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A&M Five Insightful Minutes on Consumer Sentiment With Chad Lusk · Omni Talk Retail

• 0:10
  Joining
• 0:10
  us
• 0:10
  now
• 0:10
  for
• 0:10
  five
• 0:11
  insightful
• 0:11
  minutes
• 0:11
  is
• 0:12
  longtime
• 0:12
  friend
• 0:12
  of
• 0:13
  the
• 0:13
  show
• 0:13
  and
• 0:13
  partner
• 0:14
  and
• 0:14
  managing
• 0:14
  director
• 0:14
  at
• 0:15
  the
• 0:15
  A
• 0:15
  and
• 0:15
  M
• 0:15
  Consumer
• 0:16
  and
• 0:16
  Retail
• 0:16
  Group,
• 0:16
  Chad
• 0:17
  Lusk.
• 0:17
  Chad
• 0:18
  will
• 0:18
  be
• 0:18
  discussing
• 0:18
  with
• 0:18
  us
• 0:19
  the
• 0:19
  results
• 0:19
  of
• 0:19
  A&M
• 0:20
  CRG's
• 0:20
  most
• 0:20
  recent
• 0:21
  biannual
• 0:22
  consumer
• 0:23
  sentiment
• 0:23
  survey
• 0:24
  report.
• 0:24
  The
• 0:25
  report
• 0:25
  draws
• 0:25
  from
• 0:25
  a
• 0:25
  survey
• 0:26
  of
• 0:26
  over
• 0:26
  2100
• 0:28
  demographically
• 0:29
  representative
• 0:29
  US
• 0:30
  adults
• 0:30
  and
• 0:31
  analyzes
• 0:31
  how
• 0:31
  shifting
• 0:32
  economic
• 0:32
  conditions,
• 0:33
  among
• 0:33
  other
• 0:33
  purchase
• 0:34
  trends,
• 0:34
  are
• 0:35
  shaping
• 0:35
  consumer
• 0:36
  spending
• 0:36
  behaviors.
• 0:37
  So,
• 0:38
  Chad,
• 0:38
  in
• 0:38
  your
• 0:39
  last
• 0:39
  two
• 0:39
  reports,
• 0:40
  you
• 0:40
  indicated
• 0:40
  some
• 0:41
  major
• 0:41
  projected
• 0:42
  pullbacks
• 0:42
  in
• 0:42
  terms
• 0:43
  of
• 0:43
  consumer
• 0:43
  confidence
• 0:44
  and
• 0:45
  future
• 0:45
  spending
• 0:46
  plans.
• 0:47
  What
• 0:47
  are
• 0:47
  consumers
• 0:48
  saying
• 0:48
  their
• 0:48
  next
• 0:49
  six
• 0:49
  months
• 0:49
  and
• 0:50
  holiday
• 0:50
  spending
• 0:51
  will
• 0:51
  look
• 0:51
  like?
• 0:53
  Yeah,
• 0:53
  Chris.
• 0:53
  Well,
• 0:54
  you
• 0:54
  mentioned
• 0:55
  there's
• 0:55
  been
• 0:55
  a
• 0:55
  steady
• 0:55
  erosion
• 0:56
  in
• 0:57
  consumer
• 0:57
  confidence
• 0:58
  and
• 0:58
  plans
• 0:58
  to
• 0:58
  spend
• 0:59
  for
• 0:59
  a
• 0:59
  while
• 0:59
  now.
• 1:00
  Now,
• 1:00
  there
• 1:00
  was
• 1:01
  a
• 1:01
  major
• 1:01
  step
• 1:02
  change
• 1:02
  downward
• 1:02
  last
• 1:03
  holiday
• 1:03
  season
• 1:04
  and
• 1:04
  that
• 1:04
  behavior
• 1:05
  has
• 1:05
  held.
• 1:06
  Only
• 1:06
  29%
• 1:07
  of
• 1:07
  consumers
• 1:08
  plan
• 1:08
  to
• 1:09
  spend
• 1:09
  more
• 1:10
  over
• 1:10
  the
• 1:10
  coming
• 1:10
  six
• 1:11
  months.
