Stock Investors Tighten Belts: Consumer Spending Shifts Amid Post-Pandemic Reality

As post-pandemic spending patterns normalize, investors in consumer goods face a challenging landscape. Sectors from luxury to aviation are seeing reduced pricing power, contributing to a $4.8 trillion drop in global equities. Key brands, including Nestle, Ryanair, and McDonald's, exemplify the struggle to balance prices and consumer demand.

Investors in major consumer-goods firms are sharpening their stock-picking skills, as post-pandemic spending cools and frugal shoppers dent corporate pricing power.

Profit alerts in various sectors, including luxury, food, and airlines, have fueled worries over a potential economic slowdown in the United States and other large economies. This anxiety contributed to a staggering $4.8 trillion wipeout in global equities over just three days this month.

Stock pickers now must pinpoint businesses that can withstand the normalization of spending patterns, or worse, an economic recession. Chiara Robba, head of LDI equity at Generali Asset Management in Paris, stated, "Consumers have been able to absorb price increases due to exceptionally high savings accumulated during the pandemic. But it seems that this is now coming to an end."

(With inputs from agencies.)