and lay our customer map on top of it, we'd be really close to the same thing," Biggs said. "If you look at the demographics of the U.S. On the other hand, he said, some customers have sprung for new patio furniture or eagerly chased the flashy new gaming console, he said. Some traded down to cheaper brands or smaller items, including half-gallons of milk and the store brand of lunch meat instead of a pricier brand-name one, Chief Financial Officer Brett Biggs told CNBC. More of them skipped over new clothing and other general merchandise as they saw prices rise on gas and groceries. But in the most recent quarter, the nation's largest retailer said shoppers are showing they are mindful of the budget.Ĭustomers walked out of stores and left the retailer's website with fewer purchased items. Walmart is seeing a mixed picture, shaped by consumers' household income and how they feel about the future. Here's what Walmart, Target, Home Depot and Lowe's are telling us about the state of the American consumer.
Or they'll seek out discounted goods at shops such as TJ Maxx. But the concern is that consumers will be forced to make trade-offs, somewhere, in order to afford these things. These companies that rely on consumers coming inside their stores to splurge on new clothes or shoes could be particularly pressured, as Walmart hinted that shoppers were beginning to pull back on discretionary items to budget more money toward groceries.Īt the same time, retailers are citing an uptick in demand for items such as luggage, dresses and makeup as more Americans plan vacations and attend weddings. The results this week could foreshadow trouble for a number of retailers, including Macy's, Kohl's, Nordstrom and Gap, which have yet to report results for the first quarter of 2022. inflation being this high and moving so quickly, both in food and general merchandise, is unusual," Walmart Chief Executive Officer Doug McMillon said Tuesday on an earnings conference call. "While we've experienced high levels of inflation in our international markets over the years, U.S. That includes inflation at 40-year highs, Russia's war in Ukraine and a still-crippled global supply chain. Multiple rounds of stimulus dollars fueled spending on new sneakers and electronics.īut as that money dries up, retailers must navigate their new normal. Companies and consumers are in an uncharted transition period following months of Covid-related lockdown measures that prompted purchases of canned goods, toilet paper and Peloton Bikes to soar. The mixed commentary from these retailers is in large part due to the fact that Americans are experiencing economic volatility differently, dependent upon their income levels. (Shares of both home improvement chains closed Wednesday down about 5% amid a broader market sell-off.) We are not seeing the sensitivity to that level of inflation that we would have initially expected," Home Depot CEO Ted Decker said Tuesday on the company's earnings call. Home Depot and Lowe's, though, have seen more strength among shoppers in recent weeks. On Wednesday, Walmart fell another 7%, while Target had its worst day in 35 years.
Walmart closed Tuesday down 11.4%, marking its worst day since October 1987. Analysts and investors didn't anticipate that the two big-box retailers would take such a massive hit to their profits in the latest period as supply chain costs weighed on sales and unwanted inventory, such as TVs and kitchen appliances, piled up. Still, expectations on Wall Street were higher this week for both Walmart and Target. The reports came after Amazon in late April flashed warning signs for the retail industry when it booked the slowest revenue growth for any quarter since the dot-com bust in 2001 and offered up a bleak forecast.
THE HOME DEPOT PROFESSIONAL
Walmart said some of its more price-sensitive customers are beginning to trade down to private-label brands, while Home Depot emphasized the resiliency among its customer base, a sizable percentage of which is professional home builders and contractors.
0 kommentar(er)
