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Business

Issue: "Iraq: Present and past," June 12, 2004

Pricing power Nearly 60 percent of people surveyed in a recent poll said they expected to drive less this summer because of rising gas prices. But with a gallon of gas surging to an average price of $2.06 last week, true consumer concern is ­difficult to gauge. For example, the American Automobile Association said a record 37 million people hit the road over the Memorial Day weekend with trips of more than 50 miles. And the Recreation Vehicle Industry ­Association expects RVers to make only minor adjustments in their travel plans this summer. These trends are boosted by the report that many Americans will drive to their summer destinations in a new vehicle. New car sales rose sharply in May with large pickup trucks and gas-guzzling SUVs continuing to be popular choices among consumers. One analyst predicted that prices would have to top $3 a gallon before they would have a significant impact on consumer tastes. Still, the popularity of fuel-­efficient, gas-electric hybrid cars is growing. Last month, both Toyota and Honda reported record sales for their hybrid models. Many dealers report waiting lists for the Toyota Prius and Honda Civic models. Video games Blockbuster Inc. has initiated a monthly subscription plan that allows customers to rent an unlimited number of movies and keep two or three at a time without running up late fees. The subscription plan is an attempt to maintain the video-rental giant's position in the marketplace as pay-per-view cable channels and online movie-rental services such as Netflix gain popularity. Blockbuster will charge $24.99 a month for customers to keep two movies out, and $29.99 to keep three titles. That's slightly more than Netflix's monthly fee of $21.99, but the major difference is in the delivery of movies. Initially, Blockbuster will require customers to pick up and drop off VHS or DVD movies at one of the company's 5,000 stores nationwide. Netflix customers can receive up to three DVDs at a time through the mail. The company says it can reach 80 percent of the nation within one business day with its 20-plus shipping centers in the United States. Analysts say Movie Pass is intended to stop Blockbuster customers from defecting to Netflix, but Blockbuster stands to lose revenue from customers who already spend more than $25 a month on rentals and late fees. "It's better to eat your own lunch than let somebody else do it," said David C. Joyce, an analyst with Guzman & Co. Balance Sheet • Shell Oil had to stop the sale of gasoline at more than 500 stations in Florida and Louisiana because high levels of sulfur in the gasoline were making an empty tank appear full. Not only did some drivers run out of gas unexpectedly; many car owners had to replace their fuel gauges. • After months of delay and intense ­lobbying, Chicago city officials approved zoning changes to allow Wal-Mart Stores Inc. to build its first store in the nation's third-largest city. Opponents argued Wal-Mart offered low wages and inadequate health care for its employees, but proponents said the store will provide much-needed jobs in poverty-stricken areas. • One out of every 200 registered 1995 Saturn SLs was stolen in 2003, placing it ahead of the 1998 Acura Integra and the 1994 Saturn SL as the vehicle thieves targeted most. Acura was the nameplate with the most stolen models, followed by Suzuki, Honda, Mitsubishi, and Infiniti. The average stolen car was more than 6 years old. • The United States and five Central American countries signed a free-trade agreement last month that will face stiff opposition in Congress. Many Democrats say that the agreement fails to protect American workers from competition from less-productive, lower-wage workers abroad.

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