• 1:11
  That's
• 1:11
  down
• 1:11
  1100
• 1:12
  basis
• 1:13
  points
• 1:13
  from
• 1:13
  a
• 1:13
  low
• 1:13
  point
• 1:14
  this
• 1:14
  time
• 1:14
  last
• 1:14
  year.
• 1:16
  Worth
• 1:16
  calling
• 1:16
  out.
• 1:17
  We
• 1:17
  fielded
• 1:18
  this
• 1:18
  survey
• 1:18
  prior
• 1:18
  to
• 1:19
  the
• 1:19
  election.
• 1:20
  Of
• 1:20
  course,
• 1:20
  now
• 1:21
  we're
• 1:21
  past
• 1:21
  it.
• 1:22
  But
• 1:22
  what
• 1:22
  consumers
• 1:22
  told
• 1:23
  us
• 1:23
  is
• 1:23
  the
• 1:23
  uncertainty
• 1:24
  of
• 1:24
  the
• 1:24
  election
• 1:25
  itself
• 1:25
  did
• 1:26
  not
• 1:26
  have
• 1:26
  a
• 1:26
  strong
• 1:26
  influence
• 1:27
  on
• 1:27
  their
• 1:27
  decisions.
• 1:28
  What
• 1:28
  they
• 1:29
  told
• 1:29
  us
• 1:29
  is
• 1:29
  that's
• 1:30
  speculative.
• 1:31
  And
• 1:31
  until
• 1:31
  I
• 1:31
  see
• 1:32
  real
• 1:32
  changes
• 1:33
  in
• 1:33
  inflation,
• 1:34
  interest
• 1:34
  rates,
• 1:35
  the
• 1:35
  job
• 1:35
  market,
• 1:36
  I'm
• 1:36
  going
• 1:36
  to
• 1:36
  continue
• 1:37
  to
• 1:37
  curtail
• 1:37
  spending.
• 1:38
  So
• 1:38
  what
• 1:38
  does
• 1:38
  that
• 1:39
  mean
• 1:39
  for
• 1:39
  holiday
• 1:40
  Households
• 1:41
  plan
• 1:41
  to
• 1:41
  spend
• 1:41
  about
• 1:42
  9%
• 1:42
  net
• 1:43
  less
• 1:43
  this
• 1:43
  holiday
• 1:44
  season
• 1:44
  compared
• 1:44
  to
• 1:45
  last.
• 1:45
  And
• 1:46
  that's
• 1:46
  expected
• 1:46
  by
• 1:47
  reducing
• 1:47
  both
• 1:47
  total
• 1:48
  gift
• 1:48
  volume,
• 1:49
  not
• 1:49
  just
• 1:49
  average
• 1:49
  spend
• 1:50
  per
• 1:50
  gift.
• 1:51
  And
• 1:52
  what
• 1:52
  does
• 1:52
  that
• 1:52
  mean
• 1:52
  then,
• 1:53
  Chad,
• 1:53
  for
• 1:54
  retailers
• 1:54
  when
• 1:55
  it
• 1:55
  comes
• 1:55
  to
• 1:55
  more
• 1:55
  discretionary
• 1:56
  categories?
• 1:59
  Yeah,
• 1:59
  for
• 1:59
  sure
• 2:01
  it's
• 2:01
  troublesome.
• 2:02
  But
• 2:02
  what's
• 2:03
  interesting
• 2:03
  is
• 2:03
  we
• 2:03
  may
• 2:04
  be
• 2:04
  seeing
• 2:05
  further
• 2:05
  shifts
• 2:05
  in
• 2:05
  what
• 2:06
  consumers
• 2:06
  are
• 2:06
  considering
• 2:07
  discretionary
• 2:08
  versus
• 2:09
  basic
• 2:09
  needs
• 2:10
  right
• 2:10
  before
• 2:10
  our
• 2:10
  eyes.
• 2:11
  So
• 2:11
  for
• 2:11
  instance,
• 2:12
  for
• 2:12
  the
• 2:12
  first
• 2:13
  time
• 2:13
  this
• 2:13
  cycle
• 2:14
  where
• 2:15
  consumers
• 2:16
  said
• 2:16
  they'll
• 2:17
  get
• 2:17
  more
• 2:18
  conservative,
• 2:19
  anticipated
• 2:20
  spend
• 2:20
  in
• 2:20
  fresh
• 2:21
  food
• 2:21
  went
• 2:22
  down.
