So, as we head into the important end-of-year holiday shopping season, should we really be paying attention when Walmart Inc. says it’s being “more cautious on the consumer than we were 90 days ago at this time” and that there was a “sharper falloff” in sales during the last two weeks of the fiscal third quarter that ended October 31? The answer is most definitely yes.Despite its reputation as the retailer of choice for lower income households, Walmart’s customer base is more diverse and looks a lot like the US population overall, having found success at attracting more upmarket customers. As America’s biggest retailer, more than $1 out of every $5 spent on in-home food and drink in the US goes through its tills, according to Bloomberg Intelligence. Add in non-food and its share is even larger. That gives it a great read on the consumer. Little wonder then that Walmart shares tumbled 8% on Thursday after the company provided its downbeat review.
And Walmart isn’t the only retailer to raise questions about the strength of consumer demand last week. Target Corp. on Wednesday said it was continuing to see declining sales of the things that consumers simply want but may not actually need, such as clothing and home furnishings, although there had been an improvement from the second quarter. One particular shopping trend highlighted by Target is worth noting. Chief Executive Officer Brian Cornell said consumers were holding off from making many purchases until the last minute. For example, they didn’t buy winter clothing until the weather turned cold, which was a departure from recent habits. Cornell didn’t exactly say it, but this is classic recessionary behavior.Then there was Home Depot Inc. The home-improvement retailer cautioned Tuesday that consumers continue to cut back on big, expensive items. Bloomberg News reported that the analysts at Evercore said this in reaction: “Consensus estimates for 2024 are too high for Home Depot and most of our home-improvement-related names.” German meal-kit company HelloFresh SE saw its shares plunge 22.4% Thursday after cutting its earnings outlook, partly due to fewer new US customers. Not even the luxury market is immune. Britain’s Burberry Group Plc joined a number of high-end retailers to highlight continuing weakness among the simply comfortable, rather than super-rich, with Americas comparable store sales falling 10% in the three months to September 30.What is really going on? Nobody knows for sure. Even Walmart Chief Financial Officer John David Rainey said he couldn’t put his finger on exactly what had happened in the second half of October. Slower inflation should be bolstering household spending power for most goods and services. But Americans are now living with the highest borrowing costs in a generation and dwindling bank accounts, as evidenced by a historically low 3.4% savings rate.Meanwhile, federal student loan payments resumed on October 1คำพูดจาก สล็อตเว็บตรง. Apollo Global Management Chief Economist Torsten Slok noted in an October 24 research note that the government’s Household Pulse Survey show a jump in the percentage of consumers saying they are having difficulties paying their household expenses. Not only that, but the difficulties were concentrated among households with a college degree, making between $50,000 and $150,000 a year. Perhaps the real question is why consumer demand was stronger for longer than most anyone expected. Maybe it’s as simple as it just took time for the pandemic era’s supercharged spending habits to coolคำพูดจาก สล็อตเว็บตรง. Take meal kits. Although consumers may have initially been content to continue paying for them once they returned to offices and restaurants opened again, increasing pressure on their disposable incomes forced them to cut back somewhere. Goodbye meal kits. And there may be another reason for October’s slowdown in spending that Walmart cited. Travel surged over the summer and Americans sprang for high-profile concert tickets and events. Credit-card bills will have needed to be paid throughout the fall. Back-to-school spending may also have stretched budgets. At the same time, some Americans might have retrenched to ensure funds were available to take advantage of Black Friday retail bargains. Keep an eye on what is likely be a stand-off between retailers and shoppers. Store chains have worked through their mountain of inventory, so don’t need to discount as aggressively as last year. But consumers know that inflation is easing, and will be looking for bargains. All in all, the National Retail Federation expects November and December sales to expand a modest 3% to 4% over 2022.In that sense, it’s possible the deceleration that Walmart identified turns out to be just a blip. Rainey said the sales slump coincided with a period of unseasonable weather, and demand had picked up in November, spurred by promotions and the arrival of new seasonal products in stores. Betting against the American consumer has been a losing proposition this year. The next few weeks may determine whether the game has changed. .