Good morning. I’ve spent the last few days digesting consumer data. Countless headlines breathlessly touted a Black Friday bargain after MasterCard Sending Pulse estimated that retail sales rose 4.1% to a new record on the biggest shopping day of the year, with online spending easily outpacing in-store purchases. Salesforce has seen strong growth online in dollar terms and is forecasting the same trends on Cyber Monday.
But CEOs still have plenty of reasons to worry, especially those at any consumer-facing company. For one thing, spending growth is driven almost entirely by inflation and not by shoppers buying more items. Salesforce, which tracks online spending, found that order volumes fell 1% from last year, while average selling prices increased 7%. Volumes have barely changed in 2024 either, so consumer spending has stagnated for two years now.
On the other hand, Adobe found that consumer use of “Buy Now, Pay Later” services, particularly popular among younger consumers, increased 11% on Black Friday compared to last year, suggesting that these shoppers are struggling to maximize their budget. The richest were of course once again the exception, buoyed by a stock market that makes them feel rich: Salesforce found that luxury clothing and accessories saw the biggest growth of any category, up 21%.
All of this data highlights a consumer who, at the lowest income level, is overworked but willing to spend on items they consider worth it. In other words, retail spending trends remain somewhat stagnant, echoing what top executives have been telling Wall Street over the past two weeks during retail earnings season. Here’s a look at how top Fortune 500 CEOs view the landscape heading into the all-important holiday season:
“Customers remain resilient but focused on transactions and attracted to more predictable sales moments. » –Corie Barry, CEO of Best Buy
“Our customers have more and more choices while their discretionary income remains under pressure. These customers are increasingly savvy and looking for more value.”—Michael Bender, CEO of Kohl’s
“They want quality and price to coexist. Sentiment is at a three-year low due to concerns about jobs, affordability and rates. Yet they remain emotionally motivated.”Rick Gomez, Target’s chief commercial officer
“There is a trend towards innovation and newness in the products that are coming in and keeping the consumer really energized. And retailers who combine good prices with a wide range of interesting merchandise and modern customer service remain the winners.”Lauren Hobart, CEO of Dick’s Sporting Goods
“Everything we’ve seen so far makes us optimistic and encouraging about customers and members looking ahead to seasonal events and the holiday shopping period. » –John David Rainey, Walmart CFO
—Phil Wahba
Contact the CEO daily via Diane Brady at diane.brady@fortune.com
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CEO Daily is compiled and edited by Joey Abrams and Claire Zillman.
