Fast food is reporting the same thing, McDonald's put out a report a few days ago, Yum! Brands is yet to report results for the quarter but similar results are expected. Target had a similar report to Walmart.
It is mostly discretionary spending that is down; Wal-Mart reported the largest fall in apparel iirc, but demand is demand. One would expect discretionary spending to fall first, and hopefully it stops there.
Again I apologize for not providing a direct citation due to my dumb mobile browser but these are days-old news stories and it should be easy to confirm
I know I've cut back on fast food because both product and service quality have declined dramatically, likely due to staffing shortages. Long wait times, cold food, and incorrect orders have pushed me to the point of staying away. It's a weird time, and it's hard to untangle all these additional factors. That said, I'm sure higher prices are having an impact as well.
Fast food is pricing itself out of the market. I think it's a great example of a sector that failed to innovate and is now incapable of providing a product worth buying at prices that are profitable.
McDonalds et al. probably should've been investing a lot more in automating their kitchens. The fact that a huge percent of locations -- and all drive-thrus -- still use humans for the ordering process is, similarly, inexcusable.
Unless the US massively increases its low-skilled immigration quotes, robotics firms will be the FAANG equivalents of the 2020s-2030s.
You can fit 3 generations in a single family home in an American suburb of a mid-sized city, and half the world's population would either (a) consider that a QoL improvement or at least (b) put up with it for a while to remit back home.
For all the doom and gloom in the USA, it's still an incredibly rich country.
To be clear: I'm not making a moral statement here. This is a statement of fact, not a statement of ethical preference.
Not across the board. Demand for consumer discretionary spending outside of the home is up. People are tired of sitting at home. They don’t want to buy a TV and binge Netflix. They did that for 2 years. They’re going out to eat, going on vacation. Trying to get on a flight.
But demand for services and "experiences" is way up.
I think it's unrealistic to expect retail goods to maintain the same highs they had during the pandemic. For a big chunk of the last two years, people couldn't go to concerts, bars and restaurants operated at limited capacity, vacation destinations had travel restrictions in place, etc. This lead people to take the discretionary income they would normally spend on those things and put it into retail goods that improve their lives stuck at home. TVs, game consoles, what have you. Now that restrictions are essentially nonexistent in the US, people are returning to those pre-COVID activities.
The evidence does not suggest that demand for services and experiences is up. Demand for durable goods spiked when COVID checks went out, then returned to parity with demand for services and non-durable goods.
According to the fed, both of those have dropped over the last two years.
I think Walmart's story in particular is one of stupidly bad demand forecasting.