Inflation erodes disposable income, and demand for household goods in the United States plummets!

It is learned that according to foreign media Reuters, as food and grocery prices in the United States continue to soar, consumers are reducing their purchases of non-essential items such as toys, clothing and household goods, which is a huge challenge for retailers.

Food and grocery prices continue to rise as consumers cut back on discretionary spending

Facing the highest inflation rates on record, Americans are changing their shopping habits and searching for bargains, according to comments this week from executives at Walmart and other retailers.

Walmart's global chief executive, Doug McMillon, told analysts that Americans are still spending but are being more "selective and thoughtful" about what they buy.

Rising food prices contributed to weak sales of electronics, toys, home furnishings and apparel at Walmart in the latest quarter. McMillon said inflation in food and groceries, as well as fast-moving consumer goods, will remain high “for some time.”

The average cost of food consumed by households climbed 11.3% in January from a year earlier, according to the Labor Department. That’s nearly 5 percentage points higher than overall inflation, one of the largest gaps since the 1970s. Food costs have been rising faster than broader inflation for a year.

“Food inflation has been the most stubborn of all categories,” said John Furner, Walmart’s U.S. CEO.

Coresight Research predicts that annual grocery retail sales will grow by approximately $500 billion from 2022 to 2030.

Sales in categories other than food have fallen sharply, forcing retailers such as Target to slash prices on everything from toys to electronics.

US home furnishings market weakens

Investors say Walmart is better positioned to weather the challenge than other retailers because groceries make up a larger share of its sales, 56%, but they account for only about 20% of Target's sales, which rely more on home goods, apparel and beauty products.

Analysts expect Target's sales to grow 2.7% in the last fiscal year (Target reports financial results on February 28), far lower than the 6.7% growth reported by Walmart.

Sales of home furnishings and home improvement items, which include gardening products, will account for just 11% of total retail sales in 2022, down from 15% in 2017, according to Coresight.

Home Depot Chief Executive Edward Decker said shoppers spent less on items such as flooring and roofing in the latest quarter.

Additionally, sales at TJX's HomeGoods division fell 11% in 2022. "We're still trying to figure out what the national home trends are," CEO Ernie Herrman said Wednesday.

It’s worth noting that Lowe’s may feel more pressure than larger rival Home Depot because it tends to attract more do-it-yourself shoppers rather than inflation-resistant professional builders and contractors. Lowe’s reports fourth-quarter earnings on March 1.

Editor ✎ Nicole/

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