Marriott reported that consumers are seeking experiences more so than goods, whether that be music concerts, professional sports games, or youth athletics. While the desire for experiences was more prevalent among younger demos pre-covid, this trend now spans all generations according to data from its credit-card partners.
Home Depot reported that the worst of the inflationary environment is behind us and that retail prices are stabilizing with some prices settling at levels higher than 2022 & others settling lower.
Tyson reported that consumer demand for protein remains relatively stable and while its 4Q beef & chicken volume declined, volume for its Prepared Foods segment increased slightly (outperforming the majority of food & beverage peers which saw volume declines). Are consumers on a diet?
The Federal Government’s financial condition could be better! We are running annual spending deficits that are approaching $2 trillion (up from the CBO’s May 2023 estimates) which will add to outstanding debt which exceeded $32 trillion at the end of 2Q23. Our annual tax revenue is under $5 trillion, and it is estimated that higher rates mean that the government will incur $1 trillion in annual interest expense (representing 20% of the government’s revenue) also up from the CBO’s estimates. Hard asset investments like gold are looking good right about now…
The TJX Companies is the largest brick-and-mortar off-price retailer in the world which benefits from one of the most flexible business models in retail, allowing the company to buy close to need by quickly adjusting its store assortment to meet changing consumer preferences. A curated store mix appeals to shoppers across all income demographics & the company continues to attract an outsized number of Gen Z & millennial shoppers to its stores. Finally, TJX’s sales strength reflects a 20% to 60% price advantage compared to other retailers who have been increasing their prices.
View Consumer Research Weekly Report for the week ending 11/22/23.
While the consumer continues to benefit from a high level of employment, healthy raises & some cost relief in the form of lower inflation & gas prices, significantly higher borrowing rates are driving an increase in credit card delinquencies & personal bankruptcies.
Target reported that although consumers are incredibly resilient, research reveals their uncertainty, caution, and increased time & budget management. In any case, management is dissatisfied with its top-line trends, with promises to invest in long-term initiatives to drive sustainable traffic & sales growth. Further, the company currently seeks to support sales by highlighting its promotions & featured price points.
Walmart is working hard to lower grocery prices to help ease holiday consumer pressure driven by: elevated food prices that are not deflating fast enough (particularly as it relates to very high meat prices); tightening bank credit; a return to pre-covid debt levels; & the resumption of student loan repayments which affects 27MM Americans. In any case, Walmart is encouraged by traffic trends which were strong & consistent throughout 3QFY24.
Nobody wants wars! There must be a better way to settle land/territory disputes like we see in the Ukraine, Gaza & Taiwan. History shows that these disputes are almost always settled by military might which costs far more than just the price of armaments when the terrible loss of life & suffering is factored in. A market-based solution would be much better…