Focus on CEO Says Consumers Need to Shop Less, Stay Home Among Inflationary Storm

“Some of the historic ways consumers react to inflation will play out again within 2022”

Consumer prices soared the  most in 40 years   in December, a stunning 7% from a year earlier which is crushing real wage increases and sending President Biden’s polling numbers to a new record low.

The Government Reserve is expected to start an inflation-crushing mission using the first-rate hike expected within March to tame pumpiing.

According to Target’s top executive, high inflation eating into wage increases is expected to directly impact US consumers who will need to drive less, eat at home, and reduce their shopping practices.  

Ceo Brian Cornell told attendees at a National Retail Federation event in New York upon Sunday that high inflation will derail consumer investing patterns. Many will holiday resort to cheaper generic-brand items to save money.  

“ Some of the historical ways consumers react to inflation will play out there again in 2022, ” Cornell said.

He mentioned consumers would “ generate fewer miles, and you’ll consolidate the number of times and areas where you shop. You’ll probably spend a little more eating at home vs your favorite restaurant, and you might make some trade-offs between the national brand and an own brand. ”

Compared to the last two years associated with stimulus-fueled retail spending, Cornell expects spending patterns to improve. He said a lot concerning the consumer would be understood in the next “ 60, 90, 120 days” in adapting towards the high inflation environment.  

As part of the fast recovery, fueled by trillions of dollars in monetary and fiscal aid, prices for cars, gas, meals, and furniture rose dramatically in 2021. As customers increased spending, supply stores became snarled, and costs increased further.  

In the new year, US inflation pressures show very little easing, and some economists predict the peak could be nearing. The high inflation issue has led rate markets to price in four rate hikes by Dec, with the first live meeting expected in March.  

Many consumers have  never seen anything like this   because they weren’t around in the 1970s and early eighties of high inflation. It just took then-Fed Chair Paul Volcker  to increase interest rates to double digits to acquire inflation which sent the economy into a deep recession.  

High inflation has put Biden on the spot ahead of midterms. The newest polling data shows the president’s popularity sunk to some new low this week.

Consumers feel the pinch around them, from the supermarket to the gas station. Cornell’s outlook for the consumer is usually gloomy, suggesting they might go in hibernation mode to weather conditions the inflationary storm.  

Owen Shroyer covers the ongoing health problems for individuals who take the vax.

 

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