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Tag: Retail sales

  • U.S. Retail Sales Unchanged In October As Auto Sales Tumble

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    A report released by the Commerce Department on Tuesday showed retail sales in the U.S. were roughly flat in the month of October.

    The Commerce Department said retail sales were virtually unchanged in October after inching up by a downwardly revised 0.1 percent in September.

    Economists had expected retail sales to rise by 0.2 percent, matching the increase originally reported for the previous month.

    Retail sales came in flat in October as a steep drop in sales by motor vehicle and parts dealers offset strength in other areas.

    The Commerce Department said sales by motor vehicle and parts dealers tumbled by 1.6 percent in October after edging down by 0.1 percent in November.

    However, excluding sales by motor vehicle and parts dealers, retail sales climbed by 0.4 percent in October after inching up by 0.1 percent in September. Ex-auto sales were expected to rise by 0.3 percent.

    “Though headline retail sales were unchanged in October, that was entirely due to a drop in vehicle sales following the expiry of the EV tax credit,” said Michael Pearce, Chief U.S. Economist at Oxford Economics.

    He added, “Excluding autos, sales posted another strong gain and leave real consumption on track for growth of close to 2% annualized in Q4.”

    The report showed a 4.9 percent surge in sales by department stores as well as notable increases in sales by furniture and home furnishings stores, sporting goods, hobby, musical instrument and book stores, non-store retailers and miscellaneous store retailers.

    Core retail sales, which exclude automobiles, gasoline, building materials and food services, grew by 0.8 percent in October after slipping by 0.1 percent in September. Economists had expected core retail sales to rise by 0.3 percent.

    For comments and feedback contact: editorial@rttnews.com

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  • GST cuts and festive buying boost India’s vehicle market – GlobalData

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    India’s Light Vehicle (LV) wholesale figures for September increased by 15% month-on-month (MoM) to 437k units, with Passenger Vehicles (PVs) up by 16% to 373k units and Light Commercial Vehicles (LCVs) with a gross vehicle weight of up to 6T climbing by 10% to 64k units. On a year-on-year (YoY) basis, LV sales increased by 6%, supported by gains in both PVs and LCVs, which rose by 6% and 8%, respectively.

    The MoM surge in PV wholesale volumes was driven by the early festive season (Navratri) and the implementation of new GST rates, which lowered car prices. Retail inflation eased to an eight-year low, contributing to positive consumer sentiment.

    Source: GlobalData

    Source: GlobalData

    Similarly, retail sales of PVs and LCVs in September declined by 7% MoM to 343k units, compared to 369k units in August, according to data from the Federation of Automobile Dealers Associations (FADA). PV retail sales fell by 7% MoM, while LCV sales dropped by 4% MoM. FADA also noted that the decline in PV retail sales on a MoM basis was due to the anticipation of GST 2.0 reforms, where the first three weeks were largely muted. However, the dynamics changed dramatically in the final week as Navratri festivities coincided with the implementation of lower GST rates, reviving customer sentiment and accelerating deliveries for both PVs and LCVs. As a result, the month ended with an overall growth of 6% YoY for the LV market.

    At the end of September, PV inventory levels in India increased to 60 days, up from 55 days in August, reflecting festive preparedness ahead of October’s peak season, according to data from FADA.

    Through the first nine months of the year overall, LV sales remained flat at 3.7 million units, comprising 3.2 million PVs (+1% YoY) and 522k LCVs (+1% YoY).

    Looking ahead, demand is expected to rise in October and subsequent months following the GST rate cut on automobiles and household items, which should lower costs and increase disposable income. The ongoing festival season, combined with price reductions from lower GST rates and aggressive marketing, is also likely to further stimulate demand.

    We have refined our outlook for India’s LV market to reflect a stronger near-term trajectory. The market is expected to maintain a solid growth momentum through 2025 and 2026, supported by healthy domestic demand, improving supply stability, and new product launches. The long-term outlook through 2032 also remains robust, with LV sales reaching 6.8 million units.

    Source: GlobalData

    Source: GlobalData

    This article was first published on GlobalData’s dedicated research platform, the Automotive Intelligence Center.

    “GST cuts and festive buying boost India’s vehicle market – GlobalData” was originally created and published by Just Auto, a GlobalData owned brand.

     


    The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.

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  • How the government shutdown disrupts critical economic data

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    The government shutdown that began Wednesday will deprive policymakers and investors of economic data vital to their decision-making at a time of unusual uncertainty about the direction of the U.S. economy.The absence will be felt almost immediately, as the government’s monthly jobs report scheduled for release Friday will likely be delayed. A weekly report on the number of Americans seeking unemployment benefits — a proxy for layoffs that is typically published on Thursdays — will also be postponed.If the shutdown is short-lived, it won’t be very disruptive. But if the release of economic data is delayed for several weeks or longer, it could pose challenges, particularly for the Federal Reserve. The Fed is grappling with where to set a key interest rate at a time of conflicting signals, with inflation running above its 2% target and hiring nearly ground to a halt, driving the unemployment rate higher in August.The Fed typically cuts this rate when unemployment rises, but raises it — or at least leaves it unchanged — when inflation is rising too quickly. It’s possible the Fed will have little new federal economic data to analyze by its next meeting on Oct. 28-29, when it is widely expected to reduce its rate again.“The job market had been a source of real strength in the economy but has been slowing down considerably the past few months,” said Michael Linden, senior policy fellow at the left-leaning Washington Center for Equitable Growth. “It would be very good to know if that slowdown was continuing, accelerating, or reversing.”The Fed cut its rate by a quarter-point earlier this month and signaled it was likely to do so twice more this year. Fed officials said they would keep a close eye on how inflation and unemployment evolve, but that depends on the data being available.A key inflation report is scheduled for Oct. 15 and the government’s monthly retail sales report is slated for release the next day.“We’re in a meeting-by-meeting situation, and we’re going to be looking at the data,” Fed Chair Jerome Powell said during a news conference earlier this month.The economic picture has recently gotten cloudier. Despite slower hiring, there are signs that overall economic growth may be picking up. Consumers have stepped up their shopping and the Federal Reserve Bank of Atlanta estimates the economy likely expanded at a healthy clip in the July-September quarter, after a large gain in the April-June period.A key question for the Fed is whether that growth can revive the job market, which this Friday’s report might have helped illustrate. Economists had forecast another month of weak hiring, with just 50,000 new positions added, according to a survey by FactSet. The unemployment rate was projected to stay at a still-low 4.3%.On Wall Street, investors obsess over the monthly jobs reports, typically issued the first Friday of every month. It’s a crucial indicator of the economy’s health and provides insights into how the Fed might adjust interest rates, which affects the cost of borrowing and influences how investors allocate their money.So far, investors don’t seem fazed by the shutdown. The broad S&P 500 stock index rose slightly Wednesday to an all-time high.Many businesses also rely on government data to gauge how the economy is faring. The Commerce Department’s monthly report on retail sales, for example, is a comprehensive look at the health of U.S. consumers and can influence whether companies make plans to expand or shrink their operations and workforces.For the time being, the Fed, economists, and investors will likely focus more on private data.On Wednesday, the payroll provider ADP issued its monthly employment data, which showed that businesses cut 32,000 jobs in September — a signal the economy is slowing. Still, ADP chief economist Nela Richardson said her firm’s report “was not intended to be a replacement” for government statistics.The ADP data does not capture what’s happening at government agencies, for example — an area of the economy that could be significantly affected by a lengthy shutdown.“Using a portfolio of private sector and government data gives you a better chance of capturing a very complicated economy in a complex world,” she said.The Fed will remain open no matter how long the shutdown lasts, because it funds itself from earnings on the government bonds and other securities it owns. It will continue to provide its monthly snapshots of industrial production, which includes mining, manufacturing, and utility output. The next industrial production report will be released Oct. 17.

    NEW YORK —

    The government shutdown that began Wednesday will deprive policymakers and investors of economic data vital to their decision-making at a time of unusual uncertainty about the direction of the U.S. economy.

    The absence will be felt almost immediately, as the government’s monthly jobs report scheduled for release Friday will likely be delayed. A weekly report on the number of Americans seeking unemployment benefits — a proxy for layoffs that is typically published on Thursdays — will also be postponed.

