CEOs across retail, restaurants, and packaged goods have stepped out of their ivory towers to affirmatively declare that consumers are “running out of money” and cutting back on discretionary spending, as gas prices hit $4.56/gal on average, the highest levels since July 2022.
- Kraft Heinz CEO Steve Cahillane said consumers are “literally running out of money at the end of the month,” with negative cash flows in lower-income brackets where shoppers are dipping into savings.
- Whirlpool CEO Marc Bitzer said “the war in Iran amplified consumer concerns about the cost of living” and described a 15% hit to industry demand as similar to the global financial crisis.
- McDonald's CEO Chris Kempczinski took a break from consuming his product to say that confidence among shoppers is worsening, citing “heightened anxiety” and gas prices that disproportionately impact low-income households.
- Dine Brands CEO John Peyton blamed lower visits at Applebee's and IHOP on “price-sensitive, more value-oriented guests” who “seem to be staying home a bit more.”
- Planet Fitness CEO Colleen Keating forgot to wipe down her machine before saying, “the consumer and economic backdrop have shifted,” noting that the gym paused the national rollout of a price increase to its top-tier membership.
- Comerica Bank chief economist Bill Adams noted that “in the near term, Americans can draw down savings or tap credit cards, but the longer gas prices stay high, the more consumers will change their spending patterns to balance their budgets.”
Bloomberg reports that the average American's savings rate dropped in March to the lowest in three years, and that low-income consumers have already cut back on gasoline consumption and discretionary spending. So if your sales drop a little this summer over last year, that might be one reason why. Americans have officially run out of stimulus money.
