Best Buy CEO weighs in on consumer behavior amid current economic conditions

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Best Buy CEO Cori Barrie weighed in Tuesday on how she thinks consumers are behaving amid current economic conditions, calling their response “volatile and uneven.”

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During the company’s third-quarter earnings call, Barry said at the “highest macro level” in retail, “consumers” are closing businesses, especially with significant inflationary impacts on fundamentals such as food, fuel and housing. ”

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He noted that inflation “adversely affects low-income consumers because a large portion of their spending is on those basics.”

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In October, inflation as measured by the Consumer Price Index rose 0.4% month-on-month and 7.7% year-on-year.

Inflation grip on US economy remains tight in October as prices remain persistently high

Labor Department CPI data released on Nov. 10 showed food prices increased 12.4% from last year, while shelter costs and gasoline prices climbed 6.9% and 17.5%, respectively, over the same period, according to Fox. Business had told earlier.

“Among consumers, we can also see savings going down and credit utilization going up, and value clearly matters to everyone,” the Best Buy CEO added, adding that Best Buy is “extraordinarily saw more interest in value-on-sale events” in the third quarter.

“As a result, there is no single way to describe all customers, and we have repeatedly referred to the effects of the current macro environment on consumers as uneven and volatile.”

Meanwhile, Best Buy saw “relatively consistent behavior” from its customers in the third quarter, according to Barry, who has kept the consumer electronics retailer’s “demographic mix basically stable over last year and pre-pandemic.” while some “groups of [Best Buy] Customers are trading “within certain categories,” it’s not “aggregating into an overall effect,” she said.

As part of the retailer’s efforts to meet consumer needs amid current economic conditions, Best Buy has introduced co-branded credit cards, lease-to-own programs and buy now, pay later plans to “improve affordability.” Several financing options” are offered. Barry told analysts and investors.

Buy Now, Pay Later: Are There Any Screws?

Buy now, pay later is gaining popularity as a method of covering loan purchases, Fox Business previously reported. A recently released Deloitte survey during the Thanksgiving to Cyber ​​Monday time frame found that more than half of shoppers (57%) indicated they rely on payment options such as credit cards or buy now, pay later so that May their holiday budget go ahead.

Deloitte: Most shoppers’ holiday spending plans have remained the same or increased since September

During the earnings call, Barry also said that Best Buy thinks uncertain economic conditions “will continue to be an uneven backdrop” as they move “through the holiday and into next year.”

best buy store

“The indicators remain unusually diverse,” she said. “The job market remains strong, consumer spending is up and inflation appears to be moderating, but savings are starting to erode. Consumer confidence is low.”

“The housing market is cooling and inflation remains a particular concern, with fundamentals such as food, fuel and housing having a deep and continuing impact.”

For the third quarter, Best Buy reported $10.59 billion in revenue and $1.38 in adjusted earnings per share, both of which were above analysts’ expectations.

Best Buy CEO weighs in on consumer behavior amid current economic conditions

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