Illustration: Aïda Amer/Axios
A mixed bag of reports from mega retailers this week reveals where consumers are immune to inflation.
Why it matters: Record levels of price increases this year have hurt many families, but in some cases, a return to pre-pandemic attitudes and activities has overruled cautious spending.
Driving the news: Makeup was in high demand last quarter, driving sales for Macy's and Kohl's, the companies reported today.
- "[People] see this as a need ... even during inflationary times, they need to replenish their lipstick or makeup or cosmetics and skin care," Jill Timm, Kohl's CFO, told analysts on a call.
- Luggage, dressy clothing, career apparel, fragrances and shoes were also big drivers for Macy's as travel and events have rebounded.
- Then there's home improvement and decor, which continued to be a popular pastime and helped Home Depot and Lowe's reach strong results.
The big picture: Grocery and gas still dominate household budgets, which propelled BJ's and Walmart in the third quarter.
- BJ's CEO Bob Eddy said this morning that they're continuing to see an increase in shopping from lower-income households, which he attributed to "value" offerings.
- Interestingly enough, higher income households sought more deals too — flocking more frequently to BJ's and Walmarts — as they also continued to splurge on handbags and gifts at Macy's.
What they're saying: Middle-income consumers are getting particularly squeezed, buying fewer items per trip and trading down to "value-oriented private brands," Kohl's CFO Jill Timm noted.
What to watch: Retail executives were cautiously optimistic about the current quarter — suggesting consumers are expecting heavy discounts this year and waiting closer to the holidays to buy.
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