Buyers turn away from Lowe's and Costco, the data show - this is why
Consumer habits seem to change major this year.
This time of year offers many purchasing opportunities, whether you are go to Lowe's To buy supplies for a new outdoor garden project, or Stop by Costco To fill up on summer essentials. This year, however, these two retailers do not see the bump of sales they generally obtain in the spring, because the two report lower results in their recent financial reports. Read the rest to find out why buyers turn away from Lowe's and Costco, according to the latest data.
Read this then: Buyers turn away from Home Depot, data show - here's why .
Lowe's has a drop in sales.
In a May 23 Press release , Lowe's revealed that he had seen sales of $ 22.3 billion for the first quarter of the 2023 fiscal year. It is certainly not a change of chump, but compared to the profits of LOWE at the same time L 'Last year, this represents a 4.3% drop in comparable sales for the chain. AE0FCC31AE342FD3A1346EBB1F342FCB
For the first quarter of the 2022 fiscal year, the retailer brought a total of 23.7 billion dollars in sales —What was already a drop of 4% compared to the same period of the previous year. In 2021, Lowe's declared $ 24.4 billion in total sales for the first quarter.
Better life contacted Lowe on his recent financial report, and we will update this story with their answer.
Costco also deals with its own drop in sales.
Lowe's is not completely alone in its recent drop. Costco published the financial results For his last quarter on May 25. Unlike the domiciliary renovation retailer, the wholesale retailer in fact experienced a 0.3% increase in the total comparable sales for the third quarter of its 2023 fiscal year.
But by reducing Costco's results to its stores in the United States, the company has also had a decline. For the third quarter of fiscal 2023, comparable sales of Costco in the United States fell 0.1% compared to the company's profits for this same period last year.
Better life contacted Costco about his recent financial report, and we will update this story with their answer.
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The retailers say that buyers turn into certain regions.
According to Lowe's report, the deflation of wood and the unfavorable weather of spring both contributed to its recent drop in sales. But there was another unexpected factor which also played a major role in the decline: discretionary sales of lower DIY (DIY).
In a May 23 profit call With investors, the CEO of Lowe Marvin R. Ellison said the company specifically notes a decrease in buyers who buy more expensive and non -essential items for renovation projects.
"Cauller, what we see is the pressure on discretionary purchases of the big post, mainly. We see some pressure in a small post, but it is more pronounced in the big post and it is almost exclusively discretionary in DIY, "he said. "As you know, 75% of our company is penetrated into the DIY customer, and the first quarter is our most discretionary quarter of the year due to all seasonal purchases. So, when we meet, you know, the Non -seasonal time, it has a disproportionate impact on our business. "
For a May 25 profit call , Cfo costco Richard Galanti revealed that the same problem has an impact on its sales in the United States, while buyers turn away from "larger non-food discretion". Although the drop in costco sales is much lower, the wholesale retailer notes a drop in purchases for "home furnishings, small electronics, jewelry and equipment", according to Galanti.
And they buy instead in other areas.
While buyers keep their expenses away like furniture and electronics, they put their money to other types of purchases. As the The Wall Street newspaper recently reported, people in the United States Start More of their budgets on activities outside the house, while the pandemic is being successful - leading to success in sales of clothing brands like Urban Outfitters and Abercrombie & Fitch.
"They are back in the office. They celebrate with their friends," French , Said the CEO of Abercrombie & Fitch, during a recent call with analysts, according to the Wsj . "They go out and we are there and we serve them for all these occasions."
This specific change in buyers' habits is what helps Costco to maintain a little better sales figures than more retailers focused on home improvement like Lowe's.
"We put people in the door and we know what they buy. They buy non -discretionary items. They buy fresh food. They buy food and screens," said Galanti. "They buy clothes significantly. They buy patio furniture now that time has turned significantly; indoor furniture, not as much. We all know what's going on with consumer electronics."
