STORY: Walmart and Target are set to offer hints this week about the retailers’ fate during the crucial U.S. holiday season.
Wall Street is hoping for a better year than last year’s chaotic year-end, when inflation peaked and shoppers’ wallets took a hit.
And recent data showing rising wages and falling food prices will encourage people to spend more.
The companies’ third-quarter results, due Wednesday and Thursday, could paint a clearer picture.
But investors told Reuters they were already concerned that Walmart and Target would be left with large amounts of unsold merchandise and forced to cut prices during the holiday season.
Rising credit card debt, depleting savings, and rising interest rates continue to plague consumers.
The National Retail Federation predicts that this year’s holiday sales will be the slowest in five years.
And both Target and Walmart are already offering holiday discounts in October ahead of Black Friday.
Walmart’s sales are expected to increase in the third quarter, according to LSEG data.
But Walmart’s decision not to hire seasonal holiday employees so far is a clear sign that the company expects large numbers of holiday shoppers, according to one investor who responded to Reuters. He added that it could mean that there is no such thing.
Target’s CEO said customers are pulling back, even when it comes to groceries.
Nearly half of the company’s sales come from clothing, housewares, toys and electronics, which are expected to decline, according to LSEG data.
Still, Target is hoping to lure holiday shoppers with new products, including collaborations with Ulta Beauty and Kendra Scott Jewelry.
Meanwhile, Walmart is betting on a $9 billion store renovation plan.