Anxious Shoppers Love Dollar General & Meta Inks Nuclear Deal

0:26Race the rudders!

0:33Good morning Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, McDonald's is bringing back the snack wrap, but this time around, it's got some competition. Then Dollar General is not just surviving, but thriving in the face of economic uncertainty. It's Wednesday, June 4th. Let's ride.

0:55What a time was had at MBD Trivia last night here in New York City. Thanks to the more than 100 of you who came and played along. I feel like so many memories and friendships were made just in the span of two hours. There was this guy who drove in from Fairfield, Connecticut just to hang. The father-daughter duo who was visiting all the way from Arizona. And the time everyone loudly booed Toby for one of his Toby's Trends questions. Just super cool to see the community you've created around this podcast. I think you're confusing those boos with the abject despair. bear your diabolical Neil's numbers category instilled in everyone.

1:30But yes, we certainly want to do more trivia going forward and appreciate everyone who came out. Maybe some virtual Zoom trivias in our future too, so all you outside the city can show us how smart you are. And also, maybe boo my questions. And now a word from our sponsor, LinkedIn Ads. Neil, you ever order food at a restaurant and get the completely wrong dish? I once asked for some medium pad thai and ended up getting it super hot with peppers all over. man, I was sweating. That's what bad B2B marketing is like. You're craving conversions, but oftentimes you end up serving your customers a dish that just isn't what they are looking for.

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3:51Dollar general sales come primarily from households with an income of less than$30 ,000 a year, but when times get tough, the brand also starts to attract more middle and higher income customers. Customer traffic actually dipped, but average transaction amount rose 2.7 % in Q1, showing that customers were selling out more when they did drop in. Its ability to attract value-conscious shoppers is why this business falls in the camp of companies who do well during times of economic uncertainty. It sets up its tent neck to the likes of Campbell's, who reported earnings on Monday, showing a jump in food sales as people opt for microwave chicken noodle dinners rather than going out.

4:30Costco and Walmart are two other businesses who also forecasted strong quarters ahead in the face of adverse conditions. Now, of course, a lot of Dollar General's sunny forecast is also tied to some optimism that it can dodge some tariff-related costs by pressuring suppliers, finding cheaper alternatives, and shifting production. So, Neil, it needs to thread this needle between attracting customers who are searching for deals. So, Neil, it needs to thread this needle between attracting customers who are searching for deals to dodge tariff-related price hikes while also figuring out how to keep their own prices down as well.

5:02Such an interesting snapshot of where we are in the economy right now. Now, Dollar General's first quarter had the highest percentage increase in trade-in customers in four years. That's what the CEO said. And trade-in customers are new customers, those medium, middle, and higher income customers who don't typically shop at Dollar General. They may shop at Target or Walmart or other retailers. But they started to shop at Dollar General at the highest rate in four years because of what's going on in the economy. Maybe they're scared of tariffs or inflation or whatever it is. They're starting to shop at Dollar General, and that's very good for Dollar General because those people have higher incomes.

5:42They spend more per trip, and they just spend more overall than Dollar General's existing customers. So this is an absolute – we talk a lot about companies facing headwinds. This is a huge tailwind for a company like Dollar General. Yeah, Dollar General actually reminds me of this quote from another chief executive of Sam's Club, which we actually spoke about on this show. Chris Nichols, the executive of Sam's Club, said, Through good times, we do well. And through times that are tough, we do even better. And it feels like Dollar General is another business that falls into that camp. It's standing out in the retail industry that has been taking a lot of hits.

6:13If you look around at Macy's, Best Buy, they've all said that they've cut their profit outlooks due to the hit from tariffs. But Dollar General actually joins the likes of Costco and Walmart who raised their outlooks and said, like, hey, we're actually going to thrive in this environment. That being said, though, there are some assumptions that they're making that led to that higher forecast. They're assuming that they're going to face just 30 % tariffs on goods imported from China through mid-August, which is semi a big if because if those tariff pause that Trump has announced actually goes back up to the untenable 145 % tariffs, that throws everything back into chaos again.

