Visa CEO says retail sector remains healthy thanks to big spenders: ‘We’re just not seeing these negative impacts’


Visa Inc. maintained on Tuesday that it is seeing healthy spending trends, driven by the accumulated demand for out-of-home activities and rising activity among wealthy cardholders.

CEO Al Kelly told investors at a JP Morgan conference on Tuesday that his company has yet to experience success in broader spending activity due to geopolitical events, such as the invasion of Ukraine by of Russia, or macroeconomic circumstances, which means high food and energy inflation and the Federal Reserve. post-COVID-19 hardening.

“We’re just not seeing these negative impacts on our numbers,” he said, according to a transcript from FactSet.

“Right now the consumer looks pretty healthy, despite inflation, supply chain problems, the war in Ukraine, rising interest rates, etc., where he would be thought to see some impact. We’re not seeing that. ‘.


– Visa CEO Al Kelly

Kelly argued that there is no historical precedent for the current environment, given “so much accumulated demand” for out-of-home activities among people who were tired of being locked up for more than two years in the midst of the pandemic.

At the “lower ends of the spending strata”, Visa V,
-2.48%
It is still seeing consistent trends in relation to before the pandemic, according to Kelly. At the same time, the company is experiencing a good recovery in spending among the wealthiest.

“What really fell during the pandemic was the higher levels of spending strata and we’re really seeing in the last nine months or 10 months that the affluent customer is back in the market a lot,” Kelly said.

He gave the example of restaurant spending, noting that while $ 25 bills have been largely stable in recent quarters, $ 100 to $ 300 bills or more than $ 300 show the greater growth.

“This is clear proof that the affluent customer is coming back, going to white tablecloth restaurants and buying a good bottle of wine with the meal, etc.,” he continued.

Kelly was also optimistic about travel trends, saying consumers seem eager to leave home, especially as restrictions ease.

“We do not expect any impact on travel, except Russia and Ukraine,” he said. “We do not expect any overflow to the negative trends of travel outside these countries.”

Kelly’s optimistic comments about the state of consumer spending come after several retailers unsettled investors in recent days as they discussed the impacts of inflation on their businesses.

Walmart Inc. WMT,
+ 1.07%
shared last week that shoppers are increasingly opting for private label products due to inflation, while ROST of Ross Stores Inc.,
-1.08%
The CEO said that “the escalation of inflationary pressures has had a greater impact on lower-income households”.

Visa shares have a 3% discount on trading on Tuesday. Shares have lost 7% over the past three months as the Dow Jones Industrial Average DJIA
-0.53%
has dropped 5%.



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