Considering three years of economic upheaval that have driven up prices and consumer resentment, consumer spending could be worse.
Lower-income consumers have been hit harder by rising prices for basics. And those higher prices overall have made customers more selective when they spend on things they want rather than things they need. Higher energy prices and borrowing costs, as well as stricter credit conditions and the return of student-loan payments, have also posed threats to demand.
Home-improvement retailer Home Depot Inc. HD, +1.29% reports results on Tuesday, as a tight supply of available homes, higher prices and mortgage rates continue to raise questions about homebuyer demand. Target TGT, +1.44% reports Wednesday, as more-expensive essentials leave its consumers with less room to spend outside the grocery section. Walmart WMT, +1.
Still, the National Retail Federation, an industry group, said it expected record spending during the holiday season, which it defined as Nov. 1 through Dec. 31. The group said it expected a sales increase of between 3% and 4% to a range of $957.3 billion to $966.6 billion. “I expect the recent rhythm of spending will continue into the holiday season and that consumers will continue to spend on a range of items and experiences but at a slower pace,” he continued.
Still, TJX recently said it would close a handful of stores, according to reports. And Target, in September, said it would close nine locations, citing theft, an issue that has become a bigger topic on earnings calls this year, amid reports of bold and sometimes violent heists. But with it have come more questions on how much the data backs up executives’ complaints.
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