Best Buy CEO oversees consumer behavior amid economic crisis | So Good News
Best Buy CEO Corie Barry weighed in Tuesday on how she thinks consumers are doing amid the current economic crisis, calling their response “unsettled and inconsistent.”
|Ticker||Security||Finally||Change it||Change %|
|BBY||Best Buy Co. INC.||79.86||+ 9.02||+ 12.73%|
At the time of the company’s third quarter earnings, Mr. Barry said that “in terms of the major commodities,” consumers “are making bargains, especially because of rising prices for essentials such as food, fuel and shelter.”
He added that inflation “hits low-income consumers the most because most of their spending is on these devices.”
In October, inflation as measured by the consumer price index rose 0.4% month-on-month and 7.7% year-on-year.
THE PROSPERITY OF GOODS WILL BE BUT IN OUR ECONOMY IN OCTOBER AS THE COLORS WILL BE USED.
The Labor Department’s CPI data released Nov. 10 showed that food prices have increased by 12.4% since last year, while accommodation and gasoline prices have increased by 6.9% and 17.5% during the same period, FOX Business previously reported.
“For all consumers, we can also see that income is decreasing and credit utilization is increasing, and value is important to everyone,” said the Best Buy CEO, adding that Best Buy saw “more interest in products that take a special value” in the third quarter.
“As a result, there is no single way to describe all customers, and we have repeatedly mentioned the effects of the current macro environment on consumers as inconsistent and unstable.”
Meanwhile, Best Buy saw “unchanged behavior” from its customers in the third quarter, according to Barry, who added that “the demographic mix is stable compared to last year and before the pandemic.” Although some “groups of [Best Buy] customers” have been trading “in other specific groups,” “it doesn’t add up to the whole problem,” he said.
As part of the retailer’s efforts to meet the needs of consumers amid the economic crisis, Best Buy has offered “a number of financing options to make it work,” including credit cards, loan programs and buy now, pay later plans, Barry told analysts and investors.
BUY NOW, PAY ANYTHING: DOES IT WORK?
Buy now, pay later has become a popular shopping trend, FOX Business reported. In a recent Deloitte survey released just in time for Thanksgiving to Cyber Monday, more than half of consumers (57%) indicated that they are relying on payment methods such as credit cards or buy now, pay later to keep their holiday budget going.
DELOITTE: MANY CUSTOMER SUPPORT INSTRUCTIONS ARE NOT THE SAME OR FROM SEPTEMBER.
In the earnings call, Barry also said Best Buy thinks the economic uncertainty will “continue to be inconsistent” as they “head into next year.
“The symptoms are very different,” he said. “The labor market remains strong, consumer spending continues and inflation appears to be slowing slightly, but savings are beginning to decline. Consumer confidence is low.
“The housing market is freezing and inflation remains a concern for essentials such as food, fuel and shelter, which have a significant impact on sustainability.”
For the third quarter, Best Buy reported $10.59 billion in revenue and $1.38 in adjusted earnings per share, both of which came in above analysts’ expectations.