Economy
14 November 2022
The Week Ahead: Walmart & Target earnings, Q3 ecommerce sales
Check out the ecommerce calendar for Nov. 14-18.
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Welcome to a new week. Retail is the focus of the economy in the coming days. As Q3 earnings seasons rolls on, Walmart, Target and Home Depot are set to report results. Plus, the US Commerce Department is set to report the latest retail and ecommerce sales.
Here’s a look at the calendar:
Events
The countdown to Black Friday is on, but some holiday events have already arrived:
Walmart Black Friday Deals for Days: Walmart holds the second of three pre-Black Friday deals events. Walmart+ members get a head start on access to the savings on Nov. 14, followed by general availability on Nov. 16.
From YouTube to You: The video platform is ringing in holiday shopping with a series of livestreams, videos and Shorts. More than 30 of the platform’s biggest creators will feature brands such as POPFLEX, Ulta Beauty and TULA Skincare. Through Nov. 19
Economic indicators
Retail and ecommerce sales highlight this week’s data on the state of the consumer:
Consumer Inflation Expectations: The Federal Reserve of New York provides a snapshot of the consumer outlook on spending and the labor market. This is watched by policymakers for signs that inflation is becoming entrenched. Nov. 14, 11 a.m.
Producer Price Index: The US Commerce Department releases monthly data on the price of goods in the stages before they reach retail. Also known as the wholesale price index, this is known as a forward-looking measure of inflation. Nov. 15, 8:30 a.m.
Retail Sales: The US Commerce Department releases monthly data showing total retail sales across multiple categories. This is a key indicator of consumer demand, as well as performance of the retail sector as a whole. Nov. 16, 8:30 a.m.
Q3 Ecommerce Sales: The US Commerce Department releases data showing total ecommerce sales for the third quarter. This is a frequently referenced measure to gauge the growth of ecommerce, and its share of overall retail. Nov. 18, 10 a.m.
Housing Starts + Existing Home Sales: Monthly data for the housing market offers a look at new home construction that kicked off, and sales of homes that are already built. Nov. 17 + 18
Earnings
Earnings reports for the third quarter include reports from some of the largest retailers:
Monday, Nov. 14: ThredUp, Digital Brands Group, Oatly, Tuesday Morning
Tuesday, Nov. 15: Walmart, Home Depot, Lulu’s Fashion Lounge
Wednesday, Nov. 16: Target, Lowe’s
Thursday, Nov. 17: Gap, Inc., Macy's, Alibaba, Farfetch, Bath & Body Works, Kohls, Destination XL, Williams Sonoma
Friday, Nov. 18: Foot Locker
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Marketing
09 June
'There's a lot of ways to frame value'
Campbell Soup Company CEO Mark Clouse offered thoughts on messaging amid inflationary shifts in consumer behavior.
Photo by Kelly Common on Unsplash
After months of elevated inflation and interest rate hikes that have the potential to cool demand, consumers are showing more signs of shifting behavior.
It’s showing up in retail sales data, but there’s also evidence in the observations of the brands responsible for grocery store staples.
The latest example came this week from Campbell Soup Company. CEO Mark Clouse told analysts that the consumer continues to be “resilient” despite continued price increases on food, but found that “consumers are beginning to feel that pressure” as time goes on.
This shows up in the categories they are buying. Overall, Clouse said Campbell sees a shift toward shelf-stable items, and away from more expensive prepared foods.
There is also change in when they make purchases. People are buying more at the beginning of the month. That’s because they are stretching paychecks as long as possible.
These shifts change how the company is communicating with consumers.
Clouse said the changes in behavior are an opportunity to “focus on value within our messaging without necessarily having to chase pricing all the way down.”
“No question that it's important that we protect affordability and that we make that relevant in the categories that we're in," Clouse said. "But I also think there's a lot of ways to frame value in different ways, right?”
A meal cooked with condensed soup may be cheaper than picking up a frozen item or ordering out. Consumers just need a reminder. Even within Campbell’s own portfolio, the company can elevate brands that have more value now, even if they may not always get the limelight.
The open question is whether the shift in behavior will begin to show up in the results of the companies that have raised prices. Campbell’s overall net sales grew 5% for the quarter ended April 30, while gross profit margins held steady around 30%. But the category-level results were more uneven. U.S. soup sales declined 11%, though the company said that was owed to comparisons with the quarter when supply chains reopened a year ago and expressed confidence that the category is seeing a longer-term resurgence as more people cook at home following the pandemic. Snacks, which includes Goldfish and Pepperidge Farm, were up 12% And while net sales increased overall, the amount of products people are buying is declining. Volumes were down 7%.
These are trends happening across the grocery store. Campbell is continuing to compete. It is leading with iconic brands, and a host of different ways to consume them. It is following that up with innovation that makes the products stand out. Then, it is driving home messaging that shows consumers how to fit the products into their lives, and even their tightening spending plans.
Campbell Soup is more than 150 years old, and has seen plenty of difficult economic environments. It is also a different business today, and will continue to evolve. At the end of the day, continued execution is what’s required.
“If it's good food, people are going to buy it, especially if it's a great value,” Clouse said.
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