This is One Thing, I'm David Rind, and holiday shopping in this economy?

I think I've just kind of have it set in my mind that this is how it is. Maybe it'll get better one day, but for now, this is how it is.

Stick with us.

My name is Tori Lycap. I live in Pueblo, Colorado. I am married. We have two children.

Tori Lightcap recently spoke to my colleagues here at CNN for a big story about how 10 American parents are feeding their families on a budget in the face of rising prices.

So I think last year I was budgeting about $600 a month. And then when I did my initial interview, I believe it was in September, I was only budgeted about $1,000 a month, and even since then it's. Right now, we're sitting at about $1,200 to $1 300 a month.

My colleagues actually, for a grocery stress rating, you gave it an eight out of 10. Yeah. That's pretty high. Yeah. Like, why do you feel it's so high? Like, what are the emotions that go into that?

For me, it's mostly just because in the past year, our budget has doubled and that's a significant change considering we haven't had, like we didn't have a new baby, we don't have extra people living with us, like, we didn t have any huge major life changes.

Like everything else in your life is pretty much the same but you go to the store and everything is more

Yeah, I have the same amount of family, we eat the same type of foods, but it doubled. Like, that's a significant...

'Change. Tori says she's seeing higher prices at the grocery store in just about everything, from meat to the dairy-free items she needs because of food allergies. She's had to pull back on other parts of her family's budget, like entertainment. And with Thanksgiving coming later this week, the holiday shopping season is fully here, yet another expense. As a result, Tori does not see the pricing problem ending anytime soon.

I think a few months ago I was a little more optimistic. Like, hey, you know, it's bad right now, maybe it'll get a little bit better. But then again, my budget increased $200 to $300 a month. I'm like, oh, well, maybe not. So I think I've just kind of had it set in my mind that this is how it is. Maybe it'll better one day, but for now, this is it is, so I just have to make sure that I'm paying attention to that and being realistic about it. I just, I know that I am not the only one nuts. Feeling this change and this drastic increase in prices that we've noticed over the past few years, our local food banks are constantly asking for more donations than they ever have. I mean, I'm very blessed in the fact that I haven't had to utilize those services. You know, we can still budget for them, but it's unfortunate for the people that aren't able to change their budgeting around these things and they just can't afford it.

Nobody has done what we've done in terms of pricing. We took over a mess.

This has been a growing problem for President Donald Trump and his administration. He ran on the promise of lower prices. But as we saw in resounding election wins for Democrats earlier this month, the majority of Americans do not believe he's following through on that promise, despite what Trump says.

'You know, the new word is affordability. Another word is just groceries. It's sort of an old-fashioned word, but it's very accurate. And they're coming down, they're coming down right now.

From tariffs to inflation to rising health care costs, Americans insist they are feeling the pinch.

Does anybody else not know what to do for Thanksgiving this year?

We have a whole generation of people, starting with my generation, which are millennials and younger, who are realizing, oh, I can't really afford to live where I want to live.

It's getting crazy out here, man. I hope we get along.

But what does the data actually say? And what will this holiday shopping season look like for you and your budget?

I just want to point out that affordability is nothing new, it's not a new concept, but it has largely impacted lower income Americans. Now they are feeling extra pressure and we're hearing about affordability more because we're starting to see that middle income and higher income earners are also being affected by higher prices and economic pressures.

This is Vanessa Yurkevich. She's CNN's business and politics correspondent.

We actually got three new pieces of old data.

Delayed by the government shutdown.

Delayed by the government shutdown. So this is two of those pieces of data are from September. So first are producer prices. This is what producers pay for goods. Up 0.3% in September. That's not astronomical, but it does show it's heating up. That is an indication that maybe they could start to pass some of those increases in prices down to consumers. A lot of analysts I've spoken to say that that might actually happen. Next year, not this year. Retailers have been really good about absorbing a lot of the costs so they don't impact consumers that much. We also got retail sales, again, for September, which showed that consumers were still spending up 0.2% in September, but it was really sort of a softening compared to the more aggressive spending we saw over the summer. So the question is. Is this the beginning of a slowdown heading into the holidays? We know that prices really haven't run away from us in the last year, but they're up close to 25% on average since the start of 2021. And I think that's why people feel so bad because remember prices are never gonna go down. They're never gonna backwards, but it's how fast are they rising?

Yeah, that's what I wanted to say because it is this feeling that people kind of take with them when they go out and shop and, you know, a poll published by Fox News showed 76% of Americans have a negative view of the economy, up from 67% in July. And you know you look at how President Trump has kind of handled this, he continues to downplay the concerns, but Even in a CBS YouGov poll, 60% of Americans say Trump describes the economy as better than it actually is, including four in 10 Republicans. So you do have this feeling that people just see what they see and they don't like.

