P&G’s management reported that the U.S. is holding up very well without a significant shift in consumer behavior in terms of trade-down despite high-single-digit, low-double-digit price increases.
The consumer confidence level has fallen to levels below the 2009 Great Recession, and shockingly, far below the 2020 covid lockdown levels. This certainly has implications for future GDP performance.
Given that omnichannel customers spend 4x more than single-channel shoppers, Foot Locker’s 3Q sales suffered from a return to in-person shopping. 4Q sales are also expected to suffer because of the company’s decision to stop selling Kayne West’s “Yeezy” product line.
Material food price increases are driven by input cost inflation (energy, fertilizer, freight & warehousing) which is aggravating modest harvests that are stressed by droughts and plagues like the Avian Flu.
Hormel’s familiar, cost-effective packaged food brands are performing well both in its retail & food service channels as consumers show resilience so far to its price increases.
We want to spotlight Target this week which provides valuable insight on consumer spending.
BJ’s 3-year stacked same-store-sales increased +8.2% (+8.9% y/y), representing a 3-year comp acceleration from -1.5% in 1Q22 and +4.8% in 2Q22.
Bank of America recently reported that the consumer is in great shape, sending the stock market through the roof.
Impending rate hikes…
Over 1/3 of respondents are relying on borrowing from credit cards or loans and 27% are relying on savings or selling assets to meet their needs.