00:00 Speaker A
anytime you have higher gas prices, it’s going to affect both supply and demand because the consumer is going to be pinched in um their discretionary spend. You are going to see um sectors like apparel, toys, sporting goods may suffer. You’ll still see the essential goods continuing to be resilient. On the supply side, you are also going to see, it’s essentially it has the same effect as as a tariff where basically your input costs are higher and your ability to transport goods um from point A to point B, whether it’s overseas to a domestic location or even within a dome domestic location, that becomes more challenging.
00:35 Speaker B
Has the trade down effect already all happened or is there still a little bit of room for that if we see that pressure from gas prices?
00:41 Speaker A
You will see trade downs happening um at every level of the economy across different sectors. Um even when you’re looking at apparel, you will see people trading from um a medium- priced retailer to a low- priced retailer. We will always see private label goods as an example, generally pick up share at times like this, but it really is across the board. Cole’s has been challenged for a number of years. It has the misfortune of being in the department store sector and in particular being in the lower end department store sector. Their issue is that the consumer is more likely to go to stores like Walmart, even Target.