{"id":10250,"date":"2026-05-28T19:01:36","date_gmt":"2026-05-28T19:01:36","guid":{"rendered":"https:\/\/siliconvalleymovingpost.com\/?p=10250"},"modified":"2026-05-28T19:01:36","modified_gmt":"2026-05-28T19:01:36","slug":"pressured-shoppers-keep-stretching-budgets-aiding-retailers","status":"publish","type":"post","link":"https:\/\/siliconvalleymovingpost.com\/?p=10250","title":{"rendered":"Pressured shoppers keep stretching budgets, aiding retailers"},"content":{"rendered":"
\n

By Lily Meier and Redd Brown<\/strong> | Bloomberg<\/p>\n

Shares of retailers spanning Kohl\u2019s to Best Buy and Dollar Tree rose amid optimism that shoppers are still spending when they see what they want at the right price.<\/p>\n

Read more FACT FOCUS: Trump says Obama and Biden spent \u2018hundreds of millions\u2019 on reflecting pool. They did not<\/a><\/p>\n

The three chains operate in very different parts of the retail sector, but all surprised investors to the upside in a sign of strength by US consumers who are facing multiple hurdles.<\/p>\n

Gas prices have surged since the start of the war in Iran, workers are worried about the impact of artificial intelligence and there\u2019s still elevated inflation. All that has weakened consumer confidence.<\/p>\n

And yet, Americans are still opening their wallets. US data released Thursday showed that consumer spending edged up in April despite accelerated price increases.<\/p>\n

At Kohl\u2019s, stronger-than-expected sales boosted the department-store chain\u2019s turnaround. Electronics seller Best Buy said revenue across major categories gained and this month was off to a strong start. Dollar Tree highlighted that customers spent more per transaction.<\/p>\n

\u201cAcross all income levels, customers are value focused and definitely prioritizing affordability,\u201d Dollar Tree Chief Executive Officer Mike Creedon said on the earnings call.<\/p>\n

Shares of all three retailers jumped on Thursday. Dollar Tree and Best Buy soared 18% at 12:15 p.m. in New York, followed by a 17% advance for Kohl\u2019s.<\/p>\n

\n<\/div>\n

Despite these results, retailers and consumer brands have been saying throughout this earnings season that there is plenty to worry about.<\/p>\n

Last week, big-box retailers including Target and Walmart signaled that shoppers remain resilient despite years of elevated inflation. But higher prices on essentials like groceries and gas have squeezed shoppers\u2019 discretionary budgets, pushing them to trade down to cheaper brands and cut back on less essential purchases.<\/p>\n

Earlier this month, Kraft Heinz Chief Executive Officer Steve Cahillane said lower-income Americans were \u201cliterally running out of money at the end of the month\u201d because of higher costs, especially gasoline.<\/p>\n

At Dollar Tree, its lower-income customers are visiting less because of their pressured finances, wrote Neil Saunders, managing director of GlobalData, in a note to clients. The retailer boosted comparable-store sales last quarter 3.5%, but that growth came from a gain in shoppers spending more on each transaction as traffic fell 1%.<\/p>\n

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\n<\/div>\n

\u201cThe trips they\u2019ve cut out are those of a more discretionary nature which, on some level, is pleasing because they\u2019re still using Dollar Tree for essentials,\u201d Saunders said.<\/p>\n

Those pressures were increasingly evident in Thursday\u2019s government data as well. With rising prices eroding Americans\u2019 incomes, consumers are saving less to keep spending. The savings rate dropped in April to the lowest level in nearly four years.<\/p>\n

\u201cIt is downright remarkable that consumer spending increased,\u201d Stephen Stanley, chief US economist at Santander US Capital Markets, said in a note. \u201cIf energy prices continue to ascend and consumers continue to fund the higher expenses out of income that would otherwise be saved without adjusting their spending patterns, they will eventually run into trouble.\u201d<\/p>\n

Some chains have kept prices low amid their own rising costs to maintain market share. But it\u2019s not clear how long they can maintaining that strategy. Walmart warned last week that if fuel prices stay at current levels, prices across the board could rise throughout the year.<\/p>\n

Wealthier shoppers have been the driving force behind the US consumer economy for some time. But even they are feeling pressure and increasingly trading down to cheaper options.<\/p>\n

Dollar Tree and other low-priced chains have been courting higher-income shoppers, often with great success. That\u2019s a good outcome for these retailers, but raises doubts about the sustainability of these spending levels.<\/p>\n

US consumer confidence edged down this month amid anxiety over the economy, according to the Conference Board. Two-thirds of shoppers reported cutting back on spending due to rising prices, with many respondents saying they are delaying expensive purchases and buying cheaper versions of the same item.<\/p>\n

\u201cRight now our customer is sitting around their kitchen table trying to make life work,\u201d Kohl\u2019s CEO Michael Bender said Thursday on the earnings call. \u201cIt\u2019s the combination of how do I pay for gas, food, light bill, all the things that are necessities. And with what\u2019s left over, which retailer is the one that\u2019s going to help me stretch my dollars as far as I possibly can?\u201d<\/p>\n

Rainier Harris, Reade Pickert and Matt Turner at Bloomberg contributed to this report.<\/em><\/p>\n

Read more Treasury Department confirms it has taken limited steps toward a $250 bill featuring Donald Trump<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Data released Thursday showed that consumer spending edged up in April despite accelerated price increases.<\/p>\n","protected":false},"author":1,"featured_media":10249,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[43,2],"tags":[],"class_list":["post-10250","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-based-on-facts-either-observed-and-verified-directly-by-the-reporter-or-reported-and-verified-from-knowledgeable-sources","category-news"],"yoast_head":"\nPressured shoppers keep stretching budgets, aiding retailers - Silicon Valley Moving Post<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/siliconvalleymovingpost.com\/?p=10250\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Pressured shoppers keep stretching budgets, aiding retailers - 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