5 Takeaways About the Consumer

MESSAGE FROM THE PRESIDENT

May 22, 2023

Several State Chamber members who are part of our Delaware Retail Council held corporate earnings calls last week, and others like Best Buy and Lowe’s will do similarly this week. CNBC detailed five takeaways about the consumer in a story that continues to evolve. Last week, Walmart, Home Depot, and Target offered up the latest clues about current consumer behavior.

Sales trends have weakened. Consumers are spending more for essentials like food, and forgoing “do-it-yourself projects and last-minute splurges at the store.” The story went on to say, however, that “Home Depot bucked the slowing sales trend, but that may have to do more with what it offers than consumer health.” After all, this is spring and homeowners are busy with yard and structural maintenance, but not additions of any consequence.

Inflation worries still drag on consumer confidence. Walmart CEO Doug McMillon said persistent inflation is “one of the key factors creating uncertainty for us in the back half of the year” and that inflation is “weighing on some of the families we serve.”

“Target, Home Depot and Walmart all saw a noticeable pattern: fewer pricey and fun items in shopping carts.” Home Depot CEO Ted Decker said, “customers bought fewer big-ticket items such as appliances and grills in the fiscal first quarter.” Home Depot also noted that “cooler and wetter weather in California and parts of the western U.S. hit sales, contributing to its biggest revenue miss in more than 20 years." On the positive side of things, the company noted that lumber prices have dropped substantially.

News You Can Use

Economic news this week kicks off Tuesday with new home sales for April. Thursday brings us pending home sales for April, while on Friday we’ll learn of April durable goods orders, personal income data, and retail inventories.

Zoom Video Communications starts with week of earnings calls today, followed by Lowe’s, Agilent, Toll Brothers, and Urban Outfitters on Tuesday. Chip maker Nvidia headlines the Wednesday calls, and is joined by Abercrombie & Fitch, Analog Devices, Splunk, and Modine Manufacturing. Best Buy, Dollar Tree, Medtronic, and Toronto-Dominion Bank (TD Bank) are scheduled for Thursday, while Big Lots and Booz Allen Hamilton are on tap for Friday.

Michael J. Quaranta

President

Delaware State Chamber of Commerce

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Mountaire Farms is a fast-growing agricultural food processing company with almost 10,000 employees at facilities in Arkansas, Delaware, Maryland, Virginia, and North Carolina. As one of the top producers of poultry in the US, they export to more than 60 countries around the world.