What we know so far about consumers

Summarize this content to 100 words A customer walks through a Home Depot store on February 20, 2024 in Austin, Texas. Brandon Bell | Getty ImagesThe consumer picture of 2024 is already starting to take shape even before the nation's largest retailers begin reporting first-quarter earnings. home depot and walmart next week.There are signs that U.S. consumers are still spending, especially on experiences. However, persistently high prices are putting pressure on low-income consumers, putting pressure on everyday purchases and corporate profits.Broadly speaking, credit card companies are: american express, visa and master Card It described spending trends as “relatively robust,” “relatively stable,” and even “healthy.”Something like a payment company PayPal and block We continue to see strong trading volumes and payment growth.Airlines and hotels are With a strong travel season ahead, Especially when it comes to international destinations. morgan stanley's Michael Wilson points out that “one-third of consumers prioritize travel over any other purchase or service.”In fact, Morgan Stanley research shows that 60% of U.S. consumers are planning a summer vacation this year, and of those who travel, more than half of them expect to spend more than they did last summer. Only about half.price line parent Reservation held Analysts told analysts there is no sign that consumers are cutting their vacations shorter or reducing their hotel choices. caesars He said overall spending at Las Vegas casino resorts remains strong.What's more, cruise lines are seeing record bookings despite soaring prices. Passengers also have free time on board, despite having to pay significantly higher prices for food and drinks.Royal Caribbean's Icon of the Seas, the world's largest cruise ship, entered the Port of Miami on January 11, 2024. Mike Stocker | Tribune News Service | Getty ImagesConcerts also remain popular tickets, even if they are expensive. live nation “Compared to last summer, there is no problem with fan demand at all,” he said, adding, “Global fan demand is stronger than ever.”everyday shoppingBut economic headwinds such as rising grocery costs, rising mortgage rates and declining government rebates appear to have made consumers more nervous when it comes to discretionary items and everyday purchases. The situation is different.As an online artisan marketplace Etsy In other words, “consumers' wallets remain so tight that they often have little left after paying for food, gas, rent, and childcare.”Amid economic uncertainty, consumers are putting off large home purchases, and Home Depot and lowe's This month's results report.wayfairWhich Results will be reported on Thursdaytold analysts that the big-ticket category “remains depressed” and it's unclear when demand for home furnishings will improve. stanley black and decker issued a similar warning, saying the “weakness in consumer and DIY demand” was the result of “a degree of consumer and end-user hesitancy towards high-ticket items.”swirlis also experiencing difficulties in selling home appliances.and Pool Co., Ltd. One of the country's largest pool supplies retailers said pool maintenance spending has been “stable” but high interest rates have slowed pool construction and discretionary purchase growth.Consumers have also become more discerning about how often and where they eat out.Restaurant sales for the quarter Much to the dismay of Wall Street during the transportation battles.The Stars Coffee logo will be displayed on the mobile phone screen, and the Starbucks logo will be displayed as an illustration photo in the background. August 23, 2022, Krakow, Poland. Starz Coffee, owned by pro-Putin rapper Anton Pinsky, has opened a chain of coffee shops in Russia, replacing Starbucks Corp., which withdrew from the Russian market in March following Russia's invasion of Ukraine. (Photo by Beata Zawrzel/NurPhoto, Getty Images)Beata Saurzernul Photo | Getty ImagesStarbucks CEO Laxman Narasimhan told the analyst. “We continue to feel the impact of more cautious consumers, especially among our infrequent customers. We also continue to feel the impact of the worsening economic outlook weighing on customer traffic, which has an impact on the industry. It's widespread across the board.” mcdonalds He added: “Consumers have certainly become very discriminatory in how they spend their money.”price sensitivityWhat this earnings season has made clear is that U.S. consumers are becoming increasingly price-sensitive, especially when it comes to everyday purchases. bank of america's Savita Subramanian points out that “consumer rifts are emerging,” especially among low-income groups.Here are just a few of the companies warning about price sensitivity:both coca cola and pepsico observes a change in consumer behavior, particularly in the pursuit of value at the low end.meat producers tyson foods He told analysts that cumulative inflationary pressures have “created a more cautious and price-sensitive consumer” and that there has been “some slippage into private labels for lower-income households.”hershey stated that “consumer value-seeking behavior'' continues.Owner of Special K and Pringles Keranova Prices were 5% higher than a year ago, resulting in elasticity pressures and North American volumes were down 5%.Parent company of Burger King and Popeyes restaurant brand “We've seen consumers become a little bit more price-sensitive and as a result check growth has slowed.”shoe and apparel manufacturers steve madden frankly stated, “There are still customers who are price-sensitive,'' pointing out that outlet stores are outperforming regular-price stores.Consumer weakness in the lower price range can create problems for discounters such as: dollar general and dollar tree as well as off-price retailers such as TJX, Ross store and Burlington stores When everyone reports their earnings in the next few weeks.Amazon succinctly describes the new normal. “Customers are shopping, but they're staying cautious, lowering prices and seeking deals wherever possible.” Etsy shared a similar sentiment. “Consumers are feeling so much pressure that they want value, big discounts and big promotions.”Profit pressureAs a result, companies are now forced to compete for consumers' money through promotions and deals. Some have had success, at least in the short term.shake shack said that sales improved from February to April thanks to effective promotions and offers. domino pizza said a revamped loyalty program contributed to sales. Taco Bell's Value Menu encourages guests to visit.While there is increasing pressure on businesses to lower prices to attract consumers, persistent inflation in food, energy, labor, and other input costs is hurting profits for restaurants, retailers, and consumer products companies alike. It is a major hindrance to sexuality.Most companies are We are already seeing a slowdown in pricing power The last few quarters have been partly due to a more challenging demand environment and partly because prices are already at very high levels. Pablo Gonchar | Light Rocket | Getty ImagesShake Shack announced in mid-March that it had raised prices, but executives told analysts there were “no current plans to raise prices further this year.” The decision came despite them “expecting inflationary pressures on wages, food and paper to continue.”A focus on promotions will put even more pressure on profit margins. Look at Starbucks. Margins were lower than Wall Street expectations and narrowed compared to a year ago. One of the reasons cited in the company's financial report for the disappointing profit margin performance was “increased promotional activity.” Add to this weak traffic and you're in trouble.Ultimately, as companies face further pricing pressures going forward, they may have to rely on other cost reductions and effective cost management to maintain profit margins in the coming quarters. expensive.Get ready for an interesting retail earnings season in the coming weeks.Don't miss exclusive information on CNBC PRO
https://www.cnbc.com/2024/05/07/retail-earnings-what-we-know-about-the-consumer-so-far.html What we know so far about consumers