There’s always fine print, though: many plans are only for those who buy the phone through the carrier (if you bring your own iPhone you’re out of luck) and have to be enrolled within the first month or two. Most major phone carriers offer extended warranties and insurance that can greatly reduce the price of a screen repair or battery replacement, or other accidental damage. Also remember that policies with lower monthly costs often see excesses rise up to more than £100, which may not be worth it if the value of your iPhone is on the lower end. Make sure to check the full terms and conditions. It is all too easy to imagine Mr McMillon’s discerning shoppers turning into dispirited ones.Insuring older handsets can be problematic some insurers may require that you have bought the handset new in the past so many months (likely 6 or 18). Even well-heeled consumers, who disproportionately drove retailers’ sales growth in 2022, are feeling the heat, as Walmart’s success with them shows. Last week Kraft Heinz, a food conglomerate, said it was mostly done raising prices this year. Firms that, like Home Depot and Walmart, were quick to flaunt their pricing power last year are now more careful about further price rises, lest this put shoppers off shopping. According to Goldman Sachs, another bank, households have spent a third of their excess savings and will have spent another third by the end of 2023. The tailwind from strong household balance-sheets, fortified by pandemic-induced saving and government handouts, will not blow for ever. Home Depot said that it would spend an extra $1bn on higher hourly wages for workers.Ī bigger worry is the potential drop-off in consumer demand. uBS, a bank, estimates that such moves will cost the company around $1bn a year. In January Walmart announced pay increases which will raise its average hourly wage to more than $17.50. In the case of Walmart and Home Depot, they are rising. Although the worst labour shortages have subsided, wages remain high. Shoppers’ baskets may get lighter still as jitters hit the housing market: according to Barclays, a bank, the more the asking price for properties fall, the less consumers spend on an average trip to Home Depot.įollowing a pandemic-era blow-out, investors expect retailers’ margins to narrow. The company’s share price fell by more than 7% on the news. Home Depot, which also reported its results on February 21st, disclosed its seventh successive year-on-year decline in transaction volumes-and this quarter, for the first time, it was not offset by growth in the average size of transactions. Other retailers tell a similar story, more poignantly. Most troubling, Walmart forecast sales growth of 2.5-3% for the current fiscal year, below analysts’ expectations. That was despite heavy discounting of wares in order to clear inventories overstocked as a result of post-pandemic miscalculation about shoppers’ appetite for things like garden furniture. Its higher-margin discretionary offering, which includes toys, clothes and homeware, did less well. A big reason for Walmart’s market-share gains in groceries was cash-strapped consumers, including high-income families, trading down from fancier supermarkets. Look closer, though, and the earnings are full of warning signs. The company’s comparable sales in America grew by a faster-than-expected 8.3%, compared with a year earlier. On the surface, Walmart’s fourth-quarter results look like exhibit A for the optimists.
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