Latest news with #MichaelGunther
Forbes
8 hours ago
- Business
- Forbes
Wealthier Americans Spending Less On Air Travel Amid Trump Tariff Unease
Affluent consumers, seen as the most resilient segment of travelers, are spending significantly less on airline tickets, according to new credit card data, signaling a potential threat for an industry that has banked on premium customers seeing them through these economic turbulent times. Photo illustration of luxury first class. Credit card spending on airline tickets by high-income consumers—those making over $150,000 annually—saw a 7% step down in growth over the 35 days leading up to May 25, according to new data from Consumer Edge, a provider of consumer spending data. Lower-income consumers had already pulled back on airline spending immediately following the announcement of Liberation Day tariffs, April data showed. The May data shows a reversal from March and April, as 'the highest-income group went from the best growth rate to the worst, and if that persists, that could be a problem [for airlines],' Michael Gunther, VP and head of insights at Consumer Edge, told Forbes. This data 'might be a potential forward indicator, because if a weakness is being seen today in the spend, that's probably forward bookings,' Savanthi Syth, an analyst at Raymond James covering the airline sector, told Forbes. On first-quarter earnings calls in April, major U.S. airlines universally acknowledged that the uncertain economy had created significant weakness in demand for 'main cabin,' or economy seats, but they insisted that demand for premium seats remained strong. For first and business class flying, revenue per kilometer (RPK, calculated by multiplying the number of paying passengers by the distance traveled) declined by a massive 26.2% year over year in North America, far outstripping the 4.2% decline seen globally, according to an April market analysis by the International Air Transport Association (IATA), a global trade association representing airlines. This year is shaping up to be a disappointment for America's airline industry. As recently as January, major U.S. airlines were forecasting revenue growth in 2025 compared to 2024. But by mid-April, a shaky economy, exacerbated by President Donald Trump's Liberation Day tariff announcement, compelled Delta, American, Southwest and JetBlue to pull their full-year guidance for 2025, while United Airlines hedged by offering dueling outlooks: one if there is a recession and another if not. Since the start of the year, the Dow Jones U.S. Airlines Index is down 13%. United and Delta stock are down 11% and 13%, respectively, while American and JetBlue shares are down 30% and 33%, respectively, since the beginning of the year. So far, so good, insist the airlines. 'International trends continue to be strong,' American Airlines CFO Devon May said last month at the Wolfe Research Global Transportation & Industrials Conference, adding that the carrier expects positive revenues from that segment in the second quarter. Acknowledging declines in inbound demand from Canada and Europe, Andrew Nocella, United Airlines' chief commercial officer, noted in April that 'U.S.-origin demand has more than compensated for these reductions.' It's unclear if American travelers' appetite for foreign destinations will wane, given the greenback has tumbled 6% year over year, according to the DXY, an index that measures the dollar against a basket of foreign currencies. Compared to this time last year, the dollar is down 5% versus the euro, 6% against the pound sterling and down 8% versus the Japanese yen. That means Americans will pay more on the ground compared to last year when they visit these countries. Strong premium demand in recent years inspired many airlines to overhaul cabin interiors across their fleets to give a bigger presence to premium features like lie-down seats. In their first-quarter earnings reports, airlines continued to bank on premium to compensate for softening demand for 'main cabin,' or coach seats. For example, Delta Air Lines president Glen Hauenstein told investors in April that 'in a recessionary climate, premium demand has shown greater resilience compared to main cabin demand.' This new data from Consumer Edge may expose a chink in that armor. 'A lot of international flying is already bought for the summer, right?' Syth told Forbes. 'But what happens after the summer? And so it's interesting—this is kind of the first data point for that higher-income household that I've heard as seeing softening.' The hotel industry is also being impacted by lower consumer confidence. Last week, CoStar and Tourism Economics downgraded their joint U.S. hotel forecast for 2025, now projecting only 1% growth in revenue per available room (RevPAR), down from 1.8%, citing cooling demand and increased risk factors such as weaker leisure and corporate travel. Trump's Tariffs Sent U.S. Airline Bookings Into A Tailspin, New Data Show (Forbes)
CNN
22-05-2025
- Business
- CNN
Tariffs are hurting Shein and Temu. Here's where shoppers are looking for deals instead
Data analytics firm Consumer Edge used US transaction data to track shoppers who stopped buying from Temu and Shein and isolate how their spending has shifted. Michael Gunther, the company's Head of Insights, shares the findings.
CNN
22-05-2025
- Business
- CNN
Tariffs are hurting Shein and Temu. Here's where shoppers are looking for deals instead
Data analytics firm Consumer Edge used US transaction data to track shoppers who stopped buying from Temu and Shein and isolate how their spending has shifted. Michael Gunther, the company's Head of Insights, shares the findings.
