Goldman Says Retailers Focused on Consumer Spending, Tariffs

Katrina Compoli
·1-min read

(Bloomberg) -- As retail executives convene at Goldman Sachs Group Inc.’s 31st Annual Global Retailing Conference this week, confronting discerning shoppers and potential tariffs is top of mind for companies, according to analyst Kate McShane.

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There are questions around what tariff policies will look like after the US presidential election in November, and retailers will likely have to assess their pricing as a result, McShane said Wednesday in an interview with Bloomberg Surveillance.

Consumers continue to be “somewhat steady,” but they are spending selectively after years of inflation, McShane added.

“Their money doesn’t go quite as far. So you are seeing choices between consumables and discretionary. You’re seeing choices between services and goods,” she said. “That’s what’s differentiating maybe some of the different performances that you’re seeing out of retail coming out of the second quarter.”

The S&P Retail Select Industry Index has gained roughly 3% this year, trailing the broader market’s 16% advance.

McShane anticipates retailers at the conference will discuss their expectations for consumer behavior in 2025, five years after lockdowns during the Covid-19 pandemic altered shoppers’ spending habits.

She also said there is an element of the biggest retailers consolidating their market share, as those retailers benefit from scale and consumers favor one-stop shopping. Walmart Inc. delivered a stronger-than-expected earnings report in August, powering the stock’s best month since November 2014.

Regarding artificial intelligence, McShane said “there isn’t anything of scale yet that we’ve seen that is revolutionizing what’s happening with margins in retail.”

--With assistance from Lisa Abramowicz and Jonathan Ferro.

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