Retailers have a new headache for holiday season
Americans across the entire country are causing concern to big retailers as they’re giving preference to travel and other experiences rather than shopping for goods. Read on to learn more!
Since the pandemic has gotten under control, more Americans are willing to travel.
This holiday season poses a new threat to big retailers across the country in the form of travel. Each day, more and more Americans are willing to return to the skies, book hotels and tour around. And what’s more, they are willing to spend more money on trips than on retailers.
That is undoubtedly setting up the biggest holiday season battle for consumers’ wallets since 2019. This year’s ongoing inflation increase so far is the big winner as it’s already straining entire household budgets during a make-or-break quarter for retailers.
But this is not the only challenge for retailers this year, as they’re still selling off excess inventory. Big stores are trying to lure consumers who might have overspent during the pandemic, and entice shoppers who have also become more budget-conscious due to economic factors.
As for the travel industry, 2022 has been a year of recovery. Airbnb, Delta Airlines and payment company Mastercard are a few of the big names enjoying windfalls. A series of other companies have also indicated a change towards experiences.
Live Nation Entertainment reported double-digit numbers regarding attendance growth in arenas, festivals, stadiums and theaters. As fall began, Starbucks also reported that its customers are spending more on pricy drinks, such as their trademark pumpkin spice lattes.
People are more interested in experiences and services
Michael Miebach, the CEO of Mastercard, said on a quarterly earnings call in October that the trend towards experiences expenses continues to grow. The company noticed a significant strength in airline, restaurant and lodging spend, and a shift away from big retailers that focus on appliances and home furniture.
The fallback in spending on products already has most retailers warning of bad times ahead. In late October, Amazon shocked the investing world by reporting a much weaker forecast for the holidays as its e-commerce growth slowed down. The company also announced a hiring freeze. Whirlpool also felt the hit and cut back its estimates.
One of the biggest shipping companies in the U.S., FedEx, missed its expectations in a September report. Raj Subramaniam, the company’s CEO, said he believes a worldwide recession is on its way. Most retailers sales reports were low in September, signaling that inflation is definitely taking its toll on most consumers.
Other big retailers like Home Depot, Macy’s, Target and Walmart are expected to deliver an update to investors within the next couple of weeks. Over the summer, both Target and Walmart disappointed investors with a detailed financial report on excess inventory.
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Learn how you can prepare for Black Friday
But if you plan on taking advantage of big retail sales during Black Friday, we can help you prepare for it. Check out the link below to learn a few important tips on how you can save money and still have fun during the year’s biggest shopping day.
About the author / Aline Barbosa
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