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Short Summary
Main recommendation: According to Goldman Sachs' Lizzie Dove, the recent pullback in hotel stocks looks like a buying opportunity, since data does not show consumers prioritizing travel less despite higher gas and food prices. The panel at the Goldman Sachs Global Consumer and Retail Conference argued that shoppers are still spending, and that a softer July retail sales figure reflected travel and back-to-school timing rather than a new trend. The video also highlights a "paradox" in Michaels' business: consumers want less screen time but find inspiration online and shop in stores.
Key Points
- Retail executives at the conference expect the consumer to stay resilient despite higher gas and food prices, and see no current sign shoppers will stop spending.
- July retail sales fell, the first decline in over a year, despite analysts expecting a rise; Goldman-linked commentary attributed this to heavy July travel and other spending, not a new trend.
- Goldman Sachs research described the U.S. travel environment as "incredibly strong across all cylinders," with international travel recovering somewhat before U.S. travel, and expected strength to continue into the holiday season.
- Hotel pricing saw one of its strongest runs on record for U.S. travel, helped by the World Cup, but that driver is not expected to continue.
- Michaels' CEO is bullish on the holiday season, citing an average item price of about $10 and a shift toward offline hobbies, with date-night crafts up 240%, junk journaling up 300%, and in-home hobbies up 40%.
Details Worth Noting
- Concrete instructions: - No step-by-step consumer or investment instructions were given; Lizzie Dove said the data suggests the hotel stock pullback is a buying opportunity, since spending data does not show people prioritizing travel less.
- Michaels began hiring seasonal workers the weekend before the interview, with plans for around 10,000 positions, based on last year's numbers, signaling it expects shoppers in the holiday market.
- The CEO said 70% of consumers under 30 are looking to reduce screen time, which he described as the paradox: they seek inspiration online but then shop in stores.
- Michaels' same-store sales were still up 0.6% year over year, and the speaker argued basket size and units per basket matter more than average price when assessing revenue, especially after a tariff reprieve.
- The speaker's core test for the economy is whether unit volume per basket holds steady; if it does, the speaker said there is no economic problem even if revenue dips.
Bottom Line
The conference's message is cautiously optimistic: consumer spending appears durable, with travel and craft-driven store traffic cited as evidence, though the case rests largely on executives' and analysts' own readings of the data.
