Due To Tighter Budgets, Consumers Avoid Candles And Barbecue Kits.

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Whether they make strawberry pound cake-scented candles or $300 brisket barbecue delivery meal kits, U.S. Companies are telling investors to expect consumers to cut back on discretionary spending with inflation settling into 40-year highs.

Stuck at home during the pandemic, consumers who liberally splurged on assorted goods and services may be cutting back. As a result U.S. companies to re-evaluate their quarterly revenue estimates and expansion plans.


Investors need only look at company statements indicating job layoffs, delays in plant expansions, and lower revenue predictions. Shopping mall soap, fragrance, and candle retailer Bath & Body Works Inc (BBWI.N) lowered its revenue estimate for the second quarter.
In another example of consumers cutting back on shopping, research firm D.A. Davidson lowered its price targets for Etsy Inc (ETSY.O) and Shopify Inc (SHOP.TO), citing “elevated inflation” and “a shift in near-term discretionary spending to travel and away from e-commerce.”

Even so, subscription analytics firm Antenna chief executive officer Jonathan Carson said his company is not seeing inflation having an impact on premium video subscription services.
Video streaming subscription service Netflix Inc (NFLX.O) said it lost 970,000 subscribers from April through June but predicted it would return to customer growth during the third quarter.


If anything, inflation is tilting people towards subscriptions,” said Tien Tzuo, chief executive officer at subscription software company Zuora(ZUO.N). “But there is something about separating winners from losers and the winners are the ones that become indispensable to their subscribers.”
-Reuters.

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