• 2:22
  So
• 2:23
  normally
• 2:23
  fresh
• 2:24
  food
• 2:24
  goes
• 2:24
  up
• 2:25
  at
• 2:25
  the
• 2:25
  expense
• 2:25
  of
• 2:26
  restaurant
• 2:26
  prepared
• 2:27
  food
• 2:27
  spend
• 2:27
  and
• 2:28
  delivery.
• 2:28
  This
• 2:29
  time
• 2:29
  fresh
• 2:29
  food
• 2:30
  interest
• 2:30
  went
• 2:31
  down
• 2:31
  in
• 2:31
  favor
• 2:32
  of
• 2:32
  dry
• 2:32
  packaged
• 2:33
  grocery.
• 2:34
  So
• 2:34
  the
• 2:34
  trade
• 2:34
  offs
• 2:35
  are
• 2:35
  going
• 2:35
  one
• 2:35
  cut
• 2:36
  deeper
• 2:36
  for
• 2:37
  consumers.
• 2:38
  Another
• 2:38
  example,
• 2:39
  wellness
• 2:39
  and
• 2:39
  fitness
• 2:40
  took
• 2:40
  a
• 2:40
  major
• 2:40
  step
• 2:41
  back,
• 2:41
  too.
• 2:41
  It
• 2:41
  had
• 2:41
  been
• 2:42
  holding
• 2:42
  on
• 2:43
  pretty
• 2:43
  strong,
• 2:43
  but
• 2:44
  looks
• 2:44
  like
• 2:44
  that's
• 2:44
  falling
• 2:45
  back
• 2:45
  as
• 2:45
  well
• 2:45
  as
• 2:45
  far
• 2:46
  as
• 2:46
  a
• 2:46
  discretionary
• 2:47
  category.
• 2:47
  So
• 2:48
  it's
• 2:48
  a,
• 2:48
  it's
• 2:48
  a
• 2:48
  fine
• 2:49
  line
• 2:49
  households
• 2:50
  are
• 2:50
  straddling
• 2:50
  now.
• 2:51
  So
• 2:51
  we
• 2:52
  also
• 2:52
  ask
• 2:52
  consumers,
• 2:53
  if
• 2:53
  things
• 2:53
  do
• 2:54
  improve
• 2:54
  and
• 2:54
  you
• 2:54
  have
• 2:55
  additional
• 2:55
  income,
• 2:56
  where
• 2:56
  will
• 2:56
  you
• 2:56
  put
• 2:56
  it?
• 2:57
  So
• 2:58
  the
• 2:58
  lower
• 2:58
  household
• 2:59
  income
• 2:59
  brackets
• 2:59
  are
• 3:00
  more
• 3:00
  inclined
• 3:00
  to
• 3:00
  either
• 3:01
  bank
• 3:01
  it
• 3:02
  or
• 3:02
  put
• 3:02
  it
• 3:02
  toward
• 3:03
  Groceries,
• 3:04
  which
• 3:04
  implies
• 3:05
  that
• 3:05
  they're
• 3:05
  still
• 3:05
  well
• 3:06
  below
• 3:06
  their
• 3:06
  satisfaction
• 3:07
  of
• 3:07
  basic
• 3:07
  needs,
• 3:08
  whereas
• 3:09
  upper
• 3:09
  household
• 3:10
  income
• 3:10
  brackets
• 3:10
  are
• 3:10
  ready
• 3:11
  to
• 3:11
  put
• 3:11
  it
• 3:11
  toward
• 3:11
  more
• 3:12
  discretionary
• 3:12
  purchases
• 3:14
  like
• 3:15
  dining
• 3:15
  out,
• 3:15
  delivery,
• 3:16
  travel
• 3:17
  and
• 3:17
  entertainment.
• 3:18
  So
• 3:18
  there's
• 3:18
  some
• 3:18
  hope
• 3:19
  there.
