How Retailers Are Coping With Cautious Consumers

Summary

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WSJ What’s News – "How Retailers Are Coping With Cautious Consumers"

Date: February 12, 2026
Host: Luke Vargas (The Wall Street Journal)

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Main Theme

This episode examines how large retailers and consumer brands are navigating a complex economic landscape shaped by cautious, cost-sensitive consumers. Amid inflation and economic uncertainty, Americans are still spending—albeit more strategically—forcing brands to adapt with new pricing models, expanded private label offerings, and enhanced use of technology. The discussion draws on retailer earnings, industry insight, and expert commentary from Melissa Minkow (Global Director for Retail Strategy & Insights, CI&T) and others.

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Key Discussion Points & Insights

Macro Retail Environment: A Tale of Two Worlds

• Mixed Signals in Consumer Behavior (07:42–08:39):
  • Companies like Kraft Heinz, Coca-Cola, and Unilever are facing a "fragile consumer economy."
  • Despite higher prices and ongoing inflation, overall American spending is not dropping.
  • Consumers are increasingly frustrated with high prices and focused less on brands and more on function.
    • Notable Quote:
      “Consumers are increasingly switching to lower cost items. They are increasingly frustrated with high prices and higher inflation. And that is a big challenge for the consumer conglomerates...”
      — Miriam Gottfried, 08:05

The Enigma of U.S. Consumer Spending

• Contradictory Signals (09:02-09:45):
  • Consumers profess concern about prices and say they’re cutting back, but spending data tells a different story.
  • Increased savvy and use of technology (apps, price comparison, etc.) is leading to more strategic purchasing—not necessarily less spending.
  • U.S. consumers differ from those in other countries (e.g., UK), where higher prices more directly dampen spending.
    • Notable Quote:
      “You have consumers in our survey telling us that they are pulling back on spend ... but then you look at the spending data and they are still spending, so it's not really discouraging them. What it's doing is making them much more strategic shoppers.”
      — Melissa Minkow, 09:02

Technology, Dynamic Pricing, and the Rise of Private Label

• Brands Get Nimble (10:57–12:10):
  • The rise of private label (store brands) is notable, as consumers trade down from premium products.
  • Retailers use AI and tech for dynamic, real-time pricing to adjust to market conditions.
  • Walmart, for example, changes prices at an item level in close to real time, giving them a competitive advantage.
  • Consumers are experiencing price changes through shelf digital screens, personalized promotions, and app-based updates.
    • Notable Quote:
      “Walmart, for example, has talked about how they've been changing prices at an individual item level in closer to real time and that's really beneficial for them. ... The more retailers implement that type of fluctuating dynamism with their prices, the more they can react in real time to the market and to the consumer needs.”
      — Melissa Minkow, 10:57

Profit Protection vs. Cost Cutting

• Private Label & Margin Strategy (11:59–12:32):
  • Brands are looking to private labels not just for cost reduction but for profit protection.
  • Sometimes, maintaining or even raising price points makes business sense if the data shows consumers will tolerate it.
    • Notable Quote:
      “A lot of times we think about [profit protection] as lowering the prices for the consumer in the moment. But sometimes it's not that, sometimes it's maintaining the higher price point or even lifting prices a little bit when you know the consumer is willing to, to pay more.”
      — Melissa Minkow, 12:10

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Additional Noteworthy Segments

Broader News Context (00:31–07:11)

• Headlines included House rejection of Trump’s Canada tariffs, passage of strict voter ID legislation, international pressure and sanctions affecting Russian oil, and organizational changes at Elon Musk’s xAI after its merger with SpaceX.
• Highlights on company earnings: AB InBev’s growth in non-alcoholic beers, Hermes’ strong Christmas season, SoftBank’s AI investment gains.

Memorable Quotes

• On U.S. Retailers Coping With Change:
  “This consumer continues to be very aware of how expensive items are becoming, it's not necessarily meaning they'll pull all the way back. It's just meaning that as a retailer, you have to fight harder for them. You have to bring your A game.”
  — Melissa Minkow, 00:47

Noteworthy Moment

• Comparison with U.K. and Global Markets (10:02):
  • U.K. consumers decrease spending significantly during cost of living crises, while U.S. consumers maintain spend by shifting how they shop.

