All eyes are on Target and Walmart as they prepare to release quarterly earnings this week. Third-quarter results from the two retailers could be an indicator on how holiday spending, particularly on Black Friday, will go, reports Reuters.
Walmart will hold its earnings call on Wednesday, with Target following on Thursday.
According to Reuters, which used data from the London Stock Exchange Group (LSEG), Walmart is projected to report a 4.4% increase in third-quarter sales, while Target is looking at a 4.8% decline.
Even though the rate of food inflation has flattened recently, the National Retail Federation is predicting holiday sales in the U.S. will be the slowest in five years. An increase in credit card debt combined with a decline in pandemic-era savings are both contributing to the sluggish forecast.
Food inflation was down in the month of September, but the index for food at home increased slightly at 0.1% as three of the six major grocery store food group indexes increased over the month.
Additionally, a report from data and analysis company PYMNTS in September showed that one in five shoppers are now paying for groceries in installments citing “the ability to manage their spending and credit” as key reasons for paying this way.
Reuters is also reporting that Walmart did not choose to hire more workers to handle the holiday season, another telltale sign of soft sales over the next couple of months.