The back-to-school season will be the first test to understand the health of the US market. But it is at Halloween that we will know whether a real downward spiral of consumption has been triggered in the States, or whether it is a physiological rebound after the post-Covid revenge shopping. US retail is experiencing a moment of uncertainty: performance remains generally good, but the signs are all pointing in the direction of a slowdown.
We saw this with Foot Locker and Nordstrom, but similar indications also came from the quarterly reports of Macy’s and Kohl’s (which speaks to the middle segment). “In the aggregate data, spending remains solid”, writes the New York Times. “July sales came in better than expected, allowing some economists to envision growth figures for the quarter. A buoyant job market and wage increases supported consumer confidence”.
By Halloween the truth
“We have been reckoning with the effects of inflation for some time now”, an analyst with the NYT observes, “we are getting to the point where savings are running out”. That the situation is changing can only be discerned from the shopping volumes (which are rearranging), but also from some indirect signs. The success of discount campaigns and outlet stores, as well as buy now pay later payment formulas, testify to the greater thriftiness of the US public.
But there are others that are just as indicative, such as the increase in credit card delinquencies reporting from Wall Street or cases of shoplifting in boutiques. The trend is clear, notes NYT: the public is reallocating their budgets towards necessity spending at the expense of discretionary spending, such as fashion items and fashion accessories. The back-to-school season will be the first test, but it is conditioned by the concomitance of student loan repayments. That’s why the spotlight is on Halloween, one of the main autumn shopping occasions: if it goes wrong, you can say it’s crisis time in the States.
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