Deborah Weinswig, Coresight Research CEO, joins CNBC's 'Squawk on the Street' to discuss consumer sentiment, which retailers may be most insulated from tariff pressures and which face the most headwinds, and more.

Donald Trump has signed an order to impose tariffs imports into the U.S. from countries including China, Mexico and Canada.

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Retail sales have seen a monthly increase of 1.4 percent, a figure that has surpassed expectations in light of ongoing tariff concerns. This rise in sales could be attributed to consumer efforts to get ahead of potential price hikes. Deborah Weinswig, CEO of Coresight Research and a highly regarded retail analyst, provides insight into consumer behavior and retailer resilience amidst these challenges. 

Weinswig observes a reduction in consumer confidence regarding the overall economy, despite a slight improvement in their personal financial assessments. Her research indicates that department stores are experiencing a notable decline, contrasting with increased traffic to specialty retailers such as Abercrombie and American Eagle, as well as one-stop shops like Walmart and T.J. Maxx. This trend reflects a strategic move by consumers who are shopping at multiple locations to secure the most competitive prices on consumables.

Large retailers, including Walmart, are seen as better poised to manage tariff impacts due to their scale and ability to cut expenses in other areas. These companies can adapt their product offerings efficiently, providing leverage in price negotiations and maintaining competitive pricing. In contrast, smaller retailers may lack the same flexibility, highlighting a significant disparity within the industry. Additionally, Target faces specific challenges, including repercussions from cultural friction related to its pride merchandise and an internal focus on private labels and supply chain management, presenting headwinds for the retailer.



Consumers shopping at more locations to find best deals

Welcome back. Retail sales rose 1.4 percent last month. Better than expected. But many Wall Street economists fearing that tariff concerns could have distorted the numbers. Joining us now core site research CEO Deborah Weinswig. Deborah was ranked institutional investors number one retail analyst for nine years. Thank you for being here Deborah. So there's a lot that's been made about the potential distortions the pull forward of consumer behavior to get ahead of the tariffs and potential price increases there. What are you seeing. You know it's really interesting. We've definitely seen a lot of volatility we do a weekly survey of about 4000 consumers. We've seen a lot of volatility in the past month but it's been really interesting in the past week how consumers feel about their own situation has improved about two and a half percent. But how they feel about the economy overall continues to decline. Interesting. As you kind of study the landscape which type of retailer or specific retailer do you think will be more insulated from the tariff pressure. And which ones do you see facing the biggest headwinds. Our data suggests we compared everything you know since basically the end of 24 to you know really to Monday. And the department stores seem to be the ones that have seen the greatest pullback. We're still seeing traffic to the malls at kind of record levels. But a lot of those specialty retailers you know Abercrombie American Eagle area where we're notable in terms of their traffic gains or consumer intentions. So that's kind of the picture of the mall. And then once we move off mall you know we continue to see strength in a Wal-Mart a T.J. Maxx anywhere where consumers can do one stop shopping. But let me take that one step further. We are seeing when it comes to consumables that consumers are shopping many more locations to try and find the best deal. Is that because the bigger companies Walmart and the like they have been able to use their scale as leverage essentially in their supply chain negotiations and be able to you know obviously low prices are paramount for them. And so they've been more out in front of this. Whereas smaller retailers haven't had that benefit. That that is really the critical question right now. So number one I think that they they planned ahead. Number two I think that they're also able to let's just say cut expenses in other areas so that they're able to absorb this better. But thirdly because they have such a broad mix of product right. They can also lean into more of something pretty quickly and be much more agile than some of these smaller and other retailers. So it is a great question and really the question of the day. Deborah we were talking earlier this morning about the spread between Costco shares and Target shares over a one year period. There's been all these reports about this 40 day boycott of Target. Obviously a lot of culture friction regarding their their pride merchandise. I just wonder what do you think the best path or off ramp for those guys is at the moment. And so specific to to Target versus a Costco or Walmart their private label has been growing at a greater rate. And what we are starting to see is those retailers who have a lot of private label who once again are maybe not as agile are really starting to rethink that. And so I think with Target supply chain et cetera they may be a bit more distracted than some of the others as well who have a greater mix of consumables and who also let's just say are a bit more disciplined in terms of their skew or their items that they have both online and offline. So Target may just be facing challenges kind of across the board. One being their their supply chain prowess. Yeah. Headwinds all over the place there. Deborah thank you very much.

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