6:50So they do have to do a little bit of navigating and be nimble as this tariff environment continues to evolve. And let's give the management team some credit because, sure, they are going to benefit from what's going on externally in the economy. But they have been undergoing some serious renovations at their stores. They've remodeled over 1 ,000. They've opened 156 new ones as part of this something called Project Renovate. And they're trying to make these stores just more nice to go into. And they plan on sort of flipping over and remodeling 20 % of its fleet each year. They have 20 ,000 locations.

7:24So you can do the math. It's going to take a while, but they are making their stores just a more pleasant experience to go into. And that had been a big criticism of dollar stores in general. One reason why you're not attracting higher income shoppers is because they don't want to go in. So if you remodel stores, make them nicer. And also, Dollar General partnered with DoorDash. And they said that this partnership of delivery from Dollar General to higher income shoppers is another reason why they saw this cohort shop more at Dollar General. Let's move on. Another day, another win for nuclear after Meta agreed to a 20-year deal to purchase power from an Illinois plant managed by Constellation Energy.

8:02Meta is a hungry, hungry hippo when it comes to fueling its AI ambitions, having tripled its electricity consumption from 2019 to 2023. Constellation is happy to step up to the plate, giving new life to a Clinton-based plant that was actually slated to close back in 2017 after years of losses. A state credit program stepped in to keep it afloat through 2027, and now Meta is set to take the reins once that support ends, enabling it to expand output at the site by 30 megawatts. Meta isn't alone in its push to boost nuclear power sourcing. The deal comes just eight months after Microsoft inked a similar agreement to purchase energy from Pennsylvania's infamous Three Mile Island plant.

8:44Amazon and Google have also invested in small-scale nuclear projects. And just two weeks ago, Trump signed an executive order aiming to quadruple the country's nuclear power capacity over the next 25 years. Neil, nuclear has positioned itself as a reliable, climate-friendly way to meet the gargantuan power demands from big tech giants, leading to this big groundswell of support. Let's just take a step back. It is crazy to think that you asking a chatbot for tips for your trip to Paris would result in Facebook, Facebook, the company, essentially buying a nuclear power plant in Illinois. And that's because you're right.

9:20These are hungry, hungry hippos. These chatbots, all of this AI industry is gobbling up power like we've never seen before. There's projections out that say AI data centers will consume 12 percent of all American energy output by 2028, just three years from now. It was four percent in 2023. One of the biggest limitations for these companies in pursuing their AI ambitions, which they've bet the farm on, is the availability of power. So we've seen extremely strange bedfellows here between tech companies who used to do social media and nuclear power plants in the rural Midwest coming together. And it seems to be a mutually beneficial partnership.

10:00Yeah, you look at what analysts are saying. A Bank of America analyst recently wrote in a note to clients last week that power remains the biggest constraint on big tech's AI ambitions. He said deployment of data centers with reliable access to high power is as much of a bottleneck in AI deployments as access to chips and systems we talk so much about. Nvidia in the fight for GPUs to train these models, but you also need electricity to power those models, which is where you see this massive push coming from. You're also seeing it on the government side as well. I mean, I spoke about Trump's bill that he just recently signed, executive order that he recently signed, but last year, 25 states also passed legislation to advance and support nuclear energy.

10:42There was the big plant that opened in Georgia last year as well. So there definitely is this groundswell of support around a nuclear as a power source. And I just want to clarify that Meta isn't going to use the nuclear power from this particular plant in Illinois to flow to directly to its data centers. What it's doing is a bit of clever carbon accounting because thanks to the increased power demand that these tech companies used, right now these data centers are mostly powered by natural gas plants. And they want to show shareholders that they are being more emissions-friendly. Nuclear power is zero emissions.

