00:00We want to start off on the retail side, specifically because we've gotten a lot of these earnings already.
00:04And I mean, most of the retailers have kind of said the same thing, though we're seeing differences in their earnings results.
00:11And it's getting to this idea as to what is consumer demand looking like right now, particularly for discretionary items.
00:18And how well, if at all, do you think that could hold up as we get deeper into the year?
00:23Well, I think the conversation you were just having was a real clear description of what we're seeing and hearing from the retailers, which is that generally you're still seeing the consumer that's engaged, that's spending some more for certain brands and names and others, which is business as usual in terms of consumers choosing how they're prioritizing their purchasing power based off of what the demand is at the moment.
00:46But where I think it's really interesting is the guidance of what retailers are saying about what's to come.
00:52And that's where this uncertainty, I think, is playing a role.
00:55It's a really hard time to be forecasting because the headlines have been moving quickly.
01:00The good news is that things have settled down a bit in the last few weeks, and that's clearly evident in the markets as well, as you all were talking about as well, in the sense of markets ending up maybe in light volume but still up, which has been the theme of the last week and a half as some of the risk factors are now being priced out.
01:17And increasingly, we'll see how that plays out in the hard data as well.
01:21Well, that's what I'm curious about.
01:22If we are seeing a bit of a retrenchment, is it all based on sentiment?
01:26Because, I mean, I look at prices right now.
01:28They aren't materially higher than where they were, I don't know, four months ago.
01:33You know, it seems like the things you wanted to buy today or three months ago, you're pretty much going to pay similar amounts of money.
01:39So what's holding people back?
01:41Well, that's exactly right, Rami.
01:42I mean, in reality, not much has changed in terms of what would influence the quote-unquote hard data or actual consumer spending and behavior.
01:52It's more about sentiment and headlines and fear about the unknown and what's to come.
01:57So when you think about the CPI report that we just saw for the month of April, overall, CPI actually moderated.
02:03And a part of that was discretionary services pricing easing.
02:07But even on the good side, there wasn't clear evidence that tariffs was playing a role yet.
02:11And I think in terms of the supply of goods, consumers still at the moment can really still get the product that they demand.
02:20The distortions haven't yet shown up, it seems, in terms of what's actually there on the shelves, partly because a lot of companies were proactive.
02:27If you look at the import data for Q1, it was a significant increase in imports, a significant increase in inventories as well, as some companies tried to stockpile ahead of this period of uncertainty related to tariffs.
02:41Yeah, that's why it's so confusing, because you get the sentiment, you get the data, and then you get what companies say.
02:46And they all don't necessarily match up.
02:47Just look at Urban versus Ralph Lauren, right?
02:49Two totally different descriptions.
02:52What have you guys noticed, say, in terms of how consumers are spending, like, on travel, for instance?
02:56Sure.
02:58So when you look at overall spending based off of our own insights and data, we are seeing consumers spend at a fairly trend-like basis overall on aggregate.
03:07We haven't seen significant shifts that would be indicative of sentiment creating real measured differences in terms of spending.
03:16But I'm glad you brought up travel, because we just released our annual travel report from the Economics Institute, where we look at not only what bookings data are showing today around where consumers are going to choose to travel into the summer, which is about to kick off with Memorial Day weekend right in front of us, but also talks a lot about the why.
03:35Why consumers are choosing to travel, and what are going to be the drivers as we look ahead.
03:40So to us, as we think about an environment where there's more uncertainty, there's maybe more caution in terms of how consumers are making their decisions, they're going to be really mindful around where they choose to travel.
03:51So thinking about traveling for wellness has been a big theme that has really picked up speed.
03:57Traveling for adventure, a lot of foodies, sporting events, overall concerts, you're seeing a real wave in terms of cross-border spending for those activities.
04:06And is that all, like, with cash?
04:08Is it, well, no, because you're MasterCard.
04:10But, like, how much of that is going on, say, rolling credit debt?
04:14Well, look, I think there's many different forms of payment.
04:17When you tend to have a bigger ticket purchase, like a trip, oftentimes it's not necessarily an area where people are going to be able to use cash.
04:25So, yes, we're looking at the overall trends in terms of spending.
04:29All right.
04:30So, Larry, let's get to the fun stuff, Michelle.
04:31Where exactly are people going here?
04:33I mean, I've taken a couple trips already this year, and my family as well, overseas.
04:37Is there, like, a hot spot now that you're starting to see bubble up?
04:41Yes.
04:42When we look at bookings data, the list is – am I back?
04:47Yep, you're back.
04:48Go ahead.
04:48Okay.
04:49Top of the list is Tokyo.
04:51That's followed by Osaka in terms of the two top markets for travelers coming from throughout the world.
04:57When you look at U.S., where travelers are going, Tokyo still ranks as the number one.
05:01But you also have San Juan that's high up on the list, Maui that's up on the list.
05:06I personally, my family, I just visited Hawaii during last December break, and it was fabulous.
05:12So, you are seeing consumers that are going out and traveling for a variety of reasons, whether it's to see these cultural sites, to experience wellness.
05:21It could be where the currency really works very well, which is one of the factors that seem to be driving this increase in travelers to Japan in particular.
05:28Yeah, I mean, I feel like that's become a trend here.
05:31I also saw – you had listed in this report – Albania has apparently become popular, at least among certain European tourists.
05:39Yes, and that was a trend that we started to sniff out last year in our travel report.
05:43It was one of our key takeaways was Albania was going to be the new kind of big coastal retreat when visiting Europe because of the value play.
05:50And it looks like that has continued to build momentum.
05:54And part of that comes to this idea of travel twins, where people want to go out and travel.
05:58They want to have those experiences, but they're going to look for value in doing that.
06:02And they're going to look for the way that they can make their purchasing power work the best.
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