Look at Wednesday morning’s earnings news to get a true reading of where retail and consumers are at this moment.
Nike, Olive Garden, Shake Shack and Cheesecake Factory are all selling off in pre-market for losing the ability to control pricing.
Nike, while beating earnings projections, but the top-line revenue was below expectations and the stock is selling off more than 3% pre-market. It appears high-end sneaker sales are not happening now, according to the company’s forecast for next quarter.
Olive Garden reported that it tried to raise the cost of its popular dish by a buck and sales suffered.
“We made major changes to our strongest traffic driver, which is soup, salad and bread sticks at $5.99, and we moved that to $6.99, which drove less traffic, however was significantly more profitable,” said Chief Executive Eugene Lee on the earnings call.
A similar scenario played out with Shake Shack and Cheesecake Factory as the casual dining is losing pricing control and suffered on reduced revenue.
This is how tight the consumer’s purse string are. A dollar rise on soup, salad and bread sticks cannot be tolerated by strapped customers.