Consumers proved to be resilient despite shortened holiday season: 5 New Digital's Michael Zakkour

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michael 's accord did i say that correctly michael thank you five new digital founder and author of the new retail all right can we talk about this calendar thing did it matter at all this

Michael Zakkour (Founder) 00:10.750

year in your opinion did matter it was it jumped out at me immediately in the summer you know what i'm planning my holiday rituals and what i'm doing for my own shopping and working with my clients and said oh my god we're only going to have i think it was twenty seven days

Michael Zakkour (Founder) 00:24.870

between thanksgiving

Michael Zakkour (Founder) 00:27.030

and and christmas so it was short but consumers proved to be incredibly resilient even in a shortened season you know people and ask you hey how'd it go who's the winners who's the losers you know the value retailers have done very well walmart dollar stores and i i think that's

Michael Zakkour (Founder) 00:45.830

because people had less money to spend and they want to spend it in fewer places and they had a shorter amount of time to do it

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what were the things that jumped to the front of the pack here in terms of what people were buying and and how they were dealing with this idea of of limited budgets yeah

Michael Zakkour (Founder) 01:01.070

electronics were the clear winner so we think gaming consoles new phones new laptops and that created a mini boom for the retailers and the brands and the technology companies who are inserting their stuff into those devices so if you see chat GBT downloads are through the roof

Michael Zakkour (Founder) 01:22.000

because i got a new phone own so i think electronics also apparel casual apparel a lot of pajamas a lot of cargo pants and a lot of graphic tees cargo

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pants it's almost like we've got we're now this is pandemic two point oh where everybody's like living in the comfort i'm not supposed

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to say this but but there was a lot of talk about victoria's secret doing really well didn't they have a report out last week you say that well you know it's sort of not mine

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yeah i didn't

Michael Zakkour (Founder) 01:50.280

i didn't see how they didn't see that OK

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no but you know

Michael Zakkour (Founder) 01:53.000

if we look at the the retail stocks who are doing well right now it's reflective of the season so yeah dollar stores are up walmart 's up the T G X stores are up it's all that discounted

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i had a couple guests on worldwide exchange this morning who were talking about this idea that the K shaped economy continues in twenty twenty six that the affluent customers are still confident in the economy and spending like the economy is booming and budget minded people are

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not what are you seeing

Michael Zakkour (Founder) 02:26.230

so our research internally showed that over the course of twenty twenty five about eighty percent of consumer spending was spent by the top twenty percent of earners so that is a reality it's the way the season 's gone and again i think that's why you know the the discount

Michael Zakkour (Founder) 02:42.430

retailers did really well is twenty twenty

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six going to be then a year for luxury retailers

Michael Zakkour (Founder) 02:48.630

it could be a year for a comeback for luxury retailers luxury had a little bit of a rough twenty twenty five again because of inflation globally you know i think a lot of aspirational luxury buyers have dropped out of the market you know it's harder to justify i saved up for a

Michael Zakkour (Founder) 03:05.310

thirty five hundred dollar purse that this season is sixty five hundred dollars and you didn't improve the value you didn't tell me i'm getting something more than i did last year so on the luxury end we're seeing the ultra high high luxury companies or mez the big stuff they're

Michael Zakkour (Founder) 03:19.670

doing really well but the aspirational bottom is pretty much like what

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like what tiffany LVMH that kind of level they're at the

Michael Zakkour (Founder) 03:25.710

highest level even within those companies it's it's the highest price products right the ultra so the the five hundred thousand dollar watch the quarter million dollar pair of earrings those are moving really well that you know lowish to mid level luxury it's really hurting

Michael Zakkour (Founder) 03:41.710

right now so it should be

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a comeback i'm not sure that we get the best read on the K shaped economy through christmas my theory is that people they do as much as they possibly can to extend themselves and to buy things for their levels it's after the the christmas season that we might see this become

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more into into focus to the idea that there are these two really different things going on right now in terms of stagnant incomes and some concerns about jobs and then the affluent who are reaping the the gains i think of of a stock market that's doing very well so give us your

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outlook for twenty twenty six at this point

Michael Zakkour (Founder) 04:16.990

yeah i mean listen going to be a little bit of a holiday hangover right like you put there people are going to wake up in the morning and say oh my god look at my credit card bill and my buy now pay later bills overall though i think twenty twenty six we're going to see a fairly

Michael Zakkour (Founder) 04:30.630

strong retail economy consumers are continuing to spend they're obviously shifting to essentials and shifting away from you know the things that they don't need they're really focusing on home right what are we going to get for clothes food the reality is going to be that

Michael Zakkour (Founder) 04:47.910

inflation is still going to be up when we wake up tomorrow morning and budgets are still going to be constrained and that's why i'm still putting my debts putting my bets on the the budget and dollar retailers when

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i look at the macro situation where the consumer i see a sort of bifurcation here on the on the one hand employment is relatively low the balance sheets are in good shape on the other hand and and and by the way in addition to that you have these refunds coming through next year

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that could be very helpful and then sort of counting that as a lousy sentiment numbers which ones went out yeah