    If the shutdown is short-lived, it won’t be very disruptive. But if the release of economic data is delayed for several weeks or longer, it could pose challenges, particularly for the Federal Reserve. The Fed is grappling with where to set a key interest rate at a time of conflicting signals, with inflation running above its 2% target and hiring nearly ground to a halt, driving the unemployment rate higher in August.

    The Fed typically cuts this rate when unemployment rises, but raises it — or at least leaves it unchanged — when inflation is rising too quickly. It’s possible the Fed will have little new federal economic data to analyze by its next meeting on Oct. 28-29, when it is widely expected to reduce its rate again.

    “The job market had been a source of real strength in the economy but has been slowing down considerably the past few months,” said Michael Linden, senior policy fellow at the left-leaning Washington Center for Equitable Growth. “It would be very good to know if that slowdown was continuing, accelerating, or reversing.”

    The Fed cut its rate by a quarter-point earlier this month and signaled it was likely to do so twice more this year. Fed officials said they would keep a close eye on how inflation and unemployment evolve, but that depends on the data being available.

    A key inflation report is scheduled for Oct. 15 and the government’s monthly retail sales report is slated for release the next day.

    “We’re in a meeting-by-meeting situation, and we’re going to be looking at the data,” Fed Chair Jerome Powell said during a news conference earlier this month.

    The economic picture has recently gotten cloudier. Despite slower hiring, there are signs that overall economic growth may be picking up. Consumers have stepped up their shopping and the Federal Reserve Bank of Atlanta estimates the economy likely expanded at a healthy clip in the July-September quarter, after a large gain in the April-June period.

    A key question for the Fed is whether that growth can revive the job market, which this Friday’s report might have helped illustrate. Economists had forecast another month of weak hiring, with just 50,000 new positions added, according to a survey by FactSet. The unemployment rate was projected to stay at a still-low 4.3%.

    On Wall Street, investors obsess over the monthly jobs reports, typically issued the first Friday of every month. It’s a crucial indicator of the economy’s health and provides insights into how the Fed might adjust interest rates, which affects the cost of borrowing and influences how investors allocate their money.

    So far, investors don’t seem fazed by the shutdown. The broad S&P 500 stock index rose slightly Wednesday to an all-time high.

    Many businesses also rely on government data to gauge how the economy is faring. The Commerce Department’s monthly report on retail sales, for example, is a comprehensive look at the health of U.S. consumers and can influence whether companies make plans to expand or shrink their operations and workforces.

    For the time being, the Fed, economists, and investors will likely focus more on private data.

    On Wednesday, the payroll provider ADP issued its monthly employment data, which showed that businesses cut 32,000 jobs in September — a signal the economy is slowing. Still, ADP chief economist Nela Richardson said her firm’s report “was not intended to be a replacement” for government statistics.

    The ADP data does not capture what’s happening at government agencies, for example — an area of the economy that could be significantly affected by a lengthy shutdown.

    “Using a portfolio of private sector and government data gives you a better chance of capturing a very complicated economy in a complex world,” she said.

    The Fed will remain open no matter how long the shutdown lasts, because it funds itself from earnings on the government bonds and other securities it owns. It will continue to provide its monthly snapshots of industrial production, which includes mining, manufacturing, and utility output. The next industrial production report will be released Oct. 17.

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  • Ford PH retail performance up by 28% in Q1 2024

    Ford PH retail performance up by 28% in Q1 2024

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    Ford Philippines delivered a strong retail performance in the first quarter of 2024, driven by the growing demand for its vehicle line-up led by the Ranger, Everest, and Territory. 

    Retail sales rose 28 percent from a year ago to 7,531 vehicles sold for the first three months of 2024. The Ford Ranger remained as Ford’s top-selling vehicle, with sales growing by 33 percent from last year to 3,290 vehicles. The Ranger also retained its leadership in the 4×4 pickup segment with 2,166 units sold. 

    The Ford Everest sustained its sales momentum from 2023, recording a 96 percent growth from last year to 2,713 vehicles sold for the first quarter of 2024.

    The Ford Territory also maintained its top position in the small SUV segment with sales reaching 1,433 units for the first three months of the year. 

    “We are off to a strong start in 2024 and we thank our customers for their trust and loyalty, as well as our dealers and partners for their support to enhance the ownership experience,” shares Mike Breen, managing director, of Ford Philippines. “The second quarter will be a busy period for us as we continue to enrich the Filipino mobility lifestyle with our segment-leading vehicles and innovative service offerings.”

    Enhancing the Ownership Experience

    As part of its commitment to enhance the ownership experience, Ford introduced in April the Territory 5-Star Care Package, which allows customers getting the Territory Titanium to enjoy complimentary 5-year scheduled service plan (SSP) and 5-year emergency roadside assistance on top of the standard 5-year warranty and a PHP20,000 cash discount. 

    The SSP is a prepaid plan that protects customers from future parts and labor price increases on their periodic maintenance service (PMS). Meanwhile, Ford’s emergency roadside assistance gives owners access to 24/7 support, nationwide towing coverage, minor on-site repairs and other services. With Ford’s warranty, customers get access to a comprehensive service protection plan that covers parts and labor to repair over 1,000 key components.

    The Territory Titanium X variant is also available with a PHP20,000 cash discount from April 1 to 30, 2024, on top of the standard 5-year warranty.

    Ford Philippines also launched its Battery Program where customers can enjoy competitively-priced battery packages that start at PHP6,300. On top of this, customers can also get free labor on installation and extended warranty of up to 24 months. The program is available on EcoSport, Everest, Fiesta, Focus, Ranger and Territory until June 30, 2024.

    Expanding North American-Built Vehicle Line

    As the Ford Explorer continues to gain popularity among customers, Ford Philippines is set to refresh and expand its North American-built vehicle line-up with the launch of the All-New Mustang in May and the All-New Bronco very soon. A sneak peek at the All-New Mustang took place last April 17 during the Mustang’s 60th anniversary. Customers can reserve the Explorer, All-New Mustang and All-New Bronco exclusively on Ford’s online reservation portal via ford.to/ReserveToday.

    For more details, customers can visit the Ford Philippines website or a Ford dealer nearest them.

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    Gadgets Magazine 17

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  • CT Retail Weed Sales Fall for Second Month – Cannabis Business Executive – Cannabis and Marijuana industry news

    CT Retail Weed Sales Fall for Second Month – Cannabis Business Executive – Cannabis and Marijuana industry news

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    CT Retail Weed Sales Fall for Second Month – Cannabis Business Executive – Cannabis and Marijuana industry news






























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    Tom Hymes

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  • Wells Fargo unveils 2024 target, warns of ‘really, really sloppy’ first half for stocks

    Wells Fargo unveils 2024 target, warns of ‘really, really sloppy’ first half for stocks

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    Wells Fargo Securities is officially out with its 2024 stock market forecast.

    Chris Harvey, the firm’s head of equity strategy, sees a volatile path to his S&P 500 to 4,625 year-end target.

    “It’s really hard to get excited. If we have better [economic] growth, then the Fed doesn’t do anything,” he told CNBC’s “Fast Money” on Monday. “If we have worse growth, then numbers are going to come down and then the Fed will eventually cut. The second half will be better, but the first half is going to be really, really sloppy.”

    Harvey’s target is just 75 points above Monday’s S&P 500’s close.

    “Can we go higher from here? Sure, we can go a little bit higher. But I just don’t think you can go a ton higher,” he said. “People have talked about 5,000. I don’t see how you get to that level.”

    In his official 2024 outlook note, Harvey told clients to brace for a “trader’s market” instead of a “buy-and-hold situation.” His early year strategy: Start with a risk-averse stance.

    “The VIX [CBOE Volatility Index] is up 13. Every time we’ve gone into a new year with the VIX at 13, we’ve seen spikes. We’ve seen the equity market pull back, and it’s just not a great setup into 2024,” Harvey added.

    He warns the higher cost of capital is an additional market problem because it prevents multiples from going higher.

    “As long as the cost of capital stays higher, it’s really hard for me to get to a much higher price target,” Harvey said.

    Yet, he still sees opportunities for investors.

    “What we want to do is we want to go to the places that are oversold. We just upgraded utilities today. We upgraded health care,” Harvey noted. “Those are areas that have good valuations, decent fundamentals and most people really aren’t there at this point.”

