Retail & E.commerce_US consumers are not equal before inflationary pressures

RETAIL & E.COMMERCE

According to the National Retail Federation’s calculation of retail sales which excludes vehicles, gas stations and restaurants, May retail sales were flat compared to April but still up 6.7% YoY (unadjusted). Yet, this positive trend masks major swings across sectors, with sales of big-ticket items cooling off in reaction of rising interest rates and consumers starting to curb spending on discretionary categories. As inflation continues and these consumer behaviors will naturally also be visible in Europe, our rating hierarchy is based on: 1/ retailers’ capacity to mainly address middle- to high-income consumers who a more resilient to this adverse environment (e.g.: adidas, HelloFresh) and 2/ business models/categories that are less sensitive to inflationary pressure (e.g.: Inditex, Carrefour).