This isn't true, major retailers have been reporting falling demand.
I'd cite the WSJ but for some reason I can't paste the link in this box, just Google "falling demand Wal-Mart"
> enough to push prices and profits to record levels.
Adjust both for inflation
I think Walmart's story in particular is one of stupidly bad demand forecasting.
It is mostly discretionary spending that is down; Wal-Mart reported the largest fall in apparel iirc, but demand is demand. One would expect discretionary spending to fall first, and hopefully it stops there.
Again I apologize for not providing a direct citation due to my dumb mobile browser but these are days-old news stories and it should be easy to confirm
McDonalds et al. probably should've been investing a lot more in automating their kitchens. The fact that a huge percent of locations -- and all drive-thrus -- still use humans for the ordering process is, similarly, inexcusable.
Unless the US massively increases its low-skilled immigration quotes, robotics firms will be the FAANG equivalents of the 2020s-2030s.
For all the doom and gloom in the USA, it's still an incredibly rich country.
To be clear: I'm not making a moral statement here. This is a statement of fact, not a statement of ethical preference.
Suburb of top-tier cities? No. Cheapest suburb of a midwestern city? Absolutely.
Again, not saying it's reasonable. Just that it's possible.
Total household income. It is possible to accept a lower wage job if the rest of the family is making more. A spouse or older child can add to the family budget even if the primary breadwinner is making more.
Grants / subsidized housing of some sort. College students making a few extra dollars while living in the dorms where the major expenses are paid elsewhere.
Back to the older children and summer jobs. Getting a job to do something over the summer and get a bit of spending money of their own.
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Yes, lower paying jobs within higher cost of living areas are going to be having trouble finding people to work there. This has been a thing for many years. Even in the before times, there were constantly places that had "help wanted" signs out and were paying minimum wage. The ones in higher cost areas of the city were more likely to close resulting in more expensive restraints that can be supported by the people who are living the higher cost of living.
No. Restaurants will continue to exist. Sit down in particular. In cases where you are paying for an experience; the economics will get worse, but they will continue to exist.
Fast food restaurants will even continue to exist. But the latter only with substantial automation. This has already happened at the front of the house -- kiosks and apps are the "happy path" ordering interfaces at every McD's in a major city. I'm merely projecting that the most cost-sensitive segment of the food services industry will push that automation into the kitchen, the checkout line, and a lot of the administrative work that happens at branches.
Not suburbs, just towns, but there will be services and a hospital and so on.
I think it's unrealistic to expect retail goods to maintain the same highs they had during the pandemic. For a big chunk of the last two years, people couldn't go to concerts, bars and restaurants operated at limited capacity, vacation destinations had travel restrictions in place, etc. This lead people to take the discretionary income they would normally spend on those things and put it into retail goods that improve their lives stuck at home. TVs, game consoles, what have you. Now that restrictions are essentially nonexistent in the US, people are returning to those pre-COVID activities.
As OP said,
>> and services.
> Wal-Mart
WalMart's issue is that they have a massive inventory/demand mismatch. They already have the headwind of a shift from goods to services, and then on top of that they also massively mismanaged a shift in consumer preference within goods. I have a feeling that they are also feeling the squeeze from Amazon. Many households treat Prime as a fixed cost but the 20 minute drive out to Walmart is a real expense that can be substituted with Amazon purchases. Tonight's earnings will be interesting.
Compare to eg Visa [1].
I expect that the "last hoorah" spending of this summer will grind to a halt in the winter and by Q2 2023 we'll be able to see a massive decline in consumer spending during Q4 in particular.
But we aren't there yet, at least in aggregate, because consumers are spending like mad on services.
[1] https://www.reuters.com/business/finance/visa-quarterly-prof...
I'd rather not base my picture of the entire economy around a single retailer. What's going on with other retailers? Amazon, Best Buy, Target, etc? Have they more than picked up the slack that Wal Mart is seeing?
Or retailers in general. Retail spending is down because services spending is up -- people are going to the beach and buying plane tickets instead of buying TVs and patio furniture.
Regardless of whether we're in a recession, retailer numbers aren't a good indicator for the duration/depth/type. We spent all of 2020 hearing that demand was pulled forward. Well, it was pulled forward from somewhere, and now we are there.
> What's going on with other retailers?
Best Buy missed by a lot; sales down by over 10%; forecast was a 1% contraction.
Amazon tonight. Always complicated because of AWS, digital content, and now a substantial advertising business. If you want the retail details you have to go past the headline numbers.
Target in mid-August but expectations are similar.
My guess is that none of those companies will be hit has bad as Walmart because (1) Walmart was just particularly badly mismanaged, and (2) these other companies are just different in kind (particularly Amazon -- they could eg suffer retail losses while beating estimates on Advertising/Cloud)
>Regardless of whether we're in a recession, retailer numbers aren't a good indicator for the duration/depth/type. We spent all of 2020 hearing that demand was pulled forward. Well, it was pulled forward from somewhere, and now we are there.
All fair points.
>Best Buy missed by a lot; sales down by over 10%; forecast was a 1% contraction.
Ouch.