Positive consumption trends of shoppers help$Macy's (M.US)$Retail companies, such as those, avoided poor business conditions in the third quarter, with consumers using credit card lines to buy food and household goods at rising prices, while using big discounts to buy a backlog of big-ticket goods such as televisions and furniture. Although it is like Macy's,$Abercrombie & Fitch (ANF.US)$和$Best Buy (BBY.US)$The results of retailers have exceeded expectations, but sales are still falling, but the contraction is not as severe as the market expected.

This is largely because retailers launched promotions earlier this year than in previous years to clean up excess inventory. But executives are cautious and have repeatedly mentioned economic uncertainty. In addition, while high inflation and understaffing are still to be dealt with, the cost of unloading the backlog of inventory is expected to put pressure on profits.

A sense of foreboding hangs over the retail industry ahead of Black Friday (November 25) and the traditional American holiday shopping season, which usually begins with Black five. Some analysts believe that the US economy is facing the bleakest outlook for the holiday shopping season in recent years, and sales will struggle to break through the record high levels of the past few years. All clothing companies are conservative about their expectations for the fourth quarter, citing an uncertain macro environment and a drop in sales heat at the end of October and early November.

"that's true," David Shiffman, co-head of consumer retail at Solomon Partners, said of retailers' concerns about holiday sales. "the management team will look at the fourth quarter data every day."

Zhitong Financial APP learned that it came from Adobe Inc Inc. Statistics show thatTotal spending in this year's holiday shopping season is expected to rise 2.5 per cent from a year earlier, compared with 8.6 per cent last year and a staggering 32 per cent in 2020.However, these figures do not take into account inflation, which means that real sales are likely to fall further this year.

The differences between the middle class and the rich

The challenge is particularly acute for brands that cater to low-and middle-income consumers, who have become more cautious about buying non-essential consumer goods.For example, at Abercrombie & Fitch, which focuses on non-essential items such as trendy clothing and accessories, higher-priced namesake brands saw net sales rise in the third quarter due to price increases, while lower-cost Hollister brands declined.

"there are real differences between our brand and the consumers who buy our brand," Fran Horowitz, chief executive of Abercrombie, said in an interview. In the middle of the second quarter, Hollister customers did decline. This year they must be under inflationary pressure to control some of their choice of consumer spending. "

On the other hand, high-income consumers are still spending.Bloomingdale and Macy's$Gap Inc (GPS.US)$The sales performance of its Banana Republic is better than that of its parent's low-cost brands, which also shows that the consumption trend of high-income groups has not cooled down significantly.

Analysts at Moody's Corporation Investor Services spent in a report: "High-income families save more than other households and are much less sensitive to price increases." They point out that people in the top 40 per cent of income distribution save 4.5 times as much as they did before COVID-19 's epidemic. "as a result of wealth buffers, they have been spending, especially in services such as leisure and tourism."

The US consumer savings rate is in serious decline.

The data show that many consumers are still spending in a planned way. According to the latest survey data from Placer.ai, more than 3/4 of consumers expect to spend the same amount of shopping during the holiday period as in 2021 or slightly more than 2021, and 85% of consumers say they will at least do holiday shopping on Black Friday. Placer.ai is a location analysis company that tracks the flow of people.

But some consumers are more dependent on credit and the buy-and-pay option than they were a year ago, which may reflect a decline in the US household savings rate. Macy's said last week that more and more customers are using credit cards for spending.

The latest savings statistics showThe US personal savings rate fell from 3.40% in August 2022 to 3.10% in September.The market is also expected to remain near 3.1% of the low water level in October.

If the US economy does fall into recession, it could have a broader impact on spending across income groups. A growing number of economists are warning that a recession in the US could be imminent as the Fed continues to raise interest rates to curb inflation.

"given that the current savings rate is much lower than it was before the COVID-19 epidemic and the volatile stock market is reducing the total wealth of some households, the risk of a sharp slowdown in private spending will increase if inflation does not fall rapidly from current levels," said Claire Li, vice president of credit strategy at Moody's Corporation Investor Services.