Good morning. Phil Wahba writing from New York this morning. As consumer and retail CEOs see the holiday season inching closer, they’re trying to figure out whether U.S. customers will keep up their healthy pace of shopping—even in the face of all political and economic tumult—or finally pull back. There’s one thing chief executives agree on: the U.S. consumer is anxious and their spending can’t be taken for granted.
“What we’ve seen in this economy is a customer across all cohorts of income levels being somewhat distressed, especially in sustained inflation,” Dollar General CEO Todd Vasos told a Goldman Sachs retail conference last week.
And yet the U.S. consumer continues to spend—for now, and likely through the end of the year. Consulting firm AlixPartners’ 2026 holiday forecast predicts holiday season sales will rise 4% to 7% even as 57% of Americans say they are worse off than a year ago, and many say they should spend less this year. That contradiction comes down to a combination of relatively low unemployment, negative headlines, and retailers doling out deals: shoppers know they should tighten their budgets given current events, but they still have money to spend and are instead focusing on squeezing more out of each dollar.
Vasos sees that trend in the habits of Dollar General shoppers. He says households making $100,000 or more are trading down to Dollar General from competitors like Walmart. Meanwhile, customers making $45,000 a year or less—those particularly exposed to high gas prices—are making more store visits but buying less on each one, stocking up on what they need when they have the cash for it.
Macy’s CEO Tony Spring said he’s contending with wary consumers by moving forward with the department store’s plan to invest more in stores, place more employees on the floor, fine-tune its merchandise assortment, and improve its supply chain. Those upgrades have increased Macy’s operational flexibility; its nimbler supply chain, for instance, makes it easier to cycle out items that aren’t selling. Dollar General has responded to the uptick in bargain hunters by ramping up its selection of $1 items.
“There is no straight line unless you can tell me there won’t be an inflation increase,” said Spring. “There’s way too much uncertainty, so we are focused on serving the customers.”
Indeed, the CEOs at the Goldman conference seemed resigned to operating in an environment where agility is required, but that doesn’t mean they’re not yearning for some stability.
The biggest question weighing on CEOs’ minds is how to manage “everything going on, with diesel prices, oil, a war, interest rates, the Fed,” said Boot Barn CEO John Hazen. “Pick your topic.”
Contact CEO Daily via Diane Brady at diane.brady@fortune.com
Top leadership news
Meta’s Muse AI takes off—and draws backlash
Meta’s Muse app became the top free app in Apple’s App Store with strong early consumer interest in the assistant that can complete tasks across connected accounts. But Amazon has blocked the AI agent from accessing its site, an early sign of the barriers autonomous agents may face as they act on users’ behalf.
A16z backs a high-priced college alternative
Andreessen Horowitz is backing a new unaccredited academy for students wanting a more direct path into technology than a traditional four-year college degree. Its first cohort at the Horowitz Andreessen Academy will attend for free, but the program ultimately plans to charge Harvard-level tuition without offering degrees or access to federal student aid.
Fortune Change the World 2026
Fortune’s latest Change the World list spotlights 50 companies that are making social or environmental impact part of their core business strategy. One honoree, Fortescue, is investing $6.2 billion to rid fossil fuels of its Australian iron ore operations by 2030, including through battery-powered trucks and new solar, wind, and battery capacity.
The markets
S&P 500 futures are up 0.04% this morning. The last session closed flat. The STOXX Europe 600 was down 0.03% in early trading. The U.K.’s FTSE 100 was up 0.19% in early trading. Japan’s markets are closed today. South Korea’s KOSPI was up 0.90%. China’s CSI 300 was down 0.60%. Hong Kong’s Hang Seng was down 1.01%. India’s NIFTY 50 was up 0.55%. Bitcoin is at $86k.
Around the watercooler
Mortgage rates are nearing 7%, delivering another blow to a housing market already losing buyers and facing stalled sales by Mia Osmonbekov
After 40 investors rejected Jeff Bezos’ Amazon pitch, his parents offered $245,573 of their retirement savings by Marco Quiroz-Gutierrez
Commentary: The backwards AI pacing debate and how far business is from the frontier by Jeffrey Sonnenfeld, David Siegel, and Stephen Henriques
If AI is going to destroy humanity, Scott Bessent says hyperscalers, not government, must take the fall: ‘We cannot absolve you of responsibility’ by Eleanor Pringle
Walmart’s new pricing patents spark fears of surveillance: ‘Are they going to charge you a different price if they know who you are?’ by Tatiana Sataua
CEO Daily is curated and edited by Joseph Abrams, Jason Ma, Claire Zillman, and Lee Clifford.
#Retail #CEOs #holiday #paradox #shoppers #anxious #spend