Speaker 1: This is Bloomberg Business Week with Carol Masser and Bloomberg
Speaker 1: Quick Takes Tim Stinovic on Bloomberg Radio. We've talked a
Speaker 1: lot about consumer spending. It does seem like consumers are
Speaker 1: out there, and I am curious about kind of the
Speaker 1: back to school shopping season and what she is bringing.
Speaker 1: So let's bring in Mary Lou Gardner, Associate partner for
Speaker 1: Consumer Package Goods, Retail and Logistics at Emphasis Consulting. She's
Speaker 1: on the phone from Naples, Main may Low. It is
Speaker 1: nice to have you here with Paul and myself. Tell
Speaker 1: us a little bit about what the work you guys
Speaker 1: are doing and what you're seeing when it comes to
Speaker 1: back to school shopping. Sure, Hi Carol, Hi Paul. Nice
Speaker 1: to be on with you with bloom So what we're
Speaker 1: seeing right now is kind of an interesting show. We're
Speaker 1: seeing a shift from online shopping more into retail, which is,
Speaker 1: you know, kind of a flip from last year. But
Speaker 1: what we're seeing and what we're expecting is consumers are
Speaker 1: expecting to spend up, going to spend more but get less,
Speaker 1: meaning the I spend more for each item because of inflation,
Speaker 1: and then with the whole shrink inflation. You know that
Speaker 1: if they buy a box of crans, for example, they're
Speaker 1: going to get less crans in the box. So there's
Speaker 1: um that going on. But then there's the other half
Speaker 1: of the population that they're saying they're going to spend less.
Speaker 1: They have to spend less because of the pressures on
Speaker 1: their budget. They can spend They're going to buy what
Speaker 1: they absolutely need for back to school, so be the
Speaker 1: crans and the pencils and the composition books, but kind
Speaker 1: of hold off on some of the other more discretionary items.
Speaker 1: For example, maybe wait to buy that backpack, or wait
Speaker 1: to buy that lunchbox so we use one from the
Speaker 1: year before. So they're really trying to be smart about
Speaker 1: their choices and how they use their spending dollars. How
Speaker 1: are retailers adopting here? Is this simply a function of
Speaker 1: lowering price to lore shoppers in the store or get
Speaker 1: them to click. What's really the strategy for this back
Speaker 1: to school? So retailers are you know there, as you know,
Speaker 1: are struggling because they still have the excess inventory. So
Speaker 1: let's use Walmart and as an example. Walmart and um
Speaker 1: Target have both been very transparent about the fact that
Speaker 1: they had excess inventories. Um, they're trying to pull people
Speaker 1: out of the food aisle where they're spending most of
Speaker 1: their dollars and trying to pull them into the other aisles.
Speaker 1: So clothing is a really good example where they're investing
Speaker 1: in price and clothing in order to pull them beyond
Speaker 1: you know, just filling their basket with their food, with
Speaker 1: their dollars they have to spend. But they're investing in
Speaker 1: some categories like that that the retailer isn't look like
Speaker 1: they're going to win. Back to school? Are the more
Speaker 1: discounted mass retailers dollar store versus kind of online and
Speaker 1: versus some of the more expensive ones. Merrily, What does
Speaker 1: it tell you about the mindset of the consumer right now?
Speaker 1: More broadly speaking? And um, the outlook for spending which
Speaker 1: has been so it's always important to the US economy specifically,
Speaker 1: but you know, we all kind of marvel that the
Speaker 1: consumer has been out there and being able to continue spending.
Speaker 1: We do under when it stops. So what does it
Speaker 1: tell you, if anything, more broadly about consumers. Yeah, So
Speaker 1: what we're hearing from the consumers is there you know,
Speaker 1: there are little cautiously optimistic but also being still being cautious.
Speaker 1: So they are still spending, but what you know, inflation
Speaker 1: has come down a tiny bit and gas prices have
Speaker 1: come down a little bit. That hasn't necessarily translated to
Speaker 1: prices coming down in retail because there's still the increased
Speaker 1: labor costs are still the you know, supply chain pressures,
Speaker 1: so they're not seeing it. So they're still being cautious
Speaker 1: and they don't want to be in a situation where
Speaker 1: we really do head into a recession at some point
Speaker 1: in time. And you know, there's they have only so
Speaker 1: much in that budget, so if they're not out there,
Speaker 1: they're not making more, it's you don't be salaries didn't
Speaker 1: keep pace with inflation, so there dollars have to stretch further.
Speaker 1: So while they're spending more going into this season, there's
Speaker 1: still trying to be a lot smarter about it. And
Speaker 1: I think through Caustius, how yeah, may us, how about electronics?
Speaker 1: It seems like every kid when he or she was
Speaker 1: working from home, I had to have a laptop or
Speaker 1: chrome thing. Majigi, where are we now? And that kind
Speaker 1: of spending is that facing some tough comps? So yes,
Speaker 1: there there forecasted to be down year over year. Electronics
Speaker 1: definitely will be down. There's two things contributing to that.
Speaker 1: One is that many of the schools have provided some
Speaker 1: of the technology, you know, that was needed when we
Speaker 1: were in that hybrid model and people didn't have the technology.
Speaker 1: And then it's one of those categories where if you
Speaker 1: look at if I don't need the technology right now,
Speaker 1: why don't I wait until Black Friday where the prices
Speaker 1: may be a lot more competitive. Or I'm going to
Speaker 1: use that laptop or you know that the iPad or
Speaker 1: whatever technology I have been using, I'm used that for
Speaker 1: another year or two because I don't need it. Um,
Speaker 1: I don't need to upgrade it to still be able
Speaker 1: to go to school and do my homework. All Right,
Speaker 1: we're gonna leave it there, Hey, Mary Lou, thank you
Speaker 1: so much. Mary Lou Gardner. She's Associate partner for Consumer
Speaker 1: Package Goods, Retail and Logistics of an Emphasis, Consulting on
Speaker 1: the phone from Naples, Main