11:20So what they're saying is we're going to be a customer of these nuclear power plants in order to offset the emissions that we're creating through these other data centers that are powered by more emissions-producing power. So it's somewhat a carbon accounting. This power isn't going to go from the nuclear plant to Meta's servers, but it is just a way so they can offset their emissions. The AI startup world just experienced its biggest ever crash. Builder AI, a Microsoft-backed company once valued at$1.5 billion, collapsed in spectacular fashion this month, unable to pay its 1 ,000 employees, and is preparing to file for bankruptcy.

12:01And now, prosecutors are on the hunt for potential fraud. Builder AI was founded in 2016 by Sachin Dev Dougal, a tech entrepreneur who promised to make building smartphone apps as easy as ordering a pizza, no code required. The company raised more than$450 million from heavyweights, including Microsoft, Qatar's sovereign wealth fund, and venture capitalists such as Insight Partners. Dougal took the position chief wizard and was treated as such on the international circuit. As recently as last year, he was named an EY World Entrepreneur of the Year and hosted events with celebrities at Davos. But even as Dougal hobnobbed with the A-list in ski chateaus, cracks were beginning to form in Builder AI's promise.

12:43In 2019, it was accused by a former employee of being essentially nothing more than a smoke and mirrors operation. Media reports found that when it was seeking emergency cash last year, it gave lenders a revenue forecast that was over four times its actual sales, 220 million versus the actual 50 million. And the knockout blow came a few months ago when a creditor pulled cash from its bank account after realizing they'd been duped. Tuggle was pushed out and a new CEO was hired to save the business, but that proved difficult when the new guy learned that the company had, quote, zero dollars to its name.

13:16Toby, this is extremely embarrassing for the AI industry and all those investors, but in hindsight, when you're dealing with a guy who calls himself Chief Wizard, you should maybe be a little skeptical. If the LinkedIn says Chief Wizard, yes, you probably should run. I do think that this is just one of the cautionary tales that has emerged from this funding push that have flown into AI companies. A lot of the reported capabilities of this AI app building service ended up being humans. There were 700 engineers based in India that were supporting a lot of the so-called automated app making. And then also another bit, a financial chicanery that was going on here is that Builder AI was kind of trading revenue with this social media startup in India called Versay.

14:02They were billing each other for roughly the same amounts of money from 2021 to 2024, but then not actually providing the products or services that were supposed to be delivered if you were billing that amount. It's the old, I send you$1 million, you send me$1 million. Congrats, we just both grew our revenue by$1 million each. So you create this illusion of growth. You try to attract more venture capital dollars, which the well was running dry for them. So just a lot of different things going on underneath the service here that led to the collapse of this once buzzy AI startup. And it is a huge setback for the UK AI startup environment because the UK has trailed the US.

14:40Everyone has trailed the US in terms of building AI unicorns. Since 2019, US AI startups have raised$84 billion. UK AI startups have raised $3 billion. So there's that huge gap. And Builder was responsible for so much of that$3 billion for the UK, just a big setback for a country that is trying to catch up to the US and be at the forefront of this technology and their buzzy start. This was the biggest AI startup in the UK and possibly around Europe. It just collapsed in spectacular fashion. I just feel bad too, because I mean, you go back to a few years ago, the former PM, the PM at the time, Rishi Sunak, was pitching London as the global hub of AI regulation.

15:25There was this big buzzy presentation about how they wanted to attract AI talent, but also be the forefront in regulating that AI talent. But then also A16Z made a big deal about opening a London office over there. They busted out this big outpost and then they closed it recently in January, less than a year after they opened it. So you're right, the hits just keep coming for the London and UK tech scene at large. All right, we're going to take a quick break and come back and talk about chicken. Tuesday on NBC, Jimmy Fallon and Bozema St. John hosts the highly anticipated new competition show.