    ‘I hate to say that as being head of equity strategy’

    Harvey also sees Treasurys as an option.

    “If you look at the alternatives, there are things that are pretty attractive. And, I hate to say that as being head of equity strategy, but you can park money at the front of the curve and make a pretty good rate of return and not put on a whole lot of risk,” said Harvey.

    His 2023 S&P target is 4,420 — which implies a three percent drop from Monday’s close.

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  • CNBC Daily Open: More trouble ahead for U.S. banks

    CNBC Daily Open: More trouble ahead for U.S. banks

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    Spencer Platt | Getty Images

    This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    Beset by worries
    Major U.S. indexes tumbled, weighed down by losses in financial stocks and worries over China’s faltering economy. Asia-Pacific markets followed Wall Street and fell Wednesday. Most regional indexes lost at least 1%. A silver lining: Japanese business’ sentiment climbed in July, alongside the country’s stronger-than-expected economic growth.

    Potential banking downgrade
    Fitch Ratings warned it may downgrade the U.S. banking industry’s credit rating from AA- to A+. Since individual banks cannot be rated higher than the industry, major banks like JPMorgan Chase and Bank of America would be cut to an A+ rating — with a trickle-down effect for smaller banks — if the downgrades happens. Fitch’s warning comes as Moody’s downgraded 10 banks last week.

    Higher risk of corporate defaults
    There’s a higher chance corporate debt in emerging markets might default, according to JPMorgan. The bank raised its forecast for high-yield defaults in Asia from 4.1% to 10% — but that figure drops to just 1% if China property is excluded. That’s a sign of how severe the contagion risk is if Country Garden, the beleaguered Chinese property developer, defaults.

    U.S. consumer strong as ever
    U.S. consumer spending in July remained healthy, according to data from the Commerce Department. Seasonally adjusted retail sales rose 0.7% for the month; economists were expecting 0.4%. Excluding autos, sales rose 1% against a 0.4% forecast. Both figures were the best monthly gains since January, reinforcing sentiment that the consumer can continue supporting economic growth.

    [PRO] Stocks are still ‘overvalued’
    Despite the sell-off in stocks the last two weeks, U.S. markets have rallied so much this year that stocks are still “overvalued and overextended,” according to Morningstar’s chief U.S. market strategist. It’s a good time to sell these six stocks to lock in profits — and buy five cheap ones, he said.

    The bottom line

    Financial stocks had a bad day.

    After Fitch warned that it might downgrade the banking industry’s credit rating, shares of big U.S. banks fell. Bank of America lost 3.2%, JPMorgan declined 2.55% and Wells Fargo slid 2.31%.

    Regional banks weren’t spared the slaughter, either. The SPDR S&P Regional Banking ETF fell 3.33% after Minneapolis Federal Reserve President Neel Kashkari spoke in favor of “significantly further” capital requirements for banks with more than $100 billion in assets. Kashkari also emphasized that if inflation rebounds, rates might have to go higher and “pressures [in regional banks] could flare up again.”

    But not everyone’s worried about Fitch’s warning. “The U.S. bank system is overall sound,” said Eric Diton, president and managing director at The Wealth Alliance.

    “All Fitch was saying was: ‘If we did downgrade the sector again, that would lead us to have to downgrade a lot of the individual banks,’” Diton said. “Maybe they will, maybe they won’t.”

    Banking doldrums aside, there were two bright spots in the initial public offering arena. Shares of VinFast, a Vietnamese electric vehicle company, surged from $10 per share to $22 in its debut on the Nasdaq; prices continued rising throughout the day to close at $37.

    Meanwhile, Cava shares jumped 9.44% in extended trading after its first earnings report since its IPO in June. Taken together, they suggest that the IPO market is returning to health.

    Still, major indexes couldn’t shrug off worries over banks and China. The S&P 500 slipped 1.16%, ending the day below its 50-day moving average for the first time since March — possibly heralding the start of a continued slide. The Dow Jones Industrial Average lost 1.02%, breaking its three-day winning streak. The Nasdaq Composite fell 1.14%.

    If indexes continue sliding, that’d be their third consecutive losing week. Investors are hoping it’s a brief summer spell, a moment of correction that will end as the weather turns.

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  • CNBC Daily Open: More obstacles for U.S. banks

    CNBC Daily Open: More obstacles for U.S. banks

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    A woman walks past JPMorgan Chase & Co’s international headquarters on Park Avenue in New York.

    Andrew Burton | Reuters

    This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    Beset by worries
    Major U.S. indexes tumbled, weighed down by losses in financial stocks and worries over China’s faltering economy. European markets mostly fell as well. The pan-European Stoxx 600 index lost 0.93%, but Italy’s FTSE MIB added 0.57% — the only major bourse to end the day in the green.

    Potential banking downgrade
    Fitch Ratings warned it may downgrade the U.S. banking industry’s credit rating from AA- to A+. Since individual banks cannot be rated higher than the industry, major banks like JPMorgan Chase and Bank of America would be cut to an A+ rating — with a trickle-down effect for smaller banks — if the downgrades happens. Fitch’s warning comes as Moody’s downgraded 10 banks last week.

    U.S. consumer strong as ever
    U.S. consumer spending in July remained healthy, according to data from the Commerce Department. Seasonally adjusted retail sales rose 0.7% for the month; economists were expecting 0.4%. Excluding autos, sales rose 1% against a 0.4% forecast. Both figures were the best monthly gains since January, reinforcing sentiment that the consumer can continue supporting economic growth.

    Rate hike to strengthen ruble
    Russia’s central bank jacked up interest rates by 3.5 percentage points to 12% at an emergency meeting Tuesday. The bank’s attempting to stop a sudden slide in the Russian ruble, which slumped to nearly 102 against the U.S. dollar Monday. The ruble has since climbed back to around 98.5 as of publication time.

    [PRO] Overconfident investors
    The stock market rally during the first half of this year has made investors overconfident, according to a Bank of America survey. That’s bad — because the “strong tailwind” propelling stocks forwards is fading fast, a BofA analyst wrote in a summary of the survey.

    The bottom line

    Financial stocks had a bad day.

    After Fitch warned that it might downgrade the banking industry’s credit rating, shares of big U.S. banks fell. Bank of America lost 3.2%, JPMorgan declined 2.55% and Wells Fargo slid 2.31%.

    Regional banks weren’t spared the slaughter, either. The SPDR S&P Regional Banking ETF fell 3.33% after Minneapolis Federal Reserve President Neel Kashkari spoke in favor of “significantly further” capital requirements for banks with more than $100 billion in assets. Kashkari also emphasized that if inflation rebounds, rates might have to go higher and “pressures [in regional banks] could flare up again.”

    But not everyone’s worried about Fitch’s warning. “The U.S. bank system is overall sound,” said Eric Diton, president and managing director at The Wealth Alliance.

    “All Fitch was saying was: ‘If we did downgrade the sector again, that would lead us to have to downgrade a lot of the individual banks,'” Diton said. “Maybe they will, maybe they won’t.”

    Banking doldrums aside, there were two bright spots in the initial public offering arena. Shares of VinFast, a Vietnamese electric vehicle company, surged from $10 per share to $22 in its debut on the Nasdaq; prices continued rising throughout the day to close at $37.

    Meanwhile, Cava shares jumped around 8% in extended trading after its first earnings report since its IPO in June. Taken together, they suggest that the IPO market is returning to health.

    Still, major indexes couldn’t shrug off worries over banks and China. The S&P 500 slipped 1.16%, ending the day below its 50-day moving average for the first time since March — possibly heralding the start of a continued slide. The Dow Jones Industrial Average lost 1.02%, breaking its three-day winning streak. The Nasdaq Composite fell 1.14%.

    If indexes continue sliding, that’d be their third consecutive losing week. Investors are hoping it’s a brief summer spell, a moment of correction that will end as the weather turns.

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  • Retailers are gamifying shopping with virtual storefronts to boost engagement, loyalty

    Retailers are gamifying shopping with virtual storefronts to boost engagement, loyalty

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    J. Crew virtual beach house.

    Courtesy: J. Crew

    In a brown shingled beach house tucked behind stalks of reed grass, J. Crew customers encounter a new shopping experience. 

