A calm week of holiday sales data, combined with new cautious comments from competitors, suggests that household spending and habits are still responding to the same old tricks among this year’s top two retailers. It may trigger a strategic change because it is not
Not only is the all-important December retail sales data down 1.1% this week, its biggest monthly drop in a year, but it’s also benefiting from tightening belts and sharp food, helping to keep benchmarks strong. Non-discretionary grocery categories also stalled. Prices rise all year round.
Mike Littler, head of retail card services at TD Bank, said continued uncertainty about the macroeconomic environment has led to many consumers being hesitant to spend compared to spending during the 2021 holiday season. is proving to be more difficult for retailers to navigate. A government report has been released highlighting the need for retailers to revisit the lessons learned from the pandemic.
“It is more important than ever to prioritize the customer service experience along with supply chain management,” Littler added.
bare shelf experience
Shifting consumer preferences for groceries, groceries, and necessities move away from discretionary spending, and Walmart will have its best year of relative outperformance against Amazon in over a decade in 2022 However, the meager 0.1% increase in grocery store sales last month suggests something. It’s wrong.
This is because, as reported earlier this month, the annual pace of inflation surrounding home-eaten food remains in the double digits.
Consumers still have decidedly defensive biases, and meals are still eaten at home, but grocery stores, which are typically low-margin traffic leaders, are starting to lose some of that punch. groceries.
Further complicating this cautious consumer math is the comment of John Moeller, CEO of Procter & Gamble (P&G), who said from his seat that people were buying cheaper store brands and Despite widespread reports that they are switching to private labels, it said the views of both shoppers and retailers were stable.
“Let’s not forget that our retail partners are the owners of the private brands that we compete with, and they face the same dynamics of cost input that we do. Moeller told P&G investors on CPG-giant’s fiscal second quarter earnings report that the buying habits of its largest customers and ongoing inventory fluctuations have not changed.
“We don’t see anything in our interactions with our retail partners that will affect that discussion in the near future,” added Moeller.
Especially when it comes to Amazon and Walmart, PYMNTS data points to a much more pessimistic consumer economic outlook, so much publicity has been made against last year’s excess of unsold inventory and budget-squeezing inflation. It’s probably too early to say we’re done with pricing. than many of the government policy makers and Wall Street pundits.
For example, one retail tweak that may become more prevalent is a non-promotional effort aimed at driving store traffic, such as Amazon’s expansion of its boxless return program at Whole Foods stores.
Zappos.com CEO Scott Schaefer has announced a “label-free, box-free” in-store returns program. “… [W]We are excited to not only serve our customers better, but to have found a natural partner at Whole Foods Market. ”
What we do know for sure is that two weeks from now investors will know how Amazon’s promotions, cross-selling and belt-tightening efforts are working. Location after the close of trading on February 2nd.
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