U.S. consumers are becoming more cautious about their spending, Amazon and Starbucks executives said Tuesday.
“Customers in the U.S. are very conscious about their spending. They’re looking for deals, they’re trading down, and they’re looking for lower ASP (average selling price) products,” Amazon CFO Brian Olsavsky said. to reporters before the company’s earnings conference call. .
Customers are buying “a lot more consumables and everyday essentials,” which tend to be less expensive, Olsavsky said.
Starbucks CEO Laxman Narasimhan made a similar observation during his company’s earnings conference call.
“We continue to feel the impact of a more cautious consumer, particularly with our more casual customer base, and the deteriorating economic outlook has weighed on customer traffic and impacted sales across the industry.” , Narasimhan said.
The CEO said Starbucks’ performance this quarter “did not meet our expectations.” Sales fell 3% in the United States year-over-year.
Olsavsky and Narasimhan’s remarks underscore the challenges facing American consumers — and the companies that sell to them — as shoppers try to save money amid persistent inflation.
“After being a strong point in 2023, it appears that growth in spending by low- and middle-income households has slowed,” Bank of America economists wrote in a report released March 11.
In July, McDonald’s Chief Financial Officer Ian Borden told investors that customers were trying to save money by “trading up” to value menu items and “buying a little less.”
“A challenging macroeconomic environment, including rising interest rates and high costs, continues to create volatile confidence levels among consumers and put pressure on their spending,” Borden said then.
Representatives for Amazon and Starbucks did not immediately respond to BI’s requests for comment sent outside of normal business hours.
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