There’s been a lot of discussion about the economic effects of consumer spending and consumer confidence lately. According to one article I read, there have been signs of spending fatigue and a shift from discretionary products to more essential products. On the contrary, despite the slight decrease in inflation month over month (March to April), recessionary indicators seem to still be looming and yet consumer confidence increased in May. These are confusing times for not only investors and economists, but the US consumer as well. Trying to live as you did just a few years ago in a pre-pandemic world is costly today. The impact of increasing mortgage rates, rising rental costs, escalating grocery bills, are finally catching up to consumers who are now carrying record high household debt into this new year. What does this mean for our industry and others? Consumers are going to continue to be price conscious going forward. Are they still spending, yes, but not at the rate they previously were and acquiring our share of wallet is going to be more of a challenge than in past years. Large retailers like Walmart, Target, and others are slashing pricing to drive more opportunity. We too are going to need to stay creative, promotional, and conscious of our inventories. A question we all need to ask ourselves, is this the same ole’ summer slump or is this a sign of something different, a change in our consumer behavior? |
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