Cramer: Consumers are frugal and turning away from companies without value pricing
CNBC’s Jim Cramer spoke about consumer behavior on Tuesday, saying many are fed up with high prices for products and services from certain companies, such as airlines or retail.
“Consumers are finally saying no. They are fighting back against high prices and demanding bargains,” he said. “With this rebellion, inflation has finally been ripped out of the system, and I bet it will continue to play out behind the scenes as long as the Fed takes its time cutting rates to ensure that prices return to more reasonable levels.”
Cramer believes the bull market for travel and leisure may be over. Many airlines have reported disappointing quarters recently. Cruise companies, on the other hand, seem to be doing well, he says. Some boast cheaper room rates compared to hotels. Cramer suspects that consumers may not be “flocking to cruises so much as fleeing the higher hotel prices.”
He also pointed out that off-price retailers are doing well, citing Elf Beauty’s wildly successful quarter. Cramer noted that luxury brand LVMH, which owns companies like Louis Vuitton, Bvlgari and Fendi, reported lower-than-expected sales for the second quarter in a row. He also highlighted the success of companies like Amazon, Costco and Walmart, calling the latter two “frontrunners in price cutting.”
“The consumer is finally doing something,” Cramer said. “He is not just being frugal. He is striking against those who have not yet lowered prices. And he does not want revenge, but revenge against everyone who has kept prices high.”
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