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Retailers say customers are focusing on essentials

Kristin Schwab Mar 6, 2023
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Retailers are shifting focus to match inflation-weary customers' preferences for savings over slurging. George Frey/Getty Images

Retailers say customers are focusing on essentials

Kristin Schwab Mar 6, 2023
Heard on:
Retailers are shifting focus to match inflation-weary customers' preferences for savings over slurging. George Frey/Getty Images
HTML EMBED:
COPY

Between inflation and a possible looming recession, retailers are on edge. Macy’s says it’s doubling down on its store brands. Costco and Target say customers are focusing on essentials.

The more worried people are about their finances and the economy, the less loyal they are to their usual brands and stores.

“At the end of the day consumers really look for pricing and value,” said Landon Luxembourg, a retail analyst at Third Bridge. He thinks this puts stores like Dollar Tree and Costco in a good position.

Other big box stores are shifting their sales strategies — pushing private label products and changing inventory to focus more on necessities and less on discretionary items. So for example, they likely will not emphasize their electronics sections as much.

But Jessica Ramírez, a retail analyst at Jane Hali and Associates, says people still want to treat themselves — the treats are just smaller.

“Am I gonna buy a new suit jacket or am I going to buy a lipstick?” Ramírez said.

Target says beauty is one of its strongest performers right now, because while a full mani-pedi could feel like a splurge, a bottle of nail polish might be doable.

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