    Just beyond a set of wood steps and a wraparound porch, shoppers can explore a series of white-paneled rooms, a boathouse and a secret lighthouse that highlight the brand’s history and some of its most popular apparel. 

    Inside the rooms, shoppers can browse barn jackets, rollneck sweaters and rugby shirts. Outside on the porch, bathing suits are displayed on a clothesline.

    While customers can select and purchase items as they would in any J. Crew store, the beach house comes with one key difference: It’s entirely virtual. 

    To mark J. Crew’s 40th anniversary, the brand is launching its first immersive shopping experience Friday with e-commerce platform Obsess, which creates 3D, virtual stores for retailers that customers can access from their phones or laptops. 

    Derek Yarbrough, the chief marketing officer of J. Crew and Madewell, told CNBC the company is planning a series of events to celebrate the brand’s anniversary. But they tend to be in places such as New York and Los Angeles, which limits the number of people who can attend, he said.

    “With Obsess, we were really looking to have an exciting activation that we could execute for a larger audience and reach more of the people who love the brand in a bigger way,” Yarbrough said in an interview. “We really wanted this to be a passport to explore the world of J. Crew … and as the team brainstormed on it, it was a little bit of a no-brainer to take the form of a beach house.” 

    J. Crew virtual beach house.

    Courtesy: J. Crew

    Obsess was launched in 2017 by its CEO, Neha Singh, a former Google software engineer. It aims to transform traditional online shopping into something more immersive, so shoppers remain engaged rather than lose interest as they endlessly scroll for their next purchase. 

    In Obsess’ virtual storefronts, customers can create their own avatars. Depending on the retailer, they can also play games that can unlock more content, promotions or other bonuses that keep them in the virtual stores for longer, the company said. 

    “What our platform does is it enables brands to create that much richer and more immersive digital experience that borrows the interface from gaming,” said Singh. “Today, the experience is so generic. Other than font and color, there’s really no differentiation between brands’ digital presence, but their physical retail presence is so different. So how can we bring some of those elements into online?”

    Virtual storefronts on the rise

    Many retailers saw the metaverse, a virtual world that offered another possible platform to sell products, as the hot new technology throughout last year. Many of those same companies have now largely forgotten it, as strides in artificial intelligence have surged to the top of business leaders’ minds a year later.

    While the metaverse may be dead — for now — virtual storefronts are growing. Obsess is now powering more than 200 virtual stores that tens of millions of shoppers have visited and bought products in. 

    The company’s clients include American Girl, Elizabeth Arden, Dior, Ralph Lauren, Corona, Laneige, Crocs, Coach, Mattel, Maybelline, Johnson & Johnson and even NBCUniversal, among others. 

    The virtual storefronts allow retailers to bring a version of the metaverse to their customers, without the need for pricey headgear or other steep barriers to entry.

    J. Crew virtual beach house.

    Courtesy: J. Crew

    “Technology never stops, and it’s going to keep progressing, but it has to be something that’s user-friendly, right? And parts of [the metaverse] are not user-friendly yet,” said Singh. “We launched the company before metaverse was a buzzy topic, and it really was just about: How can we use the latest technology to actually create a better customer experience?” 

    When e-commerce was born in the 1990s, Amazon led the way in its online bookstore, which featured a white background and icons of books with text describing them.

    Since then, little has changed when it comes to the basic interface of online shopping.

    “If you think about e-commerce, the typical sort of interface today, it’s a grid of thumbnails on a white background; whether you’re shopping for fashion, or beauty or home, it’s really all the same,” Singh said. “The interface looks like a database that really hasn’t changed in 25 years [since] it was first created.” 

    Gamifying shopping, boosting engagement 

    Shoppers headed to J. Crew’s virtual store can access a series of interactive games, including a scavenger hunt and a quiz on catalog covers, where customers will be asked to guess what year they were published. 

    Once they go through all the rooms and complete the quests, shoppers gain access to the secret lighthouse.

    J. Crew virtual beach house.

    Courtesy: J. Crew

    “We see actually a 10-times-higher add-to-cart rate if people engage and complete the game. So typically now in all of our virtual stores there’s some element of gamification, and it’s very kind of naturally embedded into the flow of the store,” said Singh. 

    “The more interesting you can make the experience and keep people engaged and give them content and give them games, the more they shop,” she said.

    Some companies offer discounts or promotions as a “prize” for completing a game, which could contribute to boosted checkout rates. 

    Obsess said one of its customers, a luxury jewelry brand, said the average order value in its virtual store was 111% higher than on its traditional e-commerce site. 

    However, J. Crew’s Yarbrough said he is most excited about how long the virtual store could keep customers engaged. 

    J. Crew virtual beach house.

    Courtesy: J. Crew

    For example, on American Girl’s virtual store, shoppers spend six to 10 minutes on average per session, which is 1,000% longer than the average time spent for all shoppers on the company’s website, Obsess said. 

    One luxury fashion brand said the amount of time people spent in its virtual store was 74% higher than time spent on its traditional e-commerce site, according to Obsess. Overall, introducing avatars increases time spent by an average 73%, and when customers create an avatar, they’re on average 184% more likely to proceed to checkout, Obsess said. 

    “In today’s landscape, it’s so hard to not only get but keep people’s attention — you usually get a few seconds,” Yarbrough said. “So, if I can actually get someone to engage with an experience for several minutes or even longer, oh my God, that’s such a rich opportunity to really get someone hooked.” 

    Disclosure: NBCUniversal is the parent company of CNBC.

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  • Consumers are starting to fire up China’s pandemic-battered economy, two ETF experts find

    Consumers are starting to fire up China’s pandemic-battered economy, two ETF experts find

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    China’s pandemic-battered economy is starting to see consumers open their wallets wider, according to KraneShares’ Brendan Ahern.

    “We’re seeing the incremental rebound from the Chinese consumer,” the firm’s chief investment officer told “ETF Edge” this week. “[But] it’s not like turning on a light switch.”

    The National Bureau of Statistics of China reports retail sales have been increasing since last November.

    Ahern, who’s involved with the firm’s China-focused ETFs, expects quarterly earnings for Chinese companies to improve with each consecutive quarter — a forecast that may already be unfolding.

    Tech giants Baidu and Tencent beat revenue expectations for the fiscal first quarter of 2023. Alibaba, on the other hand, missed revenue estimates.

    “We’re actually hearing that for many of the companies … in the management calls, they’re speaking to how Q2 already is outpacing Q1, which outpaced Q4 of last year,” Ahern said.

    China’s reopening is also anticipated to have a positive impact on the airline industry.

    Singapore Airlines, Japan’s All Nippon Airways and Japan Airlines all noted demand from China as a factor in future earnings while reporting net profits earlier this month for the financial year ended March 2023.

    GraniteShares’ Will Rhind sees a similar growth trajectory.

    “Domestic travel [is] rebounding … but we’ve yet to see that from the international sector,” the ETF provider’s CEO said. “It will come, but maybe just not yet.”

    Rhind told CNBC in a special interview later in the week that international travel from China could start to rebound this summer following a sluggish start.

    His forecast comes as a government-backed epidemiologist said the country’s new Covid wave could infect 65 million a week by the end of next month.

    Rhind believes the recent Covid surge won’t affect the reopening’s trajectory, adding past lockdowns seen across China are “very, very much unlikely to be repeated.”

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  • Five takeaways about the consumer from Walmart, other retailers after a big week of earnings

    Five takeaways about the consumer from Walmart, other retailers after a big week of earnings

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    A Target department store in North Miami Beach, Florida, May 17, 2023.

    Joe Raedle | Getty Images

    More grocery purchases, fewer ambitious do-it-yourself projects and last-minute splurges at the store.

    This week, some of the biggest retailers in the country reported earnings and described how their customers are shopping. As Home Depot, Target and Walmart reported their quarterly sales and shared full-year outlooks, the companies offered up the latest clues about the health of the American consumer and previewed what could be ahead for the economy.

    Some smaller retailers also offered warning signs for the current quarter and this year.

    Next week will give even more insight into the retail industry and economy. Best Buy, Lowe’s, Costco, Dollar Tree and Kohl’s are among the earnings on tap. Some mall retailers are also reporting earnings, including Gap, American Eagle and Abercrombie & Fitch.

    Here are some of the emerging themes.

    Sales trends have weakened

    So far, at least five retailers — Target, Walmart, Tapestry, Bath & Body Works and Foot Locker — have spoken about sales trends across the country getting worse.

