spokesman, said it pulled the list because it fell behind in updating its member list. He said the group has more than 16,000 current members but did not provide a current list of them.  

Free membership

The Connected Commerce Council does not charge fees to its members or bill them for services, Grimm said. It is not clear whether the group has any sources of revenue beyond donations from the large technology companies. Documents filed with the IRS show the group received more than $1.6 million in revenue in 2018. That year, it spent more than $100,000 on a strategic communications firm in Washington.

Spokespeople for Google and Amazon both confirmed that the companies are affiliated with the Connected Commerce Council. They declined to say how much the companies donate, but they did not deny donating.

Facebook was also listed as a partner of 3C as recently as 2020, according to The Washington Post, but has since discontinued its involvement, according to a person familiar with the decision who requested anonymity to speak more candidly. A spokesman for Facebook’s parent company, Meta, declined to comment or answer questions about how much money the company has previously given to 3C.

The Connected Commerce Council has been active in shaping the debate around antitrust regulation in Washington. It’s worked with an outside lobbying firm, called the Majority Group, for several years to advocate on small business and technology issues on Capitol Hill. In 2021, the group spent $400,000 on lobbying, according to the Center for Responsive Politics. In 2018, the Connected Commerce Council offered public comment to the Federal Trade Commission on antitrust issues, arguing that large technology platforms such as Amazon and others provide benefits to small businesses.

Google spokesman Jose Castaneda sent a statement when asked about the company’s involvement in 3C. He said many small businesses are concerned “that Congress’s controversial bills could harm the digital tools that they have relied on to adapt, recover and reach new customers throughout the pandemic. We encourage concerned businesses and the organizations that represent them to ask Congress to consider the unintended consequences of these bills for small businesses across the country.”

The Connected Commerce Council, which has just 304 followers on Facebook, has been an active advertiser on the platform since its page was created in 2018. Since then, it’s spent more than $600,000 on advertising in that time, including more than $9,000 in the last week, according to the company’s advertising library, which discloses the sponsors and advertisements in such campaigns.

The ads sponsored by the Connected Commerce Council often support the same positions as the large tech companies that bankroll the group. The tech giants have also been advocating against several bills on Capitol Hill that would impose antitrust rules on the tech firms or make it easier to break them up altogether. One bill, for example, would block companies, including Amazon and Google, from pushing their own products in online marketplaces at the expense of their own competitors.

‘Amazon helps our members’

“Don’t let Congress give away America’s technological edge. Send a letter,” reads one ad sponsored by the Connected Commerce Council in March that’s been viewed more than 125,000 times, according to Facebook. A message in the same ad reads, “Harmful legislation in Congress will weaken America’s economy and threaten our small businesses.”

Another ad running in March refers directly to Amazon, which is one of the companies that finances the Connected Commerce Council. “Amazon Marketplace is at risk,” the ad says. “Take this survey and stand up to Congress.” The advertisement, which Facebook says has been viewed more than 8,000 times, also asks: “Are you a small business seller? We’re counting on your experience to help fight harmful legislation in Congress.”

An online survey run on Facebook by the council tells Amazon Marketplace users, “As you may be aware, some elected officials think Amazon is too big, and that is dangerous because we know Amazon helps our members and millions of small businesses sell more products and make more money!”

The council runs like a well-oiled advocacy group. By 2019, 3C’s lobbyists had met with 50 members of Congress, filed seven official comments at regulatory agencies and sent two representatives to testify before Congress, according the Campaign for Accountability’s 2019 report. The council also “published a raft of materials painting a rosy picture of the tech giants, complete with quotes from small business owners heaping praise on them,” the report said.

“For the Connected Commerce Council to succeed, it needs to convince legislators that it’s truly advocating on behalf of the more than 10,000 small businesses it claims to represent,” said Kuppersmith, executive director of the watchdog group. “However, when you start to peel back the curtain on the organization just a bit, it’s clear that this image of enthusiastic antitrust opposition is fueled by Big Tech cash.”

Great resource

The group pointed to plenty of small business owners who are legitimate members. Former 3C board member Mimi Striplin founded the Tiny Tassel in Charleston, South Carolina, which sells jewelry and accessories.

“They’re a great resource as a small business to get access to digital tools,” she says of the group. 3C “keeps me informed about new bills being passed.” Striplin said new antitrust laws could negatively impact the affordability of the digital tools she depends on, such as social media and software to make her products more visible on Google.

Facebook Chief Operating Officer Sheryl Sandberg speaks during an event on the sidelines of the World Economic Forum in Davos, Switzerland January 23, 2019.

Reuters

Striplin’s small shop caught the attention of Sheryl Sandberg, chief operating officer of Meta. In 2020, Sandberg designated the Tiny Tassel’s earrings as one of her personal picks for Facebook’s #BuyBlack Friday gift guide, which encouraged users to support Black-owned businesses. Striplin said the selection of her products by Sandberg was not connected to her membership in 3C.

Current board member Salil Gandhi operates a social media and digital marketing company called SBO Buzz in Chicago. He said the group provided a valuable platform for small business leaders during the Covid pandemic, including offering a regular Zoom happy hour for 15 to 30 small business owners to check in on each other.

“We would get together and have a cocktail and talk about problems we were having, PPP issues, or other problems we were having as small business owners,” Gandhi said. “I’m still friends with a lot of the people I met through there.”

Gandhi said he doesn’t mind that the small business advocacy group is largely funded by big tech companies because small businesses already depend on Google and other firms for free tools to run their operations, including Gmail accounts. “When I look at issues, I look at them from my perspective,” he said. “It’s not like anybody’s ever telling me what to say or what’s going on.”

Council member Alfred Mai, who founded ASM Games with his wife in 2017, said he relies on Amazon to sell his products and agrees with the group’s push against antitrust initiatives in Washington. The company sells card games for social gatherings, including games called “These Cards will Get You Drunk” and “Do You Really Know Your Family?” He says Amazon has been crucial to the success of his business.

“These antitrust, quote unquote, ‘break up Big Tech’ bills can critically affect my business,” Mai said. “This really isn’t just about Big Tech it’s also about small business.”

He said he worries about unintended consequences of congressional action and the possibility that Amazon might be forced to shut down its third-party marketplace site, where he sells his card games.

“I’m not sitting here being brainwashed by an Amazon lobbyist telling me ‘this is what you should believe,'” Mai said. “I truly believe it.”

 — CNBC’s Bria Cousins and Paige Tortorelli contributed to this report.