And that actually brings me to the third piece of data that we got, which is consumer confidence, which actually tumbled in November to its lowest level since April, after kind of moving sideways over the summer. And in these consumer confidence surveys, it gives people an opportunity to actually write in how they're feeling. They talked about issues affecting the economy, like prices, inflation, tariffs, trade, even politics and some mention of the federal government shutdown. I think a lot of people expected that when Trump got into office, he really would try to lower prices. But again, you really can't lower prices, you can just stop them from rising so quickly. We saw with consumer prices, that big inflation report that we always look at, inflation is now back up to 3%. We haven't seen that since January. And inflation was trending lower and lower towards 2%, which is where we kind of like to see it? People are continuing to feel uncomfortable because they feel like we're moving in the wrong direction. It's not runaway inflation, not by any stretch, but it just feels like we are not quite moving in the right direction.

So in light of all that, all that data, as we approach, or really are here in holiday shopping season, are consumers spending less?

'Wouldn't we love to know? We don't quite know yet, because, again, we don't have a lot of really fresh data. But for example, Wells Fargo estimates that holiday sales will be up about 3 and 1 half to 4%, but that doesn't adjust for inflation, so higher prices. So actually, spending could be flat. And what a lot retailers have been seeing is that there's a bit of a pullback with their lower income consumers. However... Middle income, higher income shoppers are now shopping at low cost retailers. And because we really don't know how the consumer's going to show up this holiday season, I wanted to try to get into the mind of some retailers to see how they're preparing for this uncertainty. So we went inside of Macy's, a legacy retailer, Walmart, who is competing for speed right now, and Old Navy, a low-cost retailer that's trying something new this year.

So what did you find at these places? Let's start with Macy's.

'Yeah, Macy's, believe it or not, is one of the only department stores left standing, been around since the 1850s. They've really stood the test of time. But in recent years, customers sort of felt like the in-store experience was not great, right? It was messy, lost its luster. But in the last year or two, Macey's has really put a lot of money into their in-story experience.

Are you a Minnie or Mickey fan?

Oh, I think I'm Mickey, but now my daughter is very into Minnie. So these here work for both. .

These work for these work for both, yeah.

So talking about bringing in exclusive partnerships with Disney, sending Santa on tour for the first time ever, Santa on Tour for the first time, ever to stores across the country.

Yes, he's at the North Pole, but he'll come here right after the parade, then he goes to Houston, and he'll be in Chicago, so really, really...

And building out really special experiences like Christmas markets, partnering with the NBA. I played some basketball with the chief merchandising officer at a Macy's store in Herald Square. What's your score? Seventeen.

I was the captain of my basketball team, not very good. I went old school and did underhand. That's one way to get it in, but you got it in. But yeah, I'm like out of breath.

'So they are banking on people and shoppers really falling in love with that in-store shopping experience again, and they're hoping that that pays off.

What about Old Navy? I always associate them with, you know, generally very affordable, pretty basic stuff that's comfortable and nice to wear.

'And that's still what it is. I mean, you can go into Old Navy and buy three t-shirts in three different colors for low cost.

Cost. I've done it.

I know you have and I'm sure a lot of other men have too, but it's easy and it's low cost. So what's interesting about what Old Navy is doing is they brought in one of America's most premier couture fashion designers, Zach Posen.

So Zach and Old Navy, did you see it coming?

Never. Never.

He's now the chief creative officer and he oversees design, merchandising, and really sort of the creative outlook of the brand. And what he has done is brought in newness this year because they know in order to retain and attract new customers, they have to offer something new. So they've launched Old Navy Beauty Co., beauty for the first time, occasion wear, they've beefed up their accessories. Walk me through a couple of things here, like what is someone finding now that they maybe wouldn't have found before at Old Navy?

An amazing satin slip dress.

Never before seen it i don't think that

I don't think so, with lace like that, really cool, you know, I call it pajama glamor.

They also have something called RFID technology and it's essentially scanners in the ceiling that can figure out where misplaced items in the store are. So if you come in and you want to size medium flannel pajamas and you're going to the rack and you don't find it, you ask a sales associate and they say, one minute, and they go on their iPad and that iPad connects to the ceiling of the store and then points them to exactly where that merchandise is. So they don't lose.

Not where it should be, where it actually is.

Right, and we know stores can get messy from time to time, but basically it saves the company money because they don't lose you as a customer, but it also saves you time. Because imagine if you went there seeing that it was available in store and then it wasn't where it was, would you return to Old Navy? Maybe not.

'We got to take a quick break, but when we come back, how Walmart is trying to beat Amazon at its own game. Stick around. So you've got some fashion collaborations, the RFID tags, in-store experiences. In the case of Macy's, I gotta be honest, this all feels a little desperate to me. Like I've always wondered why stores bother with this stuff when online shopping is just a huge behemoth. It's right in our social media feeds. Like you don't even have to go to a website to do it. So are any retailers actually waging this battle and coming out on top?