• 3:20
  So,
• 3:20
  Chad,
• 3:21
  I
• 3:21
  want
• 3:21
  to
• 3:21
  go
• 3:21
  deeper
• 3:21
  into
• 3:21
  what
• 3:22
  you
• 3:22
  just
• 3:22
  said.
• 3:22
  So
• 3:23
  will
• 3:23
  cutting
• 3:23
  back
• 3:24
  on
• 3:24
  discretionary
• 3:25
  categories
• 3:26
  be
• 3:26
  enough
• 3:26
  for
• 3:27
  consumers
• 3:27
  or
• 3:27
  do
• 3:27
  you
• 3:27
  think
• 3:27
  consumers
• 3:28
  will
• 3:28
  also
• 3:28
  change
• 3:29
  their
• 3:29
  habits
• 3:30
  in
• 3:30
  regards
• 3:30
  to
• 3:30
  other
• 3:31
  basic
• 3:31
  needs
• 3:31
  as
• 3:31
  well?
• 3:33
  Yeah.
• 3:33
  So
• 3:33
  given
• 3:34
  the
• 3:34
  longstanding
• 3:35
  financial
• 3:36
  pressures
• 3:36
  we've
• 3:36
  been
• 3:37
  seeing
• 3:37
  this
• 3:37
  cycle,
• 3:38
  we
• 3:38
  went
• 3:38
  deeper
• 3:39
  with
• 3:39
  consumers
• 3:39
  on
• 3:40
  how
• 3:40
  they
• 3:40
  plan
• 3:40
  to
• 3:40
  cut
• 3:41
  back
• 3:41
  and
• 3:41
  in
• 3:42
  particular
• 3:42
  against
• 3:43
  basic
• 3:43
  needs
• 3:44
  like
• 3:44
  groceries
• 3:45
  and
• 3:45
  others.
• 3:46
  So
• 3:46
  an
• 3:46
  interesting
• 3:47
  insight
• 3:47
  emerged
• 3:48
  here.
• 3:48
  So
• 3:49
  consumers
• 3:49
  are
• 3:50
  more
• 3:50
  likely
• 3:50
  to
• 3:51
  change
• 3:51
  their
• 3:51
  purchase
• 3:52
  behavior
• 3:53
  than
• 3:53
  their
• 3:53
  shopping
• 3:54
  behavior.
• 3:54
  So
• 3:55
  what
• 3:55
  does
• 3:55
  that
• 3:55
  mean?
• 3:56
  Consumers
• 3:56
  were
• 3:57
  25
• 3:57
  to
• 3:57
  30%
• 3:58
  more
• 3:59
  likely
• 3:59
  to
• 3:59
  switch
• 4:00
  to
• 4:00
  a
• 4:00
  cheaper
• 4:01
  brand
• 4:01
  or
• 4:02
  product
• 4:02
  at
• 4:03
  the
• 4:03
  same
• 4:03
  store
• 4:04
  than
• 4:04
  switch
• 4:05
  to
• 4:05
  a
• 4:05
  different,
• 4:06
  that
• 4:06
  is
• 4:06
  Less
• 4:06
  expensive
• 4:07
  retailer.
• 4:08
  So
• 4:08
  the
• 4:08
  fascinating
• 4:09
  point
• 4:09
  there
• 4:09
  is
• 4:09
  that
• 4:10
  consumers
• 4:10
  will
• 4:10
  exhibit
• 4:11
  more
• 4:12
  retail
• 4:12
  banner
• 4:13
  loyalty
• 4:14
  over
• 4:14
  product
• 4:15
  brand
• 4:15
  loyalty
• 4:15
  when
• 4:16
  deciding
• 4:16
  how
• 4:16
  to
• 4:16
  cut
• 4:17
  back.
• 4:17
  So
• 4:18
  that's
• 4:18
  encouraging
• 4:19
  for
• 4:19
  retailers
• 4:20
  and
• 4:21
  critical
• 4:21
  to
• 4:22
  ensure
• 4:22
  that
• 4:22
  they
• 4:22
  have
• 4:23
  a
• 4:23
  proper,
• 4:24
  good,
• 4:24
  better
• 4:24
  best
• 4:25
  merchandising
• 4:26
  strategy,
• 4:26
  including
• 4:27
  private
• 4:27
  label
• 4:28
  with
• 4:28
  clear
• 4:28
  indications
• 4:29
  of
• 4:29
  that
• 4:29
  value
• 4:30
  on
• 4:30
  shelf.
