Top Retail CEOs See Lingering Consumer Unease

holiday retail sales mall

The CEOs of Nordstrom and Walmart both spoke this week of continuing concern over inflation affecting shoppers heading into the back half of the 2022 holiday season, as credit cards are maxed out and kitchen table budget meetings weigh using funds for gifts vs. essentials, causing retail jitters.

At the Morgan Stanley Consumer & Retail Conference, Nordstrom CEO Erik Nordstrom said the holiday sales environment remains challenging, with the retailer seeing “signs of strain across all customer cohorts,” sending the stock down, according to Seeking Alpha.

Nordstrom said he remains hopeful for the back half of the season, with an extra weekend shopping day ahead of Christmas and Hanukkah falling later in the calendar. In November, traffic at indoor malls, Nordstrom’s primary space, was down 6.4% from 2021, according to data from

Walmart CEO Doug McMillon told CNBC on Monday that the U.S. consumer is “still stressed,” as shoppers at the retail giant continue to face higher prices.

“We’ve got some customers who are more budget-conscious that have been under inflation pressure for months,” McMillon said in an interview. “That sustained pressure in some categories, I think, is something that customers are having to deal with as we approach Christmas.”

However beyond more economically challenged consumers, McMillon said, other shoppers “have money to spend” this season. The company did see a stronger-than-expected Q3 and held to its Q4 outlook, unlike others that pulled back, and the CEO said they’re getting a handle on overstocks.

In another hopeful sign, McMillon said he’s seeing inflation easing in some key categories just in time. “In toys, sporting goods, apparel, categories like that, prices have come down more aggressively,” he said. “We’re still inflated but we’re not inflated nearly as much as we are in the other categories.”

Last week, Bank of America analysts said they expected heavy discounting and inventory clearance that was rampant over the Cyber Weekend to deepen as the season progressed, putting more pressure on retail margins.

Aware of this dynamic, the bank’s analysts said, many consumers are holding fire until late in the season to take advantage of the best holidays sales and promotions.

A new Jungle Scout survey of more than 1,000 U.S. consumers on holiday spending and behavior found they plan to dole out nearly 40% less this year, compared to the 10-year national average. Two-thirds of respondents said they planned to spend less than $500 on gift-giving, and a third said they were reducing gifting and decorating budgets.