    As the three-month period went on, shoppers spent less, especially on discretionary merchandise, Target CEO Brian Cornell said on a call with investors. Walmart noticed the same pattern.

    Both big-box retailers reported a sharp sales drop after February.

    Walmart’s Chief Financial Officer John David Rainey attributed the decline, in part, to the end of pandemic-related SNAP benefits and a decrease in tax refunds. 

    Cornell said headline-grabbing events could have shaken consumer confidence too. He pointed to the March banking crisis. Silicon Valley Bank collapsed that month, sparking fears of broader economic woes.

    Bath & Body Works saw sales fall off in March. Yet, sales recovered in April as the retailer turned to a common playbook: promotions. It got a boost as customers spent money at sales events toward the end of the quarter, CFO Wendy Arlin said on a Thursday earnings call.

    Foot Locker also said it may have to motivate shoppers with markdowns for the rest of the year. The company cut its full-year forecast Friday, as it reported earnings that missed expectations. CEO Mary Dillon said in a statement, “sales have since softened meaningfully given the tough macroeconomic backdrop.”

    On a call with investors Friday, Dillon said the sneaker seller’s sales got hurt by lower tax refunds and high inflation as customers spent more on food and services. While she said sales rebounded in April, “they did not improve nearly to the extent we expected, and that weakness has continued into May.”

    A few other retailers that reported earnings had specific factors working in their favor.

    When Tapestry, the parent company of Coach and Kate Spade, reported earnings last week, the company said sales softened as the quarter progressed and into April as consumers became more cautious.

    But it has a factor going for it that some other retailers don’t: A growing business in China and other international markets to offset some of those softer sales.

    Home Depot bucked the slowing sales trend, but that may have to do more with what it offers than consumer health.

    Spring is peak season for home improvement. The retailer’s comparable sales in the U.S. declined 4.6% in the quarter versus the year-ago period. In February, its comparable sales were down 2.8%. March was its weakest month of the quarter, as comparable sales fell nearly 8% year over year in the U.S.

    Home Depot’s trends were still negative in April but saw a slight improvement as comparable sales slid 3.7%, according to CFO Richard McPhail. Customers may have been buying more spring items such as potted plants.

    Inflation is still a key factor

    Inflation is easing, according to a Labor Department report this month. Yet, that’s cold comfort for shoppers who are still paying a lot more at the grocery store than they were a few years ago.

    Stubbornly high prices, especially for food, are a storm cloud that hangs over many families who shop at Walmart, and looms over the retail industry as a whole, the big-box giant’s CEO Doug McMillon said. On a call with investors Thursday, he called the persistent inflation “one of the key factors creating uncertainty for us in the back half of the year.”

    “We all need those prices to come down,” he said on the call. “The persistently high rates of inflation in these categories, lasting for such a long period of time, are weighing on some of the families we serve.”

    For example, he said general merchandise costs in the U.S. are lower than a year ago, but still higher than two years ago. In dry grocery and consumables categories, Walmart is seeing high single-digit to low double-digit cost inflation on items such as toilet paper or paper towels. For food, inflation has climbed more than 20% on a two-year basis, according to Walmart’s Rainey.

    A shopper browses the eggs section at a Walmart store in Santa Clarita, California.

    Mario Anzuoni | Reuters

    Walmart is feeling the inflation crunch even though it is better positioned to manage higher costs than other retailers. As the nation’s largest retailer and biggest grocer, Walmart can use its scale to manufacture private-label merchandise or negotiate with vendors over price.

    One rare item that dropped dramatically in price? Lumber. Home Depot cited the sharp price decrease as a factor that contributed to its fiscal first-quarter revenue miss.

    In plenty of other categories, however, inflation is still driving a higher average ticket for customers, Home Depot CEO Ted Decker said on an earnings call Tuesday.

    Consumers are spending on needs, not wants

    Target, Home Depot and Walmart all saw a noticeable pattern: fewer pricey and fun items in shopping carts.

    At Home Depot, customers bought fewer big-ticket items such as appliances and grills in the fiscal first quarter.

    Home projects got more modest, too, Decker said on an investor call. Contractors and other home professionals noticed a change from large-scale remodels to smaller renovations and repairs.

    Decker said consumers’ increased focus on value could be contributing to that shift, along with an uptick in spending on traveling, dining out and other services. He added some homeowners already tackled big projects and bought some high-priced home items during the early years of the Covid-19 pandemic, leaving less for them to do or to buy now.

    Oppenheimer's Brian Nagel on Home Depot Q1 earnings: This is a weak report

    The trend extended beyond home improvement.

    Customers at Walmart have become more selective when shopping for electronics, TVs, home items and apparel, Rainey told CNBC. The items have become a tougher sell and when customers do buy them, they often wait for a sale, he said.

    At Target, sales declined in some discretionary categories as much as low double-digits as customers bought less clothing and home decor, Chief Growth Officer Christina Hennington said on an investor call. Groceries and essentials drove a bigger portion of the retailer’s quarterly sales.

    One exception? Beauty. Hennington said Target’s beauty category was its strongest in the fiscal first quarter. Sales grew in the mid-teens year over year, showing shoppers are still willing to replenish the cosmetic case and get a new tube of lipstick.

    Weather dampened demand (literally)

    Weather has not worked in retailers’ favor, at least not yet.

    As the weather turns warm and sunnier, it can inspire shoppers to buy summer dresses, beach towels or gardening supplies.

    Yet, Home Depot said cooler and wetter weather in California and parts of the western U.S. hit its sales, contributing to its biggest revenue miss in more than 20 years.

    Walmart is eager for warmer weather too. Sam’s Club has noticed slower sales of patio sets, perhaps because of the later-to-hit spring weather, its CEO Kath McLay said on an investor call. Walmart has seen a sharp drop in air conditioner sales at its big-box stores, its CFO Rainey said.

    “We’re ready to get some spring or summer weather,” he said on a call with CNBC.

    Target noted it’s looking forward to another upcoming season: back-to-school.

    The discounter expects to get a sales boost in the back half of the year due to the big shopping season, Hennington said on an investor call. She said the return to classrooms and college dorms triggers sales across almost every department of its store, from lunch ingredients in the grocery aisles to new outfits in the kids’ clothing department.

    Shoppers have become more last-minute

    Retailers may be saying so long to the days of stockpiling and early shopping.

    Company leaders said there are signs shoppers are reverting to some of their old ways.

    At Walmart-owned Sam’s Club, McLay said shoppers are not just opting for lower price points. They’re also shopping later for seasonal items. For example, she said, customers used to buy patio furniture just as soon as it was set at the stores.

    “Now we’re seeing people wait a little bit later into the season,” she said.

    It saw a similar pattern with Mother’s Day sales, she said.

    McLay said that may indicate people have returned to shopping habits of 2018 and 2019. The trend could be fueled by shoppers’ reluctance to open their wallets or because they’re not as worried about out-of-stock items — or a combination.

    At Target, shoppers have also embraced more procrastinator tendencies, especially for discretionary items such as apparel.

    “Guests are shifting to shop more just in time in these categories, as they wait until the last moments before key events to invest in new decor or wardrobe refreshes,” Hennington said on an earnings call.

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  • Major Wall Street firm sees a breakout in luxury stocks — and lists three reasons why ETFs are a great way to play it

    Major Wall Street firm sees a breakout in luxury stocks — and lists three reasons why ETFs are a great way to play it

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    As luxury stocks make waves overseas, State Street Global Advisors believes investors should consider European ETFs if they want to capture the gains from their outperformance.

    Matt Bartolini, the firm’s head of SPDR Americas research, finds three reasons why the backdrop is becoming particularly attractive. First and second on his list: valuations and earnings upgrades.

    “That’s completely different than what we saw for U.S. firms,” he told CNBC’s Bob Pisani on “ETF Edge” this week.

    His remarks come as LVMH became the first European company to surpass $500 billion in market value earlier this week.

    Bartolini lists price momentum as a third driver of the investor shift.

    His SPDR Euro Stoxx 50 ETF (FEZ) is considered a broad European ETF. The ETF is up about 20% so far this year, with a price increase of nearly 1.2% since the beginning of January.

