A customer makes grocery shopping in a chicago supermarket.
Nam Y. Huh / AP
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Nam Y. Huh / AP
Companies that make our food and our essential home elements officially sound alarms on what awaits us for the American buyer.
“Compared to the place where we were three months ago, we are probably not feeling as well with the consumer now,” Pepsico’s financial director Jamie Caulfield said on Thursday.
The largest consumer conglomerates reduce their financial forecasts for the year, predicting the drop in sales and profits before. This includes Pepsi (which also owns Froto-Lay and Quaker Oats), Kimberly-Clark (which makes Kleenex, Huggies and Scott toilet paper) and Procter & Gamble (which does Tide, Pampers and Charmin).
This is the first wave of reports on business profits since President Trump imposed 145% tariffs on Chinese products and a 10% rate on all global imports this month. A 25% price on imported aluminum also affects companies that need a lot of cans or leaves.
Until recently, most consumption giants have remained in the word “uncertainty” to describe the future. Now they have started to offer more details.
Kimberly-Clark estimates that the trade war will add $ 300 million to new costs for the company. Procter & Gamble warned that it could increase prices to compensate for new expenses. Chipotle saw anxiety buyers reduces Burrito bowls.
“In February, we started to see that the high level of uncertainty felt by consumers began to have an impact on their spending habits,” the CEO of Chipotle, the CEO of Chipotle, investors said on Wednesday. “We could see this in our study of visits, where to save money due to concerns concerning the economy was the overwhelming reason why consumers reduce the frequency of restaurant visits.”
Many consumption giants count on China for packaging, materials and other parts of their supply chain. Those who manufacture products in the United States are now faced with reciprocal prices on American products imposed by the foreign government in retaliation.
“Uncertainty creates a pensive and anxious consumer,” said CEO of Colgate-Palmolive, Noel Wallace, during the income call on Friday. “And when you have uncertainty in terms of macroeconomics and all that surrounds, consumers tend to comfort themselves and they are very cautious about prospects.”
He underlined the travel industry, where Delta and American Airlines reported that people are tightening their travel budgets. And finally, Wallace said, the buyers reconsider all kinds of expenses.
“You will see the consumers exceed their pantry and not necessarily buy this additional tube or that this additional body are washing, because they obviously see a very volatile external environment,” said Wallace. Sales of Colgate-Palmolive fell 3.6% in North America between January and March.
He provided that daily needs expenses will be recovered during this year and in 2026, “at a rate that complies with consumer confidence levels”.
On Friday, a key survey of consumers of consumers of the University of Michigan, revealed a sharp decline in what people think of the future of the American economy. In April, the feeling fell 8% compared to March and 32% compared to January. In all political areas, more people said they expected their own personal finances to deteriorate and that inflation is increasing this year.
In March, inflation continued to facilitate the increase in consumer prices, an increase of 2.4% compared to a year ago and is actually slightly in February. The gas prices had decreased, as are plane tickets and used cars.
Retail sales are a key element in the American economy. And in the contribution of prices, March has in fact experienced a big leap in retail expenses – fired by people who buy cars and large ticket items before any price increased price. Economists have noted that a long extent of low unemployment and increased income have helped Americans do shopping.