• 4:32
  That's
• 4:32
  interesting,
• 4:32
  Chad.
• 4:33
  It
• 4:33
  makes
• 4:33
  me
• 4:33
  wonder
• 4:34
  because
• 4:34
  last
• 4:34
  year
• 4:34
  we
• 4:34
  were
• 4:35
  talking
• 4:35
  about,
• 4:35
  especially
• 4:35
  around
• 4:36
  holiday,
• 4:36
  that
• 4:36
  this
• 4:37
  was
• 4:37
  going
• 4:37
  to
• 4:37
  be
• 4:38
  a
• 4:38
  much
• 4:38
  more
• 4:38
  digital,
• 4:39
  digital
• 4:39
  forward
• 4:40
  holiday
• 4:41
  customers
• 4:41
  were
• 4:41
  going
• 4:41
  to
• 4:41
  be
• 4:42
  shopping
• 4:42
  online.
• 4:43
  Do
• 4:43
  you
• 4:43
  think
• 4:44
  that's
• 4:44
  going
• 4:44
  to
• 4:44
  be
• 4:44
  the
• 4:44
  case
• 4:45
  again,
• 4:45
  especially
• 4:45
  with
• 4:46
  the
• 4:46
  banner
• 4:46
  loyalty
• 4:47
  that
• 4:47
  you
• 4:47
  just
• 4:47
  mentioned?
• 4:49
  Yes,
• 4:50
  I
• 4:50
  do.
• 4:50
  And
• 4:51
  frankly
• 4:51
  that'll
• 4:52
  probably
• 4:52
  never
• 4:52
  change.
• 4:54
  38%
• 4:55
  are
• 4:55
  planning
• 4:56
  to
• 4:56
  shop
• 4:56
  even
• 4:56
  more
• 4:57
  online
• 4:57
  than
• 4:57
  in
• 4:58
  previous
• 4:58
  years.
• 4:59
  And
• 4:59
  there
• 4:59
  was
• 4:59
  a,
• 4:59
  there
• 5:00
  was
• 5:00
  already
• 5:00
  a
• 5:00
  70%
• 5:01
  online
• 5:02
  versus
• 5:02
  in
• 5:02
  store
• 5:03
  preference
• 5:03
  for
• 5:03
  holiday
• 5:04
  shopping
• 5:04
  last
• 5:04
  year.
• 5:05
  But
• 5:06
  that's
• 5:06
  for
• 5:06
  holiday.
• 5:06
  So
• 5:07
  listen,
• 5:07
  for
• 5:07
  the
• 5:07
  past
• 5:08
  seven
• 5:09
  cycles
• 5:09
  we've
• 5:09
  done
• 5:09
  this
• 5:10
  report,
• 5:10
  nothing's
• 5:10
  really
• 5:11
  changed
• 5:11
  here,
• 5:11
  right?
• 5:12
  In
• 5:12
  store
• 5:12
  is
• 5:13
  preferred
• 5:13
  by
• 5:13
  about
• 5:14
  two
• 5:14
  thirds
• 5:14
  of
• 5:14
  consumer.
• 5:15
  But
• 5:17
  the
• 5:17
  generational
• 5:18
  patterns
• 5:18
  are
• 5:18
  interesting.
• 5:19
  Right.
• 5:19
  Your
• 5:19
  spikes
• 5:20
  for
• 5:21
  in
• 5:21
  store
• 5:22
  preferential
• 5:22
  shopping
• 5:23
  come
• 5:23
  from
• 5:23
  ages
• 5:24
  55
• 5:24
  and
• 5:25
  up
• 5:25
  and
• 5:26
  under
• 5:26
  34
• 5:27
  with
• 5:27
  a
• 5:28
  little
• 5:28
  valley
• 5:28
  in
• 5:28
  the
• 5:28
  middle.