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Key Timestamps

• 00:47: Introduction to cautious consumer theme—Melissa Minkow
• 08:05: Consumers are switching to lower cost items—Miriam Gottfried
• 09:02: Strategic, tech-enabled consumer behavior in the U.S.—Melissa Minkow
• 10:02: Global comparison—U.K. vs. U.S. consumer response
• 10:57: Pricing via AI and dynamic models—Melissa Minkow
• 11:49: Examples of tech-driven promotions, fluctuating prices
• 12:10: Profit protection through private labels—Melissa Minkow

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Summary Takeaways

• American consumers are more cautious and strategic, but still spending amid economic unrest.
• Retailers adapt by leveraging technology: dynamic pricing, personalized offers, boosting private label offerings.
• The shift is less about reducing costs and more about protecting profit margins, sometimes even through selective price increases.
• The U.S. consumer’s resilience stands in contrast to stricter belt-tightening in other countries—a key dynamic influencing global retail strategies.

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Transcript

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[Luke Vargas]

The GOP led House rejects President Trump's Canada tariffs, but backs him up on his voter ID push Elon Musk announces a shakeup at Xaim as it merges with SpaceX and we'll look at how cautious consumers are reshaping retail.

[Melissa Minkow]

Even though this consumer continues to be very aware of how expensive items are becoming, it's not necessarily meaning they'll pull all the way back. It's just meaning that as a retailer, you have to fight harder for them. You have to bring your A game.

[Luke Vargas]

It'S Thursday, February 12th. I'm Luke Vargas for the Wall Street Journal, and here is the AM edition of what's News, the top headlines and business stories moving your world Today, six House Republicans have joined Democrats in rejecting President Trump's tariffs on Canada. Immediately after the vote, Trump said that Republicans who broke rank would suffer the consequences come election time, though at least one of them, Colorado's Jeff Heard, said he was comfortable with his here he was speaking to cnn.

[Jeff Heard]

I say this as somebody that supports the president's agenda of onshoring, reshoring, manufacturing. He's absolutely right. There's a lot that we need to be doing. There are a lot of trade imbalances and trade abuses that are happening, but we need to do it the right way, consistent with the Constitution. And I worry about the precedent that we might be setting if there's a Democratic president.

[Luke Vargas]

The move is largely symbolic. Even if the resolution clears the Senate, President Trump would almost certainly veto it. Nevertheless, Democrats are planning more anti tariff votes targeting US Levies on Brazil and other. Meanwhile, House Republicans were able to advance a key GOP priority yesterday, passing legislation that would significantly tighten federal voter registration requirements. The Save America act requires that voters show proof of citizenship and would establish a nationwide voter identification requirement for casting ballots. While Republicans have framed the bill as common sense legislation, Democrats warn it could impose barriers for eligible voters. Here's Journal reporter Anvi Bhutani.

[Anvi Bhutani]

Now that the legislation has passed the House, it will come to the Senate, where it faces an uphill battle Currently, with the rules around the filibuster, the Senate would require a 60 vote threshold to be met in order for the legislation to pass. Currently, Republicans have a 53 vote majority in the Senate, which means they need to convince seven Democrats to side with them. But it doesn't look like that support exists. Currently.

[Luke Vargas]

There are fresh signs that international pressure on Russia's oil industry is having an effect as dozens of tankers filled with Russian oil float at sea without buyers. Joining me with more is Journal finance editor Alex Frangos. Alex, what's going on here? Both with these ships kind of loitering around at sea, but also this real pricing squeeze. Russian oil being discounted heavily on global markets.

[Alex Frangos]

There's been a lot of pressure on Russia from European countries and the US in terms of new sanctions on individual boats in their so called shadow fleet that they've been using to move oil around the last few years. There's also been these seizures that the Trump administration has conducted against shadow fleet ships that mostly work in Venezuela, but are also tied to some Russian oil shipments. And then Trump struck this deal with India to lower tariffs there in exchange for India saying they would cut back on buying Russia. So all this has meant that there's all this Russian oil that gets produced, but they have fewer buyers and a lot of the oil is being stored on ships floating at sea, waiting for a buyer to say, well, if the price gets low enough, we'll buy it.