'So one of the most well-known brands in the country is Walmart. There are Walmarts sort of everywhere within reach, and that's by design. What we saw with Walmart last quarter is really interesting. Sales revenue was up 5.8%, but that was led by a huge spike in e-commerce, up 27%, so we can see that more people are shopping online. And people shop online because either they don't want to go to the store or They want something really Like, speed is the premier thing. Like, customers will pay for speed.

This is some new technology that we have.

Can I approach the machine?

Yeah, let's check it out.

'So I went to one of Walmart's next-gen fulfillment centers in Green Castle, Pennsylvania to check out what they were doing. And what I saw...

What you see over here is unloading of trailers.

Was an experience that usually was 12 steps. They've condensed it to five steps. So by the time you place your order online, your package will head out the door of that fulfillment center in 30 minutes. Wow. I think that when people think of a fulfillment center, they just think of lot of movement. The movement I'm seeing, a lot of it's being done by the machine.

It's absolutely.

Is that by design?

That is 100% by design.

'So it's very fast. It's five steps. And there's not a lot of people doing the work. It is mostly automation and artificial intelligence. Prior to these next-gen fulfillment centers, of which there are just four right now, but that do apparently 50% of the volume for Walmart, associates would walk about 10,000 steps a day to do all the work within the fulfillment centers. Now, the furthest they walk is from their car to their station. So they're trying to create efficiency and they're trying. To increase the speed at which you get whatever you've ordered.

That process sounds very similar to Amazon, right? And that is kind of the basis for their online shopping that has made them number one for years and years and years. So is this a moment where Walmart gets close to that? Do they see themselves as a direct competitor in the online shopping space?

They'll never outwardly point to Amazon as a competitor, but it was very clear from what I was seeing that all they were talking about was speed.

So we're looking at everything from how we need to build that box, understanding the exact dimensions. We're also looking at where it needs to be shipping to. We're making sure that we've got the right items placed in the right buildings so then it can get to your doorstep.

'And I think there's this reflex from consumers that if you want something quickly, you go to Amazon, right? So it's up to Walmart to break that reflex and make it so the consumer also chooses Walmart as their place to shop when they want something really quickly. And that is very visibly what they are trying to do. And it seems to in some ways be working because of that huge growth just in the third quarter of 27% increase in sales for their e-commerce.

Well, so that's what some of these companies are looking at for the holiday shopping season. But of course that season will come to an end and presumably the Americans who are feeling bad about the economy and the power of their dollar will still feel bad. So I guess I'm wondering, is there anything tangible the Trump administration can actually do to change that either in the short term or leading up to the midterms where this will again be a huge issue?

'It is hard. We saw President Biden try to do that, try to make Americans feel better about the economy than they were. I mean, sure, there's some things that the president can do with healthcare, those rebate checks from all the money that the tariffs are bringing in, but honestly that-

Is that going to be a real thing?

It doesn't look like it right now because the problem with that is once you start handing out free cash, people start spending it and that actually fuels inflation. We saw that during COVID. Exactly. So that's what we don't want to happen. You know, part of this is optics. A lot of people in the political world who I've spoken to have said that the president really needs to get out there and talk to people, talk to farmers who are hurting, talk people who are struggling with affordability. But if you remember during the pandemic and coming off the pandemic, there was so little that the president, President Biden at the time, could do. It was really the Federal Reserve that had a lot of the power to make changes, especially among interest rates. It is tricky for the president to control prices. He has done some stuff. I mean, some of what he's been able to do is he's made able to make deals with pharmaceutical companies to try to lower the prices of drugs, which are very high for Americans. He has been able to bring down some food prices. Remember when eggs were off the chart? I think I came on the podcast. That's right, we did a whole episode about it. We did a full episode about. Well, what the president did with the agriculture department is to set up a more robust biosecurity structure for farms, and that did help contain the avian flu, which was killing so many birds, which was causing egg prices to rise. So there are certainly things that the president has been able to do more on a policy level. But trying to control prices is virtually impossible.

Right. Like you said, the president can't really bring prices down, can do some things to stop them from rising. And a lot of that does fall to the Fed, which he has tried to kind of exert some influence over. And again, it comes down to what Americans are seeing and feeling and critics have said when you have President Trump kind of denying the reality that prices are high and that folks aren't feeling bad where you get some of the political friction. Well, Vanessa, thanks so much. I appreciate it. Happy Thanksgiving.

Happy Thanksgiving!

That's all for us today and I hope you have a nice Thanksgiving as well. Thank you as always for listening. We are very, very grateful for our listeners. We'll be back here on Sunday. Make sure you're following the show wherever you listen. So the new episode pops into your feed right away and I'll talk to you later.