    While the fund’s top holding is LVMH at 7.29%, according to the company’s website, Bartolini contends the shift applies beyond luxury stocks and to lower-end consumer stocks.

    His firm’s website lists French cosmetics company L’Oreal — which is up almost 30% this year — as another one of his fund’s major holdings. It also shows FEZ allocating more than 20% to consumer discretionary — 2.5% higher than its second-most allocated industry.

    “That’s on a broad-based level,” he said. “So, basically, buy Europe and sell U.S. has been some of the trade that we have seen.”

    FEZ closed the week down 0.41% but ended the month up more than 3.1%.

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  • US retail sales fall 1% amid high inflation, rising rates | Long Island Business News

    US retail sales fall 1% amid high inflation, rising rates | Long Island Business News

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    Americans cut their spending at retail stores and restaurants in March for the second straight month, a sign consumers are becoming more cautious after a burst of spending in January.

    Retail sales dropped 1% in March from February, a sharper decline than the 0.2% fall in the previous month. Lower sales of autos, electronics, and at home and garden stores drove the decline. The data isn’t adjusted for inflation, which rose only slightly last month.

    The decline in sales adds to other recent evidence that the economy is cooling as consumers grapple with higher interest rates and the impact of a year-long bout of elevated inflation. Companies are posting fewer open jobs, hiring has slowed even as it remains solid, and layoffs have ticked up.

    In addition, economists are closely watching to see if banks pull back on lending in the wake of the collapse of two large banks last month. Many smaller banks have lost deposits to larger competitors, which could force them to offer fewer loans to consumers and businesses That could further weaken growth.

    Last month, sales fell 3% at gas stations, a drop mostly driven by lower prices. Sales increased by a strong 1.9% at online stores, and ticked up 0.1% at restaurants and bars.

    On Wednesday, minutes of the Federal Reserve’s March 21-22 meeting revealed that the central bank’s staff economists are now forecasting a “mild recession” later this year, in large part because the potential for a reduction in lending weigh on growth.

    Still, consumers could rebound in coming months as businesses are adding jobs and wages have been rising at a historically rapid pace. Economists at Bank of America have calculated that smaller tax refunds in March likely held back spending last month.

    In an analysis of card spending by its customers, Bank of America found that spending in many areas rebounded in late March, including for airline tickets, entertainment, dining out, and groceries.

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  • ‘Fed is not your friend’: Wells Fargo delivers warning ahead of key inflation report

    ‘Fed is not your friend’: Wells Fargo delivers warning ahead of key inflation report

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    As Wall Street gears up for key inflation data, Wells Fargo Securities’ Michael Schumacher believes one thing is clear: “The Fed is not your friend.”

    He warns Federal Reserve chair Jerome Powell will likely hold interest rates higher for longer, and it could leave investors on the wrong side of the trade.

    “You think about the history over the last 15 years. Whenever there was weakness, the Fed rides to the rescue. Not this time. The Fed cares about inflation, and that’s just about it,” the firm’s head of macro strategy told CNBC’s “Fast Money” on Monday. “So, the idea of lots of easing — forget it.”

    The Labor Department will release its January consumer price index, which reflects prices for good and services, on Tuesday. The producer price index takes the spotlight on Thursday.

    “Inflation could come off a fair bit. But we still don’t know exactly what the destination is,” said Schumacher. “[That] makes a big difference to the Fed – if that’s 3%, 3.25%, 2.75%. At this point, that’s up in the air.“

    He warns the year’s early momentum cannot coexist with a Fed that’s adamant about battling inflation.

    “Higher yields… doesn’t sound good to stocks,” added Schumacher, who thinks market optimism will ultimately fade. So far this year, the tech-heavy Nasdaq is up almost 14% while the broader S&P 500 is up about 8%.

    Schumacher also expects risks tied to the China spy balloon fallout and Russia tensions to create extra volatility.

    For relative safety and some upside, Schumacher still likes the 2-year Treasury Note. He recommended it during a “Fast Money” interview in Sept. 2022, saying it’s a good place to hide out. The note is now yielding 4.5% — a 15% jump since that interview.

    His latest forecast calls for three more quarter point rate hikes this year. So, that should support higher yields. However, Schumacher notes there’s still a chance the Fed chief Powell could shift course.

    “A number of folks in the committee lean fairly dovish,” Schumacher said. “If the economy does look a bit weaker, if the jobs picture does darken a fair bit, they may talk to Jay Powell and say ‘Look, we can’t go along with additional rate hikes. We probably need a cut or two fairly soon.’ He may lose that argument.”

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  • Inflation hovers over shoppers seeking deals on Black Friday

    Inflation hovers over shoppers seeking deals on Black Friday

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    NEW YORK — Cautious shoppers hunted for the best deals at stores and online as retailers offered new Black Friday discounts to entice consumers eager to start buying holiday gifts but weighed down by inflation.

    Due to elevated prices for food, rent, gasoline and other essentials, many people were being more selective, reluctant to spend unless there was a big sale. Some were dipping more into savings, turning to “buy now, pay later” services that allow payment in installments, or running up their credit cards at a time when the Federal Reserve is hiking rates to cool the U.S. economy.

    Sheila Diggs, 55, went to a Walmart in Mount Airy, Maryland early Friday looking for a deal on a coffee maker. To save money this year, she said the adults in her family are drawing names and selecting one person to shop for.

    “Everything’s going up but your paycheck,” said Diggs, who manages medical records at a local hospital.

    This year’s trends are a contrast from a year ago when consumers were buying early for fear of not getting what they needed amid supply-network clogs. Stores didn’t have to discount much because they were struggling to bring in items.

    Early shopping turned out to be a fleeting trend, said Rob Garf, vice president and general manager of retail at Salesforce, which tracks online sales. People this year are holding out for the best bargains, and retailers responded this week with more attractive online deals after offering mostly lackluster discounts earlier in the season.

    Online discounts rates were 31% on Thanksgiving, up 7% from the previous year, according to Salesforce data. The steepest discounts were in home appliances, general apparel, makeup and luxury handbags.

    Macy’s Herald Square in Manhattan, where discounts included 60% off fashion jewelry and 50% off select shoes, was bustling with shoppers early Friday.

    The traffic was “significantly larger” on Black Friday compared to the previous two years because shoppers feel more comfortable in crowds, Macy’s CEO Jeff Gennette said.

    He said that bestsellers from Macy’s online sale, which started last weekend, included 50% off beauty sets. Last year Macy’s, like many other stores, had supply chain issues and some of the gifts didn’t arrive until after Christmas.

    “Right now we are set and ready to go, “ he said.

    Sophia Rose, 40, a respiratory specialist visiting Manhattan from Albany, New York, was heading into Macy’s with big plans to splurge after scrimping last year when she was still in school. She put herself on a budget for food and gas to cope with inflation but had already spent $2,000 for holiday gifts, and plans to spend a total of $6,000.

    “I am going to touch every floor,” she said. “That’s the plan.”

    Customer traffic was also higher than last year at Mall of America in Bloomington, Minnesota, according to Jill Renslow, executive vice president of business development of the shopping center. She said 10,000 people were at the sprawling mall during the first hour after the 7 a.m. opening, though inflation prompted many shoppers to figure out what to buy before showing up.

    “With the economy, people are planning a little more,” she said.

    Delmarie Quinones, 30, went to a Best Buy in Manhattan to pick up a laptop and printer she ordered online at $179, down from $379. Quinones, a health home aide, said that higher prices on food and other expenses are making her reduce her spending from a year ago, when she had money from government child tax-credit payments.

    “I can’t get what I used to get,” said the mother of five children, ages 1 to 13. “Even when it was back to school, getting them essentials was difficult.”

    Major retailers including Walmart and Target stuck with their pandemic-era decision to close stores on Thanksgiving Day, moving away from doorbusters and instead pushing discounts on their websites.

    But people are still shopping on Thanksgiving — online. Garf said Salesforce data showed online sales spiked in the evening during the holiday this year, suggesting people went from feasting to phone shopping. And with holiday travel up, he said a greater share of online shopping occurred on mobile devices this year.

    “The mobile phone has become the remote control of our daily lives, and this led to an increase in shopping on the couch as consumers settled in after Thanksgiving dinner,” Garf said.

    But with more shoppers visiting stores this year, growth in online sales slowed.

