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How's the American consumer doing? Recent comments by executives and companies provide clues. Some cite healthy spending behaviors, while others see people trying to get ahead of tariffs for imported goods.
A leading homebuilder said that consumer confidence was a factor in the slow start of spring sales. A German manufacturer of educational toys has said that its category can be resilient in recessionary periods. And a big grocer said it's seeing plenty of value-seeking in its aisles.
Here's a roundup of some observations about the state of the American spender so far this year.
Some Shoppers Seek to 'Tighten Their Pocketbooks'
The grocery store Albertsons (ACI), on Tuesday, said that it hasn’t noticed a significant change in consumer behavior. However, it did note that “consumer confidence is low.” CFO Sharon McCollam stated on a conference called that consumers “say they will do what has been done, which is to find ways to tighten up their pockets and seek value,” according to a transcription provided by AlphaSense.
Executives said that this means relying on promotions and buying products from proprietary brands.
According to retail insights company Pass_by, foot-traffic data, grocery stores, clothing stores, shoe stores, specialty stores and liquor stores all saw increases in visitors last weekend.
“This isn’t just about inflation anymore—consumers are clearly reacting to tariff headlines by buying what they fear will soon become more expensive or harder to find,” said Vice President of Marketing James Ewen. It’s rare to witness such coordinated spikes in essentials, apparel and specialty foods all within one week.
Executives said that Netflix (NFLX), a streaming giant, did not report results on Thursday. Members do not appear to be cancelling plans or switching to cheaper ones at unexpected rates.
"Based on what we are seeing by actually operating the business right now, there's nothing really significant to note," CEO Greg Peters said. "So what are we looking at, primary metrics and indicators would be our retention, that's stable and strong."
Entertainment spending, Peters said, "has been pretty resilient in tougher economic times. Netflix, specifically, also has been generally quite resilient, and we haven't seen any major impacts during those tougher times, albeit, of course, over a much shorter history."
Slower home buying; wealthy travelers keep spending
There are signs Americans are delaying big purchases. However, some may be moving up their car purchases to get ahead of the expected price increases due to tariffs.
Paul Romanowski, CEO of homebuilder D. R. Horton (DHI) said in its earnings call Thursday that the “spring selling season started slower than expected as potential homebuyers have been more cautious due to continued affordability constraints and declining consumer confidence.”
High-end travelers have remained resilient despite the pressure on airlines this year.
“The high-end, wealthy consumer, who takes global vacations and wants to sit in a Premium Seat, seems to have been less impacted thus far,” United Airlines Chief Commercial Officer Andrew Nocella stated during Wednesday’s earnings conference call.
American Express (AXP), in its latest quarterly financial update, said that the demand for credit cards is in line as expected.
“We're seeing our customers act as they have acted in the past," said CEO Steve Squeri on a conference call. "Our card members may say they don't have any confidence in the economy, but they still continue to spend, and they're not spending off what's in the market."
In its earnings call on Wednesday, Italian luxury fashion brand Moncler received a question about its U.S. customers. Luciano Santel, the Chief Corporate and Supply officer, said that he was and is still more concerned about the current and future state of the American economy, and consumer confidence, than tariffs.
Jan Middelhoff of German toymaker Tonies called American consumers a “very healthy group” in the company’s earnings conference call earlier this month. He also said that toys are a “recession resilient category.”
“The last thing parents are saving on are their kids' presents or expenses for kids,” CEO Tobias Wann said. “Kids do not care about tariffs. I can tell you that the average time spent playing last week was the exact same.” [as] the week before and the weeks before,."
Middelhoff stated in the call that the category is a good one and the American consumer is a good one. He also said he believes the consumer sentiment will improve once the shock from the current market changes has subsided.
