Americans Are Shopping Smarter, Not Harder

Estimated reading time: 3 minutes

Bounce Back

After five consecutive months of rising retail sales, it’s clear that American consumers aren’t afraid to treat themselves, even in an uncertain economic landscape.

Discretionary spending is bouncing back from its pandemic slowdown, helped, in part, by high prices that keep sales chugging along.

And that’s just it: Higher prices mean Americans are pickier about where and how they spend.

Picky Pockets

Current spending patterns aren’t uniformly benefiting every retailer. Major stores like Target (TGT) have seen a pullback on goods that are necessities, leading the department store giant to slash its full-year outlook.

At the same time, demand for some high-end products is as healthy as ever. Lululemon (LULU) reported an 11% spike in sales last quarter, even as its leggings are priced around the $100 mark. The company’s recently-announced partnership with Peloton (PTON) sent the latter’s shares soaring 15% on the news. This suggests both brand and quality still matter to consumers — and they may be willing to downgrade on other things in order to afford it.

Another retailer profiting off the high price environment is T.J. Maxx (TJX), which saw a 7.7% rise in sales, signaling its selection of premium items at discounted prices is striking the right chord with shoppers seeking value in both price tags and labels.

Consumer Conquest

Why does all this matter? Shopping behavior is important because much of the U.S. economy is driven by consumer spending. If people keep their wallets shut, that’s bad for economic growth.

For now, Americans are still spending, they’re just selective about it. With the holiday shopping season gearing up, retailers, economists and investors will keep their eyes on the cash register.

Disclaimer
SoFi Securities (Hong Kong) Limited and its affiliates (SoFi HK) may post or share information and materials from time to time. They should not be regarded as an offer, solicitation, invitation, investment advice, recommendation to buy, sell or otherwise deal with any investment instrument or product in any jurisdictions. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
SoFi HK does not make any warranties about the completeness, reliability and accuracy of this information and will not be liable for any losses and/or damages in connection with the use of this information.
The information and materials may contain hyperlinks to other websites, we are not responsible for the content of any linked sites. The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi HK. These links are provided for informational purposes and should not be viewed as an endorsement. The risk involved in using such hyperlinks shall be borne by the visitor and subject to any Terms of Use applicable to such access and use.
Any product, logos, brands, and other trademarks or images featured are the property of their respective trademark holders. These trademark holders are not affiliated with SoFi HK or its Affiliates. These trademark holders do not sponsor or endorse SoFi HK or any of its articles.
Without prior written approval of SoFi HK, the information/materials shall not be amended, duplicated, photocopied, transmitted, circulated, distributed or published in any manner, or be used for commercial or public purposes.