• 5:29
  And
• 5:29
  not
• 5:30
  surprisingly,
• 5:30
  the
• 5:30
  in
• 5:31
  store
• 5:31
  appeal
• 5:32
  is
• 5:33
  for
• 5:33
  different
• 5:33
  reasons.
• 5:34
  Right.
• 5:34
  Everyone
• 5:34
  wants
• 5:35
  the
• 5:35
  ability
• 5:35
  to
• 5:36
  touch
• 5:36
  and
• 5:36
  feel
• 5:37
  products
• 5:37
  and
• 5:38
  have
• 5:38
  immediate
• 5:39
  product
• 5:39
  availability.
• 5:40
  That's,
• 5:40
  that's
• 5:40
  common.
• 5:41
  But
• 5:42
  older
• 5:42
  demos
• 5:42
  are
• 5:43
  looking
• 5:43
  for
• 5:44
  better
• 5:44
  promos
• 5:45
  and
• 5:45
  deals
• 5:45
  in
• 5:45
  store
• 5:47
  and
• 5:47
  you
• 5:47
  know,
• 5:47
  younger
• 5:48
  demos.
• 5:48
  Talk
• 5:49
  about
• 5:49
  just
• 5:49
  wanting
• 5:49
  to
• 5:50
  get
• 5:50
  out
• 5:50
  of
• 5:50
  the
• 5:50
  house.
• 5:51
  Yeah.
• 5:51
  Something
• 5:51
  to
• 5:52
  do.
• 5:53
  Right.
• 5:54
  So
• 5:55
  unlike
• 5:56
  other
• 5:56
  consumer
• 5:57
  trends
• 5:57
  where
• 5:58
  older
• 5:58
  shoppers
• 5:59
  are
• 5:59
  helping
• 6:00
  prop
• 6:00
  up
• 6:01
  kind
• 6:01
  of
• 6:01
  a
• 6:01
  waning
• 6:02
  consumer
• 6:02
  preference,
• 6:03
  here
• 6:03
  we
• 6:04
  see
• 6:04
  no
• 6:04
  signs
• 6:04
  of
• 6:05
  in
• 6:05
  store
• 6:05
  shopping
• 6:06
  going
• 6:06
  away.
• 6:06
  And
• 6:06
  retailers
• 6:07
  can
• 6:07
  be
• 6:07
  comfortable
• 6:08
  continuing
• 6:09
  to
• 6:09
  invest
• 6:09
  in
• 6:10
  the
• 6:10
  right
• 6:10
  set
• 6:10
  of
• 6:10
  merchandise
• 6:11
  and
• 6:11
  experiences.
• 6:12
  But
• 6:13
  going
• 6:13
  back
• 6:13
  to
• 6:13
  holiday,
• 6:14
  I
• 6:14
  mean,
• 6:14
  it
• 6:14
  is
• 6:14
  a
• 6:14
  similar
• 6:15
  story
• 6:15
  with
• 6:16
  online
• 6:16
  apps
• 6:17
  loyalty.
• 6:18
  As
• 6:18
  you
• 6:18
  skew
• 6:19
  older,
• 6:20
  consumers
• 6:20
  are
• 6:21
  looking
• 6:21
  for
• 6:22
  additional
• 6:22
  value
• 6:23
  out
• 6:23
  of
• 6:23
  their
• 6:24
  online
• 6:24
  searching.
• 6:25
  As
• 6:25
  you
• 6:26
  skew
• 6:26
  younger,
• 6:27
  the
• 6:27
  more
• 6:27
  they
• 6:27
  prioritize
• 6:28
  smooth
• 6:28
  and
• 6:29
  seamless
• 6:29
  user
• 6:29
  experience.
• 6:30
  So
• 6:30
  retailers
• 6:31
  really
• 6:31
  need
• 6:31
  to
• 6:31
  meet
• 6:32
  both
• 6:32
  this
• 6:32
  holiday
• 6:33
  and
• 6:33
  always.
• 6:34
  Thanks
• 6:35
  Chad.
• 6:35
  Always.
• 6:35
  Great
• 6:35
  stuff,
• 6:36
  Chad.
• 6:36
  Thank
• 6:36
  you.