[Luke Vargas]

I mean, everyone wants lower prices, Alex, but they're already quite cheap. And I want you to zoom in on that for us. This really kind of amazing gap that's opening up between what Russian crude oil is fetching on world markets and where international Brent crude prices are.

[Alex Frangos]

Yeah. So normal oil that is sold from non sanctioned countries sells for something in the $60 to $65 a barrel range. Russia, in order to sell its oil, has to offer a discount that's as much as $27 per barrel. So they lose a lot of money compared to back when they were a legitimate member of the global economy.

[Luke Vargas]

I guess I'm just curious why this discount isn't making it more tempting then for countries to go in and buy this oil and get a great deal on it.

[Alex Frangos]

Yeah, it's a steep discount, but there are fewer buyers because India is saying they're not going to buy as much. And so then you're left with China. And there are certain buy who are willing to take it, but not everyone because the other dynamic here is there's a lot of oil in the world Right now the oil price in general isn't that high. So refiners, these so called teapot refineries in China, kind of independent, more nimble refiners who buy a lot of illicit oil from places like Russia and Iran and until recently Venezuela, they can afford to say we'll keep waiting till the price goes down more.

[Luke Vargas]

That was Journal Finance editor Alex Frangos. Alex, thanks as always.

[Alex Frangos]

Thank you.

[Luke Vargas]

Elon Musk Musk has announced a reorganization of his AI startup xai, just days after it merged with his rocket and satellite company SpaceX. The changes include parting ways with two of Xai's co founders and comes amid what tech reporter Georgia Wells says is a rapid expansion at the company.

[Telus Demos]

In the all hands meeting, Musk laid out a new structure for XAI that divides the company into four main one working on its Grok chatbot, another devoted to a coding specific AI model, another working on image generation and a pursuing.

[Anvi Bhutani]

A project called Macro Hard, which Musk.

[Telus Demos]

Described as intended to do digital emulation of entire companies.

[Luke Vargas]

Musk added that he plans to take SpaceX public by July and let's quickly spin through some earnings updates we're getting this morning. Zero Alcohol beers are helping to drive sales for Budweiser maker AB InBev. The world's largest brewer, is contending with a broad decline in drinking, especially amongst younger people, but recorded 34% growth in its teetotal portfolio last year, led by Corona. Zero. Hermes is signaling confidence about its 2026 sales growth after logging a strong Christmas shopping season, and Japan's SoftBank has posted a quarterly profit thanks to gains in its Visions Funds business. Its shares are up more than 9% so far this year, driven by hopes that stronger AI demand will boost its investments in companies like ARM holdings and OpenAI. Coming up, we'll unpack what this week's earnings from retail giants tell us about the state of the American consumer. That's after the.

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[Luke Vargas]

Let's turn to earnings this week from retail giants, which are revealing a tale of two worlds in which manufacturers like Kraft, Heinz, Coca Cola and Unilever face a fragile consumer economy. And yet all the while, American spending isn't dropping. Dow Jones reporter Ame Luk covers retail earnings for us and says years of rising prices have battered consumers pocketbooks and made them increasingly cost conscious.

[Miriam Gottfried]

Consumers are increasingly switching to lower cost items. They are increasingly frustrated with high prices and higher inflation. And that is a big challenge for the consumer conglomerates like Coca Cola or Kraft Heinz or Unilever because people are less focused on the type of brand and more focused on the function amid this challenging environment when it comes to looking at rising house prices, rising grocery prices and higher unemployment and that sort of thing as well is all straining consumers.

[Luke Vargas]

Well, joining me now with more is Melissa Minkow, the global director for retail strategy and insights at cint. Melissa, your job is to predict consumer behavior so that your firm can work to build suitable tech products to help out companies like some of the ones we've been talking about. Melissa? Ame, there was outlining a tricky environment for big retailers. I'm curious how you characterize it.

