Executives from major retailers such as Target, Walmart and Lowe’s are saying one thing about the state of U.S. shoppers as COVID-19 Delta fears spread, and consumers, well, appear to be doing the complete opposite.
Consumer spending has ticked lower in key categories this month since July, according to new research out of Goldman Sachs Chief Economist Jan Hatzius. The call out comes in the wake of disappointing reads on July retail sales and August consumer confidence in recent days.
“The softness in activity appears to be driven by renewed virus fears — 53% of adults now ascribe at least moderate health risk to ‘normal’ activities (vs. 28% in June) — and the decline in spending partly reflects a slowdown in some virus-sensitive services,” points out Hatzius.
Goldman found that activity at restaurants has declined by 5% since the start of August, which coincides with renewed mask mandates by some cities amid the spread of the Delta variant. Transportation Security Administration (TSA) traveler throughput and hotel activity have been relatively unchanged over the past few weeks after bouncing back earlier in the summer.
Norwegian Cruise Line CEO Frank Del Rio said on Yahoo Finance Live this week variant concerns have weighed on near-term booking trends as consumers become a bit more cautious.
“There is no hiding it. The spread of the Delta variant has got consumer confidence lower,” Del Rio conceded.
Those cautious comments were echoed by Hyatt CEO Mark Hoplamazian on Yahoo Finance Live, too.
Despite consumers beginning to pullback a bit on spending, retail execs have struck a mostly upbeat tone on their third quarter outlooks and current trends as earnings have trickled in this week.
“Back-to-school and back-to-college are off to really strong starts,” Target Chairman and CEO Brian Cornell told Yahoo Finance on a media call to discuss second quarter earnings. The comments echo what Walmart CFO Brett Biggs told Yahoo Finance a day earlier.
Both companies handily beat second quarter earnings forecasts, and raised their full-year profit outlooks in the hopes the consumer stays engaged with stores and online.
Meanwhile, Lowe’s said on its earnings report Wednesday that sales in August have been strong.
Whether sales at these retailers stay strong in the face of data indicating a thriftier, nervous consumer — only time will tell.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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Read More:COVID-19 Delta variant is dragging down spending, Goldman Sachs charts reveal
2021-08-18 16:43:20