    Shoppers spent $5.3 billion online on Thanksgiving Day, up 2.9% from the holiday last year, according to Adobe Analytics, which monitors spending across websites. Adobe expects that online buying on Black Friday will hit $9 billion, up just 1% from a year ago.

    Black Friday saw some of the labor unrest that has rippled through the retail industry over the past year. A coalition of trade unions and advocacy organizations are coordinating strikes and walkouts at Amazon facilities in more than 30 countries under a campaign called “Make Amazon Pay.” Among other places, hundreds of workers at a facility near the German city of Leipzig staged a protest Friday, calling for better working conditions and higher pay.

    And at Walmart stores, some employees had Wednesday’s deadly shooting at a company store in Virginia in the back of their minds.

    Jude Anani, a 35-year-old who works at a Walmart store in Columbia, Maryland, said the company offers training on how to react in such circumstances but he would like to see more protection. He was happy to see police officer standing outside the store, as is typical on Black Friday, and wished that was the case “most of the time during the year.”

    Against today’s economic backdrop, the National Retail Federation — the largest retail trade group — expects holiday sales growth will slow to a range of 6% to 8%, from the blistering 13.5% growth of a year ago. However, these figures, which include online spending, aren’t adjusted for inflation, so real spending could even be down from a year ago.

    Analysts consider the five-day Black Friday weekend, which includes Cyber Monday, a key barometer of shoppers’ willingness to spend. The two-month period between Thanksgiving and Christmas represents about 20% of the retail industry’s annual sales.

    ——————

    Hadero reported from Mount Airy, Maryland. Olson reported from Arlington, Virginia. Associated Press Personal Finance Writer Cora Lewis in New York contributed to this report.

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    Follow Anne D’Innocenzio: http://twitter.com/ADInnocenzio

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  • US retail sales rose 1.3% last month, a sign of resilience

    US retail sales rose 1.3% last month, a sign of resilience

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    WASHINGTON — Americans stepped up their spending at retailers, restaurants, and auto dealers last month, a sign of consumer resilience as the holiday shopping season begins amid painfully high inflation and rising interest rates.

    The government said Wednesday that retail sales rose 1.3% in October from September, up from a flat reading in September from August. The increase was led by car sales and higher gas prices. Still, excluding autos and gas, retail spending rose 0.9% last month.

    Strong auto sales may have been supercharged by the arrival of Hurricane Ian in late September, which destroyed up to 70,000 vehicles, according to economists at TD Securities.

    Even adjusting for inflation, spending increased at a solid pace. Prices rose 0.4% in October from September. The government’s solid report contrasted with gloomy figures Wednesday from retail chain Target, which announced unexpectedly weak profits as its increasingly price-sensitive customers pulled back on spending.

    Steady job growth, rising wages, and higher savings after many people cut back on travel and entertainment during the pandemic have enabled surprisingly steady spending by consumers, particularly those with higher incomes.

    Economists pointed to two other factors that likely contributed to the gain: Amazon held another Prime Day promotion last month, and California distributed inflation relief checks of up to $1,050.

    Yet there are ongoing signs that cracks are forming in consumers’ ability to keep up with the highest inflation in four decades. More households are relying on credit cards to pay bills, with nationwide credit card balances jumping 15% in the July-September quarter from a year ago, the largest year-over-year increase in two decades, according to a report Tuesday from the Federal Reserve Bank of New York.

    “Consumers are likely turning to credit to support spending as wage growth lags inflation and high prices are eating away from the stock of savings,” said Jeffrey Roach, chief economist for LPL Financial.

    And research last week from Bank of America found that consumers are increasingly seeking out cheaper options when it comes to groceries and dining out. Transactions by Bank of America customers, using credit and debit cards, show that they are now visiting cheaper fast food restaurants more often than full-service restaurants, after eating at both equally for about a year after the spring of 2021.

    The Bank of America report also found that, adjusting for inflation, grocery spending per household has fallen sharply, to below pre-pandemic levels, even though visits to grocery stores haven’t fallen. That suggests many people are seeking out cheaper options when shopping for food.

    Still, analysts said Wednesday’s government report on retail sales points to a healthier economy than previously expected. Morgan Stanley revised its forecast for growth in the October-December quarter to 1.7% at an annual rate, up from an earlier projection of 0.7%.

    Strong consumer demand could perpetuate inflation, but other trends may work in the other direction. Auto sales jumped 1.3% last month, the retail sales report showed, but that gain, in addition to people replacing cars in Florida, partly reflects a clearing of supply chain problems that have made more auto parts and semiconductor chips available. Auto production has rebounded, leading to greater supply, which can push prices down.

    Gas station sales jumped 4.1% last month, though that largely reflected higher prices. Online sales rose 1.2%, and restaurant and bar sales moved up 1.6%.

    Walmart, the world’s largest retailer, reported strong sales growth Tuesday in its third quarter, as more shoppers, including higher-income ones, sought out its cheaper groceries.

    The company said that consumers are trading down to private brands in baby items and baking goods, among other categories. It is also seeing wealthier customers. About three-quarters of Walmart’s market share gains in food came from customers with annual household incomes of $100,000 or more, the company said.

    Inflation reached 7.7% in October from a year ago, down from a peak of 9.1% in June but still a level that hasn’t been seen in 40 years. There are some signs that prices are likely to keep declining as many supply chain snarls have unraveled, boosting stockpiles of goods at many stores. Some chains may soon have to resort to discounting to clear excess merchandise.

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  • Disappointing Festive Forecast Delivers Fall In Shares For Amazon

    Disappointing Festive Forecast Delivers Fall In Shares For Amazon

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    It’s time to “batten down the hatches” according to Amazon Chair, Jeff Bezos who has recently taken to his Twitter account to highlight his thoughts on the weakening global economy.

    Whilst Amazon saw a significant business benefit from the pandemic and the rise in online shopping and services, there has been a downward shift as consumers faced with a cost of living crisis have curtailed their spending.

    The company’s overall sales in the three months to September rose by 15% year-on-year to $127.1 billion, with sales in North America growing by 20%. Yet it has seen a different story ‘across the pond’ with a reduction of its international business and a dip in demand for cloud-services.

    August and September were weaker months for Amazon, especially in Europe where consumers are facing restricted spending power as they budget to meet the rising costs of essentials such as food and fuel.

    “We’re very optimistic about the holiday but we’re realistic that there are various factors weighing on people’s wallets”, explained Amazon’s Chief Financial Officer, Brian Olsavsky. This forecast about festive spending certainly spooked the markets with shares dropping close to 20% in after-hours trading on Thursday.

    Amazon has announced a hiring freeze as well as the intention to lease out some of its warehouse space in order to mitigate the impact. The company is nonetheless expecting a vast revenue for the forth quarter (between $140 billion and $148 billion) with growth anticipated somewhere between 2 and 8%.

    Amazon
    AMZN
    chief executive Andy Jassy said in a statement: “There is obviously a lot happening in the macroeconomic environment, and we’ll balance our investments to be more streamlined without compromising our key long-term, strategic bets.

    “What won’t change is our maniacal focus on the customer experience, and we feel confident that we’re ready to deliver a great experience for customers this holiday shopping season.”

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    Kate Hardcastle, Contributor

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  • Small businesses brace for cautious holiday shoppers

    Small businesses brace for cautious holiday shoppers

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    NEW YORK (AP) — Small businesses are stocking the shelves early this holiday season and waiting to see how many gifts inflation-weary shoppers feel like giving.

    Holiday shopping was relatively strong during the past two years as shoppers flocked online to spend, aided by pandemic stimulus dollars. Sales in November and December have been averaging roughly 20% of annual retail sales, according to National Retail Federation, making the holiday season critical for many retailers.

    This year, small businesses are bracing for a more muted season, as some Americans spend more cautiously. AlixPartners, the global consulting firm, forecasts that holiday sales will rise between 4% to 7%, far below last year’s growth of 16%. With inflation running above 8%, retailers would see a decrease in real sales.

    To prepare, owners say they’re ordering inventory earlier to avoid the supply-chain snags that frustrated them the past two holiday seasons and to draw in early birds. They’re stepping up discounts as much as they can in the face of their own higher costs. And owners also hope more people will shop in stores and holiday markets after doing more of their shopping online during the pandemic.