16:02I hired 10 creatives from all walks of life. They will be battling it out to see who can impress the world's biggest brands. This is a huge opportunity. This is the battle for the next big idea. This is not Play Play. We're spending millions of dollars. I'm so excited to embark on this adventure with all of you. Make the best idea win! On Brand with Jimmy Fallon. Series premiere Tuesday on NBC.

16:28When did making plans get this complicated? It's time to streamline with WhatsApp. The secure messaging app that brings the whole group together. Use polls to settle dinner plans. Send event invites and pin messages so no one forgets mom's 60th. And never miss a meme or milestone. All protected with end-to-end encryption. It's time for WhatsApp. Message privately with everyone. Learn more at whatsapp.com. Remember the fast food chicken sandwich wars? They are back, but swap out the bun for a flour tortilla. The great chicken wrap battle of 2025 heated up in a big way yesterday, with McDonald's announcing that its legendary snack wrap will return to US locations on July 10th.

17:13The cult favorite wrap has been nixed in American McDonald's stores since 2016 because it took too long to make, sparking a nine-year, ultimately successful protest by its fans to bring it back. but it's going to have competition. On Monday, Popeyes announced its own chicken wrap coming in three different flavors, trolling McDonald's during its reveal. Meanwhile, Wendy's and Burger King have all sold chicken wraps since 2023, so we've got ourselves a swaddled poultry rumpus reaching every corner of the fast food industry. And it's no coincidence that chicken is once again volunteering as tribute to spur growth.

17:50Fast food chicken sales are almost twice the size of beef and are growing more quickly, not just in the U.S., but all across the world. And restaurants that have focused solely on chicken are growing at a much faster rate than their rivals. Chick-fil-A, for instance, has quadrupled sales in the past decade. Toby, I know you can handicap horse races, but now we need you to handicap the chicken wrap contenders. I mean, I'm not gonna lie. Looking at the Popeye's chicken wrap, it looks a little tough to beat. It's got that crispy fried chicken on the outside. McDonald's, I mean, has been the prince that was promised for so long now, but in its absence just totally fumbled the bag here and let all these new entrants come in and horn in on their territory.

18:30Fans never forgot that OG snack wrap, though. I mean, there is a change.org petition to bring back the item that has almost 19 ,000 signatures that people were still signing just two months ago. So it has been this cult classic thing. I'm a little nervous for McDonald's, honestly, because how can you possibly live up to all the hype and all the longing for this product that has been off menus for a while now, especially when you have to go toe-to-toe with Popeyes, who quite frankly lapsed McDonald's's crispy chicken sandwich with their own sandwich. So I would be a little nervous about McDonald's.

19:06You helped create this hype cycle. Now you've got to live up to it. Meanwhile, you can't ignore the upswell in fast food chicken more broadly. There was a deal on Monday. Roark Capital, P.E. firm that just bought Subway, that just took Subway private, bought a majority stake in Dave's Hot Chicken for an evaluation of$1 billion. Dave's Hot Chicken, which I had not heard about, was started in 2017 in a Los Angeles parking lot. Sales were up 57 % last year to top$600 million. It just got bought out for$1 billion. They focus on these very large chicken tenders with varieties of dipping sauces and various spice levels.

19:46Now, this company is an absolute juggernaut. They're growing by hundreds of locations every year. It seems like any fast food company that leans into chicken can do absolutely no wrong right now. Yeah, 1A is chicken, but I would actually say 1B to that is the fact that it's Dave's hot chicken because spiciness in hot levels, they're doing Nashville-style hot chicken, I think is also driving a lot of younger consumers as well. We've talked about this on the show, how younger people are flocking to spicier meals in general now. So I think that they literally in the Venn diagram of things that are popular right now, you have chicken and you have spicy stuff and Dave's hot chicken falls squarely in the middle of that, which is why it was valued at this pretty staggering number for, you know, a quick serve or a fast food restaurant chain.

