Retailers are reporting weakening profits as consumers are “being more judicious in how they spend.” Dean Seal reports in The Wall Street Journal:
Shoppers have shifted their spending habits in a postpandemic world, leaving retailers in the lurch.
The stocks of major retailers have tumbledas storesincluding Macy’s, Dick’s Sporting Goods and Foot Locker posted slowing sales, weakening profits and tepid forecasts.
Their lackluster results offer more evidence that strained consumers feeling the weight of higher debt and increased prices are redirecting their discretionary spending away from certain products and goods.
“Consumers still have good savings, but they are being more judicious in how they spend,” Macy’s Chief Executive Jeff Gennette told The Wall Street Journal on Tuesday. “More of their money is going to services and experiences.”
Retailers are dealing with their ownintensifying challenges, particularly a rise in theft and inventory losses known as shrink, that are cutting into their top and bottom lines.
Here is what we learned about the retail landscape from recent quarterly earnings reports.
‘Postpandemic normalization’
Early in the pandemic, shoppers started pouring money into the homes they were spending more time in. Now that lockdowns are in the rearview mirror, the spending on renovation projects, workout equipment and home goods has cooled.
Bath & Body Works Chief Executive Gina Boswell said sales of home fragrances and hand sanitizers are dropping as part of an expected “postpandemic normalization” that the company is factoring into its guidance for lower sales this year. The outlook also reflects a more shrewd spending attitude among shoppers, she said.
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