    Max Rhodes, CEO of Faire, an online marketplace used by small businesses to sell their wares wholesale as well as buy goods for retail shops, said he’s seeing earlier ordering from merchants who for two years had trouble getting enough holiday inventory stocked in time for Christmas. Stores faced shortages of everything from holiday décor to gift items as COVID-19 lockdowns forced factories to shut, costs rose and fewer shipping containers and truckers were available — all causing delivery snarls.

    A study for the Council of Supply Chain Management Professionals by global consulting firm Kearney found U.S. business logistics costs surged 22.4% in 2021 to $1.85 trillion.

    “There’s a bit of a hangover from that, a bit of fear,” Rhodes said. While it’s too early for sales data, the term “Christmas” was the most searched for term on the site in mid-September. That’s two weeks earlier than last year, and eight weeks earlier than 2020, Rhodes said.

    “The one thing we’re certain of is it’s not going to be predictable … We really don’t know what to expect and our retailers feel the same way,” Rhodes said .

    Mat Pond operates The Epicurean Trader in San Francisco, including four brick-and-mortar stores, an online shop and a corporate gift basket business. In past years, he started building inventory in November, but this year he’s already stocking up on items such as gourmet food, chocolate, wine and giftware. He’s seeing corporations order holiday gift baskets earlier as well.

    “Everyone’s planning ahead,” Pond said. “I think everybody’s learning from the past two years.”

    While the pandemic’s economic impact has subsided somewhat, consumers are now being tag-teamed by high inflation and rising interest rates. Overall, spending has held up, although some Americans have been forced to pull back on discretionary items. Any decline can be meaningful because consumer spending makes up 70% of economic activity.

    Hannah Nash, the owner of the online jeweler Lucy Nash, expects sales of her earrings, bracelets and other jewelry to slow after two years of strong growth. The main culprit: inflation.

    “There is less money going around to the average person and we expect their living expenses to impact how much they can spend on holiday shopping,” Nash said.

    Nash also expects more people to shop in stores during these holidays. She started her business, based in Indianapolis, during the pandemic, when online shopping boomed. The percentage of total retail sales done online jumped from 11.5% in 2019 to 17.7% in 2020, then rose again to 18.8% last year, according the Mastercard SpendingPulse, which tracks all kinds of payments, including those by cash and debit card.

    Nash is stepping up discounts and offering bundles to attract shoppers: Her plans include a 15% discount for new customers this year, up from 10%, starting in November. And she’ll offer bundles of products that are about 20% cheaper than buying items separately.

    Major retailers such as Amazon and Walmart are also offering holiday deals to cash-strapped Americans earlier this year. Amazon held a two-day discount event on Oct. 11-12 where the average order was $46.68, $13 less than what shoppers spent during the company’s Prime Day sales event in July, according to the data group Numerator.

    Some business owners are hoping to take advantage of any shift to shopping in holiday markets and in stores.

    Kimberly Behzadi operates Read It & Eat Box in Buffalo, N.Y., which sells themed boxes with food and a book in each box. She started the business in 2020, during the pandemic. She has an online shop but is hoping the return of holiday markets to full capacity will boost sales. She depends a lot on the holidays — 40% of her annual revenue comes between October and December.

    She’s planning on being at six markets this year, with two more applications pending.

    “Last year, holiday markets were still limited by the necessary safety protocols for Covid-19 ,” she said. “This year, gratefully, we are able to attend and sell at more holiday markets locally, so my expectation is to double my holiday revenue this year.”

    Behzadi also plans on being more promotional.

    “With inflation rates high this year I expect consumers to be looking for deals, so I have adapted my holiday strategy to include more bundles and deals,” she said. She’s offering a $60 box that’s bundled with a blind-date book worth $25 for Black Friday, for example.

    Mariana Leung-Weinstein sells alcohol infused jam and marshmallows and other farm-inspired gifts at about 25 stores via her Wicked Finch Farm brand in Pawling, N.Y. that she started in 2019. She’s focusing on stocking up in stores in case online sales slow.

    “I expect people will enjoy seeing and touching things in person this time around, which puts more of my focus in getting my products in physical stores in time for the holidays,” she said.

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  • Retail sales flat in September as inflation takes a bite

    Retail sales flat in September as inflation takes a bite

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    NEW YORK — The pace of sales at U.S. retailers was unchanged in September from August as rising prices for rent and food chipped away at money available for other things.

    Retail sales were flat last month, down from a revised. 0.4% growth in August, the Commerce Department reported Friday. Retail sales fell 0.4% in July.

    Excluding sales of automobiles and at gas stations, retail sales rose 0.3%. Excluding gas sales, spending was up 0.1%

    While the report showed the resilience of the American consumer, the figures are not adjusted for inflation unlike many other government reports. In fact, sales at grocery stores rose 0.4%, helped by rising prices in food.

    Evidence that the Fed’s fight to cool the economy may be taking hold can also be seen, particularly with big-ticket items. Sales at auto dealers fell 0.4% last month, and shoppers continued to pull back on appliances, electronics and furniture, all categories that did well during the early part of the pandemic. Business at consumer electronics and appliance stores fell 0.8%.

    Sales at clothing stores rose 0.5%, while business at department stores rose 1.3% That indicates a solid back-to-school season but adjusted for inflation, spending was modest, analysts said. Business at restaurants rose 0.5%, while online sales ticked up at the same pace.

    Neil Saunders, managing director of GlobalData Retail said the report was “representative of an economy that is tightening and of a shopper that is becoming more discerning and cautious about what they buy.”

    Consumer spending accounts for nearly 70% of U.S. economic activity and Americans have remained mostly resilient even with inflation near four-decade highs. Yet surging prices for everything from mortgages to rent have upped the anxiety level. Overall spending has slowed and shifted increasingly toward necessities like food, while spending on electronics, furniture, new clothes and other non-necessities has faded.

    “Even if people are employed and on paper look reasonably comfortable they are not feeling comfortable, and they are very concerned about what’s to come next,” said Joel Rampoldt, a managing director in the retail practice at AlixPartners.

    Inflation in the United States accelerated in September, with the cost of housing and other necessities putting more pressure on households, eliminating pay gains and almost guaranteeing that the Federal Reserve will keep raising interest rates aggressively.

    Consumer prices, excluding volatile food and energy costs, jumped 6.6% in September from a year ago — the fastest such pace in four decades. And on a month-to-month basis, core prices surged 0.6% for a second straight time, defying expectations for a slowdown and signaling that the Fed’s multiple rate hikes have yet to ease inflation pressures. Core prices typically provide a better picture of underlying price trends.

    Overall prices rose 8.2% in September compared with a year earlier, down slightly from August, the government said Thursday in its monthly inflation report.

    It is a crucial period for retailers as they prepare for the holiday shopping season, which accounts on average for 20% of the industry’s annual sales. Inflation is already changing shopper habits, causing them to trade down to cheaper stores like Walmart and dollar stores and within aisles, switching to cheaper brands.

    Walmart and Target are among others that are pushing deals earlier while others are offering new financing for customers.

    Conn’s HomePlus, a Texas furniture and mattress chain that caters to households at the lower end of the economic scale, launched a new layaway program that caters to the 20% to 25% of the chain’s applicants not eligible to qualify for other financing.

    “(Shoppers’) ability to spend on discretionary is more limited than it was before, ” said CEO Chandra Holt. Sales on things like deluxe coffee makers other consumer electronics have faded, she said. .

    A slew of holiday forecasts from various research and consulting firms point to a sales slowdown from last year, but adjusted for inflation, retailers could actually see a decline. AlixPartners predicts holiday sales to be up anywhere from 4% to 7% from last year, which was up 16%, according to its calculations. The National Retail Federation, the nation’s largest retail trade group, hasn’t released its holiday forecast.

    Janet Barnes, a 42-year-old College Park, Maryland resident, says she’s trading down and going to cheaper stores for groceries as prices spike. Instead of Wegmans or Whole Foods, she now heads to the discount chain Lidl and said she saves about 40% in groceries. Thrift stores have replaced Nordstrom, she said.

    “We are creatures of habit, said Barnes. “But it is not a bad deal to see what else is going on — and test something else.”

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    Follow Anne D’Innocenzio: http://twitter.com/ADInnocenzio

    AP Economics Writer Chris Rugaber in Washington contributed to this report.

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