Discretionary

The consumer is generally becoming more discerning. Inflation is taking more wallet share, specifically for food and essentials, and housing costs and interest rates are higher, too. That is putting pressure on spending for other, more-discretionary items. Higher costs are having a disproportionate impact on middle- and lower-income consumers. Walmart and Grocery Outlet Holding are benefiting, while discretionary [retailers] including Macy’s, Target, and Nordstrom are seeing a negative impact. Entry-level luxury is also under pressure, which is a newer phenomenon.