20:31Let's sprint to the finish with some final headlines. The bromance between Elon Musk and Donald Trump appears to be going off the rails a little bit after Musk roasted the president's big tax and spending bill yesterday on X. Musk started his tirade by saying, I'm sorry, but I just can't stand it anymore, before going full scorched earth, saying this massive, outrageous, pork-filled congressional spending bill is a disgusting abomination, so who knows how he really felt. The outburst was likely fueled by a couple of things. The legislation in its current form cuts the electric vehicle tax credit that helps sell Teslas, but also according to follow-up posts from Musk, he's most against it because it, quote, massively increases the already gigantic budget deficit burdening American citizens with what he called crushingly unsustainable debt.

21:19So Neil, trouble in paradise after Trump's one-time hype man has just turned on his big, beautiful bill. An absolute bombshell because Elon Musk was the biggest political donor of the 2024 election cycle. And now we don't know what's going to happen going forward. He said he would pull back from politics, but now he has vowed to try to get out all the people who supported this bill. House Speaker Mike Johnson was asked about it. He spoke with Musk on Monday. He suggested that it was because of the EV tax credit going away, which was$7 ,500 for customers of electric vehicles like Tesla. We don't know exactly why Musk is appalled by this bill, but it does add$2.7 trillion through the deficit.

22:03Also, through 2034, just brings into stark relief that this bill is not yet done at all. It passed the House and now it has to go through the Senate. And there are a number of Republicans who oppose this bill, who agree with Musk, like Senator Rand Paul, who said, we are not cutting enough from the original text of this bill. So this, you know, it just brings into relief that the fact that this thing has a long way to go to passage and, you know, Elon Musk just kind of dropped the bomb on everyone there. It is a wildfire season in Canada once more, triggering mass evacuations from Manitoba to Alberta and leading to degraded air quality in parts of the U.S.

22:42as well. Health alerts have been issued in Iowa, Minnesota, Wisconsin and Michigan, as well as parts of the Northeast as the smoke drifts into U.S. territory. Drought conditions have led to over 200 fires burning as of yesterday, with over 100 already out of control, affecting nearly two and a half million acres. In terms of area burn for this time of year, according to Axios, that is second to only the record 2023 wildfire season, which turned skies blade runner orange in parts of New York City. Neil, the Canadian Climate Institute noted that wildfires are getting bigger, hotter, and more frequent in Canada, with this year's wildfire season already shaping up to be one of the most intense on record.

23:22Yeah, there are now 205 fires burning across Canada. 103 of them are burning out of control. many people have been evacuated. And there's a possibility that the smoke from the wildfires from Canada filtering into the United States could mix with the sandstorm that we've talked about yesterday coming from the Sahara in the Gulf Coast. These two factors coming in to create absolutely horrible air quality conditions. It's unclear whether they're going to meet up later this week. But we do know that at least in the northern part of the United States, there's going to be a lot of air quality issues coming today, coming later this evening.

24:00So just be careful out there and we hope everyone in Canada is doing okay as well. Moving on to some lighter stuff, the man who pledged to never give you up or let you down just hit a historic music milestone. Rick Astley's song, Never Gonna Give You Up, has now passed 1 billion streams on Spotify, 38 years after the song debuted in 1987. While it was a hit in its own right back in the 80s, The song found a second life in the 2000s as a bait and switch prank known as Rickrolling, where you click a link thinking it's going to take you to content you actually want to see, only to be directed to the Never Gonna Give You Up YouTube page with that iconic drum fill intro.

24:38We don't have the rights to the song on this podcast, so we can't Rickroll you now, but congrats to Rick on this achievement, one of the great love anthems of our age. The history of this is just so steeped in internet lore as well. Part of the reason why it became such a big thing was back in March of 2007. This feels like a copy and paste of modern times. The trailer for the highly anticipated Grand Theft Auto 4 game was released on Rockstar Games' website, but the viewership was so high that it actually caused the site to crash. So a lot of users started pitching in and hosting their own websites.