American consumers are sticking to basic purchases, and retailers’ profits are suffering. The Wall Street Journal reports that new sales figures from Target, Home Depot and other merchants show shoppers pulling back on discretionary items like electronics and home projects and instead focusing on home essentials.
Target’s same-store sales, including stores and digital channels, came in flat in the past quarter as consumers grew more cautious and took up more detergent and fewer toys. Sales at Home Depot fell last quarter and the home-improvement retailer says its annual sales may decline for the first time since 2009.
The turn toward household staples is already cascading across distribution channels, with signs that imports of big-ticket items like appliances are softening.
Target got some relief in its supply chain, however, from lower freight costs, and it benefited from higher product prices and fewer digital sales, which tend to have lower margins.
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