Some global consumers are showing signs of cracking, as shoppers stressed by record inflation stick to buying basics like food, bleach and cheap burgers, while those with bigger bank accounts are snapping up $3,000 Louis Vuitton handbags.
Investors are closely watching second quarter corporate results for signs economies are headed toward recession. But so far consumers are sending mixed signals. There is weakness seen in those that have been hit hardest by record fuel and food prices. Meanwhile, credit card and other data shows some are still spending on travel and other high-end pursuits.
Walmart sounded a warning shot on Monday, issuing a rare profit warning. Its US customers, who tend to come from lower-income households, are buying food and other essentials while skipping aisles filled with clothes and sporting goods.
“The results overnight indicate that the US consumer is now much more focused on the staples element of shopping where we’ve got double-digit food inflation coming through in some of these retailers,” said Nicola Morgan-Brownsell, fund manager at Legal & General Investment Management.
US consumer confidence fell for a third straight month in July amid persistent worries about higher inflation and rising interest rates.
Sales at luxury group LVMH Moet Hennessy Louis Vuitton SE climbed 19% in the second quarter, slightly lower than earlier this year. Handbag and high-end liquor sales in Europe and the United States helped offset slowdowns stemming…
