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The draw of bargains may be fading.
As three of the nation�s biggest retailers kick off a key sales week,
former Walmart U.S. CEO Bill Simon warns consumers are starting to
buckle for the first time in a decade.
He�s blaming a list of headwinds weighing on consumers including
inflation, higher interest rates, federal budget wrangling, polarized
politics and student loan repayments � and now new global tensions
connected to violence in Israel.
�That sort of pileup wears on the consumer and makes them wary,� the
former Walmart U.S. CEO told CNBC�s �Fast Money� on Monday. �For the
first time in a long time, there�s a reason for the consumer to pause.�
The timing comes as Amazon begins its two-day Prime Big Deal Days sale
on Tuesday. Walmart and Target are trying to compete with their own
sales events to get an early jump on the holiday- shopping season.
Simon observes the retailers have a glaring thing in common: The
bargains are not as deep.
�You�re not real proud of your price point�
�They usually say 50-inch TV [is] $199 or something like that. And now,
they say 50-inch TV [is] 40% off,� said Simon. �You use percentages when
you�re not real proud of your price point. I think you�ve got inflation
pushing the relative price points up.�
Shares of Amazon, Walmart and Target are under pressure over the past
two months. Target is performing the worst of the three � off 19%.
Simon, who sits on the Darden Restaurants and HanesBrands boards,
believes Walmart does have a big advantage over its competitors right
now.
�It�s solely because of the food business,� Simon said. �They�re going
to have both the eyeballs and the food traffic to probably have a better Christmas than maybe their competitors.�
https://www.cnbc.com/2023/10/09/consumers-buckling-for-first-time-in- decade-former-walmart-us-ceo.html
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