JACK: RISING RETAIL INVENTORIES
COULD MEAN DEEP DISCOUNT FOR
CONSUMERS.
IS NOW TIME TO PURCHASE THAT
BIG-TICKET ITEM OR GET A JUMP
ON HOLIDAY SHOPPING?
WHICH RETAIL STOCKS ARE GOOD B
BUYS RIGHT NOW?
JOINING ME IS DANA TELSEY,
ALWAYS GOOD TO TALK TO YOU,
REALLY GOOD TO TALK TO YOU LIVE
AND IN PERSON.
>> THE FIRST DAY OF YOUR NEW
STUDIO, CONGRATULATIONS.
JACK: WE WANTED YOU TO
INAUGURATE IT.
LET’S START WITH SUPPLY CHAINS.
I’M HEARING CONTRADICTIONS.
THE WALL STREET JOURNAL
REPORTED THE COST OF
TRANSPORTING GOODS FELL 4 X BUT
IT IS MORE EXPENSIVE THAN IT
USED TO BE.
WE ARE GETTING STUFF FROM CHINA
FASTER, IT IS 100 DAYS VERSUS
50 IN 2019.
WHAT ARE YOU SEEING IN THE
SUPPLY CHAIN?
>> DISRUPTION IS CONTINUING IN
THE SUPPLY CHAIN.
ORDERS ARE COMING IN THAT WERE
PLACED A MILE AGO.
A MISMATCH IN TERMS OF TIMING
OF WHAT THE GOODS ARE FOR WHEN
THEY ARE ARRIVING.
THE NEW GOODS, PLACE EARLIER
BUT WE ARE SEEING A REDUCTION
IN THE COST OF OCEAN FREIGHT
THAT IS COMING IN.
SOME COMPANIES USING AIRFREIGHT
BECAUSE THEY WANT THE GOODS TO
MAXIMIZE FULL PRICE SALES.
JACK: THAT IS REALLY EXPENSIVE.
YOU GO TO INVENTORIES AND
WALK-THROUGH TARGET ON THE ONE
HAND, THEY BOUGHT TOO MANY TVs
AND APPLIANCES, BUT ANOTHER
AISLE IS BEAR.
WHAT’S GOING ON?
>> INVENTORIES ARE HEATING UP.
I’M HEARING OF ORDER
CANCELLATIONS FROM WHOLESALE
CUSTOMERS AND SOME COMPANIES
ARE BEGINNING TO PACK AND HOLD
GOODS THAT HAVE ARRIVED
ALREADY.
IN THE APPAREL WORLD WE WILL
HAVE A PROMOTIONAL
BACK-TO-SCHOOL SEASON GIVEN THE
INCREASE IN THE AMOUNT OF
INVENTORY.
JACK: WHAT ARE WE SEEING IN
TERMS OF PRICE INCREASES OR
COULD THERE BE A DECREASE?
>> MOST PRICES GOING UP MID
SINGLE DIGITS TO DOUBLE DIGITS,
NOT JUST THE COST OF SUPPLY
CHAIN AND FREIGHT BUT RAW
MATERIALS LIKE COTTON AND WE
WILL SEE PRICE INCREASES
THROUGH THE BACK HALF OF THE
YEAR BUT IT MEANS A
BIFURCATION.
THE LOWER INCOME CONSUMER WHO
LACKED THE STIMULUS THEY
RECEIVE LAST YEAR’S PULLING
BACK ON SPENDING.
JACK: THE TREND ON WEALTHY
CONSUMERS IS THEY ARE KEEPING
UP WITH SPENDING SO THAT
SUGGESTS ANOTHER BIFURCATION IN
WHICH RETAILERS WILL BENEFIT
AND WHICH ONES GET HURT.
>> EXACTLY.
THE WEALTHY CONSUMERS EVERYONE
IS WATCHING CLOSELY, THEY ARE
CORRELATED TO THE STOCK MARKET,
THE VOLATILITY IN THE STOCK
MARKET, S&P, CONSUMER
DISCRETIONARY WAS DOWN 30% OF
THE RETAIL ETF DOWN BY 30% SO
THAT WILL BE WATCHED CLOSELY
BUT WHEN YOU THINK OF THE
STOCKS YOU ARE SEEING ESSENTIAL
STILL WORK, LOOK AT COSTCO AND
THE DEMAND FOR COSTCO, THE
VALUE THEY OFFER, KROGER ON THE
SUPERMARKET SIDE AND WE ARE
BACK IN PERSON.
ESTÉE LAUDER AND MAKEUP WE ARE
SEEING OUR RECOVERY.
JACK: PEOPLE ARE GETTING READY
TO GO TO A WEDDING.
>> THOSE NUMBERS ARE BIG,
2.6 MILLION WEDDING SUSPECTED
THIS YEAR COMPARED TO AN
AVERAGE OF 2.1 MILLION A YEAR.
AT THIS TIME, THE OCCASION IT
IS HERE, ANXIOUS TO SEE THE
PLANNING AS WE GO THROUGH THE
REMAINDER OF 2022.
JACK: COSTCO IS INTERESTING, IT
IS KNOWN FOR ATTRACTING WEALTHY
PEOPLE AND HAS A TAILWIND IF
EVERYBODY WANTS CHEAPER GAS.
ARE THERE OTHER COMPANIES LIKE
TJX THAT DOES WELL AT BOTH
LEGALS?
>> ONE THING WE ARE SEEING,
THEY WILL BE A BENEFICIARY OF
INVENTORIES COMING IN IN
DISLOCATED PLACES AND THEY ARE
WATCHING CLOSELY PLACING THEIR
ORDERS, MORE IS STILL TO COME
BUT THEY WILL BENEFIT FOR THEIR
CUSTOMERS WHO MAY BE WANT TO
BARGAIN MORE THAN NEED A
BARGAIN.
JACK: INTERESTING DYNAMIC WHEN
SOMEONE OVER ORDERS IN ONE
THING IT CAN SNEAK UP ON THE
SHELVES.
>> EXACTLY.
THAT WILL BENEFIT OUTLET STORES
ALSO AS LONG AS THERE ARE
ENOUGH PEOPLE REGARDING THE
GASOLINE PRICES.
JACK: A LITTLE BIT OF A
PULLBACK ON ONLINE SALES.
>> WE ARE SEEING A PICKUP IN
TRAFFIC.
EVERYONE WANTS TO ENGAGE IN
SOCIAL ENGAGEMENTS, SHOPPING IS
AN ACTIVITY AND WHETHER IT IS
FRIENDS GOING OUT TO PURCHASE
NEW DRESSES OR TO GET SOMETHING
TO DRINK SOMEWHERE.
ALL OF A SUDDEN THEY ARE GOING
INTO STORES AND BUYING THINGS
THEY HAVEN’T HAD IN THE PAST,
STYLES ARE UPDATED, SIZES HAVE
CHANGED FOR PEOPLE IN THE
INNOVATION OF PRODUCT IS THERE.
I’M SEEING THE TRAFFIC PICKUP
AND MODERATION IN ONLINE
SPENDING.
JACK: ONE MORE DETAIL LOOKS