Fibre2Fashion
19-05-2025
- Business
- Fibre2Fashion
US retailers see surge as spending slows on Temu & Shein
A sharp deceleration has been witnessed in US consumer spending growth in April on ultra-discount Chinese retailers like Temu and Shein, as per Consumer Edge (CE), a leading provider of global consumer data-driven insights. In the three weeks leading up to April 27, American brands including Old Navy, Ulta Beauty, Nordstrom Rack and Savers Value Village picked up a significant amount of redirected consumer dollars from former Temu and Shein shoppers. Consumer Edge data reveals a sharp slowdown in US consumer spending growth on Temu and Shein in April 2025, amid rising US-China trade tensions and policy changes. Former shoppers redirected spending to American retailers like Old Navy and Ulta Beauty. Temu's growth fell from 50 per cent to near zero, and Shein's from 30 per cent to 20 per cent. According to the data, Temu's US year-over-year spend growth slowed sharply in April 2025—decelerating from nearly 50 per cent growth at the start of the month to almost zero growth by the end. Shein experienced a similar deceleration; with year-over-year spend growth declining from approximately 30 per cent to around 20 per cent during the same period. This dramatic slowdown coincides with rising US-China trade tensions, the elimination of the duty-free de minimis treatment for low-value imports and a reduction in advertising spend that had previously fuelled both platforms' rapid growth. To identify where consumers spent their money, Consumer Edge analysed shoppers who made at least two purchases at Temu or Shein in January or February 2025 but no purchases in March or April, as per the study. "The data isn't just showing a slight dip — we're seeing a rapid reallocation of spend from these popular Chinese discount platforms, and we're able to isolate exactly who's driving it," said Michael Gunther, vice president, head of insights, Consumer Edge . "Our cohort analysis gives us the ability to track what former Temu and Shein shoppers are doing now—not just in general, but down to the specific brands seeing surges in growth among this group. The current political and economic climate, including policy shifts and pricing pressures, is causing US consumers to alter their spending behaviour drastically. Our near-real-time data shows where this significant shift in spend is landing." Fibre2Fashion News Desk (RR)
New York Post
14-05-2025
- Business
- New York Post
Tariffs slam Temu, Shein — and send shoppers to US department stores
Shoppers have fled Temu and Shein after President Trump slapped the Chinese sites with hefty tariffs – spending their dollars instead at US department stores like Nordstrom Rack and Kohl's, according to data exclusively shared with The Post. Temu saw its spending growth among US customers plummet in April, slowing from nearly 50% year-over-year growth at the start of the month to nearly 0% at the end, according to credit and debit card data analyzed by Consumer Edge. Shein also suffered a steep decline in US spending growth, cooling from 30% at the start of April to just 20% at the end. 4 Temu saw its spending growth among US customers plummet in April. REUTERS That spending slowdown is no coincidence. In early April, Trump ended the de minimis exemption, a trade loophole that both Temu and Shein used to avoid paying taxes while sending low-value packages to the US. They were hit with a 120% tariff overnight, forcing the retailers to hike prices and halt shipments of Chinese products. The White House lowered that rate to 54% on Tuesday. In the three weeks ended April 27, former Temu and Shein shoppers spent 21% more at Nordstrom Rack than the year before, according to Consumer Edge. That's more than the 12% overall spend growth at Nordstrom Rack. 'It could be that these folks have been shopping at department stores for a while, were attracted to affordable prices from Temu and Shein, and then became a little cold on those brands amid everything going on,' Michael Gunther, vice president and head of insights at Consumer Edge, told The Post. Former Temu and Shein shoppers – who made multiple purchases at the Chinese sites earlier in the year but none in March or April – brought their business to Bloomingdale's, Old Navy and Kohl's over the same three weeks, according to Consumer Edge. They spent 52%, 12% and 6% more at these retailers than the year before, outpacing overall spending growth from all customers, according to the data. 4 Former Temu and Shein shoppers spent 21% more at Nordstrom Rack than the year before, according to the data. Stefano Giovannini Much like Temu and Shein, department stores are a one-stop shop – selling apparel, footwear, beauty products, furniture and kitchen appliances. 'There's a huge selection, lot of different brands, lot of different types of products in one place,' Gunther told The Post. 'Maybe it's that sort of thing that's similar to the mindset of someone who might have been shopping at Temu before.' Along with department stores, these shoppers' appetite for a good deal led them to spend more on fashion subscription services, which rent out high-end clothing at discounted prices. Former Temu and Shein customers spent 59% more at Nuuly, an apparel subscription service owned by the same firm as Anthropologie. 4 Former Temu and Shein shoppers spent 6% more at Kohl's than the year before, according to the data. AP They increased their purchases at thrift stores, as well, spending 45% more at second-hand retail chain Savers. That spending trend 'really speaks to not just the wide selections available on these sites, similar to Temu and Shein, but also people looking to purchase on a budget,' Gunther told The Post. 'You want a wide-ranging, diverse wardrobe, but you don't want to spend too much. This is a way to do that,' he added. 4 It's unclear whether the shift away from Temu and Shein will continue. REUTERS There's also been a 42% spending surge by these customers at which connects shoppers with Chinese wholesalers. Chinese wholesale suppliers have taken to TikTok to advertise highly-discounted goods to US shoppers. It's unclear whether the shift away from Temu and Shein will continue. It depends largely on how consumer sentiment fares over the next few weeks and whether the 54% tariff remains in place, Gunther said. And the White House's 30% tariff on Chinese goods – temporarily lowered from 145% for 90 days – could send prices soaring for US retailers selling clothing manufactured overseas, make department stores less attractive.
