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Miami Herald
09-04-2025
- Business
- Miami Herald
Tariffs are the latest test of beleaguered US consumers
The escalating trade war between the United States and more than 180 other nations may be trying consumers' last nerve. "Dynamic shifts in consumption are already occurring across consumer groups and retail segments," Marshal Cohen, Circana's chief retail industry adviser, said in a statement. "The consumer is in a state of confusion and trying to decipher how to prioritize their purchases in an environment of significant change." A number of countries have retaliated against a slew of new tariffs from the Trump administration with tariffs of their own, which threatens to raise prices on a range of goods, including apparel and footwear, electronics, furniture and food. But several forces, and not just tariffs, are fueling the uncertainty bedeviling the U.S. consumer, according to a Monday report from Circana. High prices, rising debt, concerns among Hispanic consumers about the immigration crackdown, extreme weather and natural disasters are all upending spending patterns, Circana said. Inflation, which has already strained household budgets, is set to get another push upward, since the point of the levies is to raise prices and make certain goods less affordable, Wells Fargo economists led by Tim Quinlan said in a Friday research note. The 20-point tariff rate bump announced April 2 will drive the personal consumption inflation rate 1.8 percentage points beyond the baseline forecast, and the effect is even larger for core inflation, according to their model. "At the heart of tariffs lies an effort to increase prices to achieve various policy objectives (e.g., greater domestic production, negotiating leverage, tax revenues)," Quinlan said. "The tariffs announced on April 2 are set to do that in spades." This could further sap consumer spending power and/or business profits, and undermine investments and hiring, they said. "Assuming tariffs rise by the full amount proposed and stay in place through 2026, real GDP growth would effectively stall in Q2 before turning negative in the third quarter, highlighting the heightened risk of recession," Quinlan said. Last week the National Retail Federation warned of lower GDP growth and "a slower trajectory for consumer spending," largely due to the uncertainty around tariffs and their effects. The group expects retail sales this year to grow between 2.7% and 3.7%, reaching $5.4 trillion to $5.5 trillion. Some of those forces, like weather events, are regional, or, in the case of Hispanic consumers, specific to certain groups. For the first time in two years, Hispanic consumer demand is underperforming non-Hispanic consumers, Circana said, a phenomenon already noticed by off-price retailers. In general, since 2020, as prices on essentials rose while wage growth lagged, the effect on demand for discretionary goods has been "noticeable," Circana said. In 2023, for example, general merchandise reached a peak average price increase of 25% over 2019 levels, pushing demand down as much as 9%. In Q4, the average price increase of goods sold was up 17% and unit demand was down 7%. This shift also included a consumer shift toward value options like private label and off-price. Earnings guidance for the year has largely failed to account for slack in the U.S. economy from the Trump administration's downsizing of the federal government and the immigration crackdown, according to a research note from UBS Global Research analysts led by Bhanu Baweja, who call immigration and the fiscal impulse "two big supports to growth" in the last three to four years. The tariffs therefore are arriving "on the back of an economy already slowing: The US consumer was already showing clear signs of fatigue," UBS said. Copyright 2025 Industry Dive. All rights reserved.
Yahoo
28-02-2025
- Business
- Yahoo
Feb. 28 is Economic Blackout Day: What does that mean?
The Brief On Feb. 28, there's been a call for a 24-hour "economic blackout" when U.S. residents are encouraged to avoid spending any money. The grassroots organization that is encouraging the blackout is called the People's Union USA. The blackout is a protest against the influence of billionaires, big corporations and both political parties on American lives. On Feb. 28, there's been a call for a 24-hour "economic blackout" to protest the alleged malign influence of billionaires, big corporations and both major political parties on the lives of working Americans. Dig deeper An "economic blackout" is a time when U.S. residents do not spend any money as an act of "economic resistance." The movement was encouraged by the People's Union USA, a grassroots organization "dedicated to economic resistance, government accountability, and corporate reform,"according to the union's website. The organization's website says it's not tied to a political party but stands for all people. Requests for comment sent to the group's email address this week did not receive a reply. Feb. 28 is just the first date of the "economic blackout," according to the organization. What they're saying "February 28 is a symbolic start to economic resistance, a day where we show corporations and politicians that we control the economy." The date itself is not tied to any historical event and has no underlying meaning. The planned blackout is scheduled to run from 12 a.m. ET through 11:59 p.m. ET on Friday. The activist group advised customers to abstain from making any purchases, whether in store or online, but particularly not from big retailers or chains. It wants participants to avoid fast food and filling their car gas tanks, and says shoppers with emergencies or in need of essentials should support a