Americans love to spend — and that might be the biggest factor fending off a US recession.
European and Latin American shoppers are shifting to discount retailers while changes in US consumer behavior are comparatively modest, Kellogg Co. Chief Executive Officer Steve Cahillane said, according to Bloomberg.
“Everybody’s favorite parlor game is, is there gonna be a recession, when’s it going to happen?” Cahillane said in an interview. “The one thing that is most standing in the way of that is, the US consumer is stubbornly resilient.”
Shoppers in the world’s largest economy are focusing more on absolute dollar amounts, he added, so Kellogg is offering different sizes and price points to meet different household budgets. The plan appears to be working: In North America, Kellogg’s sales rose 13% year-over-year for the first quarter, beating analysts estimates.
Price hikes were a key part of the sales performance. Kellogg’s mix of North America prices is about 16% higher than last year, Cahillane said. He declined to say whether there would be further hikes, adding that while the rate of inflation has stopped worsening, it’s still elevated. “We have not seen deflation,” he said.
By Deena Shanker / Bloomberg