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RETAILERS have been left stunned over the strange behavior shown by customers as the busiest shopping season of the year draws closer.
Shoppers have remained stable despite the current state of the economy, according to Bank of America CEO Brian Moynihan.
However, some experts believe there will be a major pullback from consumers after the summer season.
Walmart has even become concerned with consumer behavior and what it will mean for the upcoming year.
John David Rainey, Walmart’s CFO, told the Morgan Stanley Global Consumer and Retail conference on Wednesday that shoppers behaved strangely in October to the point it made bosses “sit up in their chairs.”
Spending patterns in the last two weeks of the month were “puzzling” compared to previous months, said Rainey.
While customers are still spending a lot of money – this year’s Black Friday broke records with Americans spending $9.8billion on goods – people still stop when buying day-to-day items, said Doug McMillon, the CEO of Walmart.
McMillon spoke with CNBC to get more in-depth on shopping habits.
“Customers generally speaking are really sensitive right now,” he said.
“They’re prioritizing their orders, and they know there’s a chance that prices might be lower right before Christmas or right after Christmas with clearance, so that’s what we expect to happen.”
McMillon added that shoppers are price-sensitive the economy went through a period of inflation, which has now changed.
“We’re starting to see some deflation, which we’re happy to see—but as that price sensitivity went up, everybody was looking for value.”
Some food prices are coming down, according to data from the US Bureau of Labor Statistics.
Data from October showed that the prices of dairy products and nonalcoholic beverages went down while gas prices also dropped by 4.9%.
Amazon CEO Andy Jassy said his team noticed similar trends as Walmart did and felt confident that customers would still turn to them or the essentials.
“Consumers are still spending,” Jassy told CNBC earlier this week.
“They’re being careful about what they spend on, and they’re looking for bargains and deals wherever they can. Wherever they can trade down price they’re trying to do so.”
However, inflation is still higher than normal but Jassy said consumers are resilient, noting that it would take a huge spike to get them to stop buying the necessities.
“I think people are going to buy certain retail items,” he said. “A lot will have to go bad before people stop investing in detergent and shampoo and soap. If you look at our consumables business, the growth rate is pretty exceptional.”