[Melissa Minkow]

Yeah, it's a really puzzling environment when it comes to consumers. You have low consumer sentiment or low consumer confidence. You have consumers in our survey telling us that they are pulling back on spend and that they feel prices over the next year are expected to go up and they're worried about it. But then you look at the spending data and they are still spending, so it's not really discouraging them. What it's doing is making them much more strategic shoppers. They're even more savvy than ever before now that they have the technology to them and help with all of the decisions they have to make. And in this hyper competitive market, rather than experiencing decision fatigue, they're just getting savvier and still spending.

[Luke Vargas]

I mean, this is kind of the enigma, especially of the US Economy, right? Like a pretty fragile macro outlook. A lot of anxiety we've covered here recently about jobs, for instance, the housing market's got plenty of issues around affordability and just availability. And yet the spending is continuing. Is that just a US Phenomenon right now?

[Melissa Minkow]

It actually is. And not even just now. Over the couple years, it's what I've observed. I'm in a global role. I'm based in London, but I monitor all of the markets. And what I've seen repeatedly is, especially in the UK Consumers are so impacted by the cost of living crisis that they actually do pull back their spend and they're a more conservative consumer overall. But in the US even though they repeatedly articulate that they are aware of the cost of Living crisis and just how difficult prices are becoming for them.

[Luke Vargas]

They're still spending, looking at earnings at least these companies aren't reporting major losses. You know, even as consumers, you say they're getting creative here. They're trading down, you know, looking for alternate brands though that has to have some impact on the bottom line. I mean, there's a reason many of these companies like people to buy their brand name products. Right. So I'm just curious what all this means for these consumer facing brands.

[Melissa Minkow]

Yeah, I mean it definitely is important to note that private label is growing, it's of increasing interest to consumers. But what retailers and brands able to do now thanks to AI and just advanced technology is be more dynamic with their pricing models. Walmart, for example, has talked about how they've been changing prices at an individual item level in closer to real time and that's really beneficial for them. And obviously they've been doing extremely well over the last couple years because of this economic environment and their ability to adjust. And the more retailers implement that type of fluctuating dynamism with their prices, the more they can react in real time to the market and to the consumer needs and offer them the best prices at that moment. Kind of meet the consumer where they're at.

[Luke Vargas]

And a shopper might see this, what scan code here on your phone to see what the actual price is, or a digital screen. Buy an item on a shelf or.

[Melissa Minkow]

Something like that, receiving personalized promotions, for example, if they download the app or seeing numbers change day by day depending on expiration dates or stock availability.

[Luke Vargas]

You mentioned private label. In terms of how the brands see this on their bottom, are they finding ways to increase their margins there? They've got to, right? If that's where the consumer's going, that's got to become a more efficient part of their business.

[Melissa Minkow]

Exactly. And so that's why I'm thinking about this in a lot of ways as profit protection and not necessarily always cost reduction because there's only so far you can slash your costs. So a lot of times we think about that as lowering the prices for the consumer in the moment. But sometimes it's not that, sometimes it's maintaining the higher price point or even lifting prices a little bit when you know the consumer is willing to, to pay more.

[Luke Vargas]

I've been speaking to Melissa Minkow, Global Director for Retail Strategy and insights at CI&T. Melissa, thank you so much for being with us on what's News.

[Melissa Minkow]

Thank you for having me.

[Luke Vargas]

And that's it for what's News for this Thursday morning. Today's show was produced by Hattie Moyer. Our supervising producer is Sandra Kilhoff. And I'm Luke Vargas for the Wall Street Journal. We'll be back tonight with a new show. Until then, thanks for listening.

[Telus Demos]

Hey, this is Telus Demos.

[Miriam Gottfried]

And I'm Miriam Gottfried. We're reporters at the Wall Street Journal and The hosts of WSJ's take on the Week. It's a weekly show that gives listeners a leg up in the world of markets and investing.

[Telus Demos]

From the Fed's moves to market bubbles, we dive into the biggest deals, key players, and business news ahead. If you're looking for more news and tools that you can use to help navigate the markets, consider becoming a subscriber to the Wall street journal.

[Miriam Gottfried]

Visit subscribe WSJ.com takeontheweek to subscribe now.