local small business and try not to use a credit or debit card. The People's Union USA is encouraging future "economic blackout" events beginning Friday through April. These future blackouts include more specific targets, such as an Amazon Blackout and a Walmart Blackout, as well as several more 24-hour economic blackout days. Timeline March 7-14: Amazon Blackout (No Amazon purchases, no Whole Foods, no Prime orders) March 21-28: Nestle Blackout (Boycotting Nestle-owned brands "due to water exploitation, child labor and corporate greed.") March 28: 24-hour economic blackout No. 2 April 7-13: Walmart Blackout April 18: 24-hour economic blackout No. 3 April 21-27: General Mills Blackout (" Exposing food industry corruption and the poisoning of our families.") Some retailers may feel a slight pinch from Friday's broad "blackout," which is taking place in a tough economic environment, experts said. Renewed inflation worries and President Donald Trump's threat of tariffs on imported goods have already had an effect onconsumer sentiment. What they're saying "The (market share) pie is just so big," Marshal Cohen, chief retail advisor at market research firm Circana, said. "You can't afford to have your slices get smaller. Consumers are spending more money on food. And that means there's more pressure on general merchandise or discretionary products." Still, Cohen thinks the overall impact may be limited, with any meaningful sales declines more likely to surface in liberal-leaning coastal regions and big cities. The backstory Other boycotts have produced different results. Target saw a drop in sales in the spring and summer quarter of 2023 that the discounter attributed in part to customer backlash over a collection honoring LGBTQ+ communities for Pride Month. As a result, Target didn't carry Pride merchandise in all of its stores the following year. It was a different story for Bud Light, which spent decades as America's bestselling beer. Sales plummeted in 2023 after the brand sent a commemorative can to a transgender influencer. Bud Light's sales still haven't fully recovered, according to alcohol consulting company Bump Williams. The Source Information for this article was gathered from The Associated Press and the People's Union USA website. This story was reported from Los Angeles.
Associated Press
27-01-2025
- Business
- Associated Press
Consumers Take a New Year's Respite from Spending Following Last-Minute Holiday Lift, Reports Circana
CHICAGO, Jan. 27, 2025 (GLOBE NEWSWIRE) -- CHICAGO, January 27, 2025 — The U.S. consumer showed up for holiday shopping in a big way in the final weeks of 2024, but returned to their pre-holiday spending behavior once the festivities ended and new distractions emerged. In the combined five weeks ending January 4, 2025, there was a 9% increase in discretionary retail dollar sales and 5% growth in unit demand compared to the same period a year ago, according to Circana ™, a leading advisor on the complexity of consumer behavior. This December growth was partly a result of the shift of Cyber Week to December from the November timing in 2023, just one example of shifts in the calendar impacting year-over-year performance comparisons during the season. The final results of the core U.S. holiday shopping season, beginning with Black Friday and carrying through the end of the year, was 2% dollar growth and a 1% increase in unit sales for discretionary general merchandise. Total retail sales for the year, including discretionary general merchandise, retail food and beverage, and non-edible consumer packaged goods (CPG), also grew 2% in dollars and 1% in units. 'Economic concerns kept consumers focused on needs, and the U.S. presidential election distracted them from early season spending. Then, calendar shifts created an abbreviated shopping period between Thanksgiving and Christmas that renewed a sense of urgency that spilled into the additional last-minute shopping days after Super Saturday,' said Marshal Cohen, chief retail industry advisor for Circana. 'Ultimately, the resiliency of the consumer remained strong and resulted in the moderate growth anticipated at the season's start.' Discretionary spending quickly shifted back to the established baseline performance in January as consumers resumed their focus on needs and value. During the combined weeks ending January 11 and 18, discretionary spending was flat compared to the prior year. Major environmental events impacting the country, from a widespread winter storm and extreme cold to the Southern California wildfires, are also impacting retail. Unit demand was up 1% during the first two full weeks of the year. Retail spending on food and CPG products remains elevated over last year with unchanged demand. 'Consumers are taking a post-holiday spending respite, still facing higher prices on non-discretionary items, while also dealing with a new set of distractions,' added Cohen. 'The consumer resiliency demonstrated by Holiday 2024 and the year's overall retail results are a good sign for retail, but marketers need to be prepared for inevitable distractions that will impact the types of products purchased and the timing of spending as consumers continue to prioritize purchases around immediate need.' Circana is a leading advisor on the complexity of consumer behavior. Through superior technology, advanced analytics, cross-industry data, and deep expertise, we provide clarity that helps almost 7,000 of the world's leading brands and retailers take action and unlock business growth. We understand more about the complete consumer, the complete store, and the complete wallet, so our clients can go beyond the data to apply insights, ignite innovation, meet consumer demand, and outpace the competition. Learn more at
