According to extensive research, Americans are tightening their purse strings, especially when it comes to certain products such as non-essentials. Various chain retailers, such as Macy’s, Dick’s Sporting Goods, and Lowe’s home improvement, have seen a significant decrease in profits in 2023 compared to last year.
What these and other stores have noticed is that while American consumers are still spending, they are using their money for necessary goods, such as groceries, instead of apparel and home goods.
From high mortgage rates to increased rents, as well as student loans, credit card debt, and, of course, inflation across the country, most American citizens are struggling. And when the American population struggles, so do the country’s retailers.
Macy’s has reported that the company’s total sales for the last quarter were a dismal 8% lower than the same quarter last year. It also stated that they were forced to offer extreme sales to push spring inventory out the door, which directly led to a decrease in profits.
Lowe’s, the popular home improvement store, stated that it is seeing far fewer DIY shoppers than in recent years. Although there was a surge of DIY projects during the pandemic, Lowe’s claims that the rising interest prices have also led to less spending from new homeowners around the country.
But while many Americans have been forced to cut back on spending, some have even resorted to theft to save money. In fact, stores around the country have noticed an incredible increase in inventory shrinking due to theft.
Dick’s Sporting Goods is one of these companies; Dick’s stated that it’s seen an intense 23% drop in sales and profits compared to 2022, and it believes at least part of this decrease is because of the increase in petty and organized theft.
Dick’s CFO, Naveep Gupta, told the press, “The number of incidents and the organized retail crime impact came in significantly higher than we anticipated.”
And Dick’s is not the only company affected by the increase in theft; Target has also reported more theft and even violent theft this year. Target CEO Brian Cornell said that these thefts have doubled in 2023 compared to 2022. In fact, Target lost $1.2 billion in 2023 due to theft, an incredible amount compared to the $700 million it lost last year.
However, while many stores are reporting significant losses, there are some that are actually benefiting from the new consumer trends. Specifically, Walmart is doing exceptionally well at the moment.
Although Walmart is still struggling with theft, in general, because Americans are trying to make their dollar go as far as possible, many are opting to shop for everything they need at the big-box store where prices are distinguishably lower than at most other retailers.
Walmart CFO John David Rainey told analysts exactly that last week when he said, “Customers are stretching their dollars further and seeking better value across more categories, more often.”
