NEW YORK, Nov 15 (Reuters Breakingviews) – Jeff Bezos, the man who sells everything, is telling shoppers to stop buying everything. The Amazon.com (AMZN.O) founder warned consumers in an interview with CNN to put the brakes on large expensive purchases like TVs and cars and save some “dry powder” for a prolonged economic slump. It may seem odd that Bezos, who built a $1 trillion company on ease and convenience, is doling out financial advice that cuts against his business interests. After all, the upcoming holiday season is the most important for retailers, making up 30% or more of revenue at companies like Target (TGT.N) and Macy’s (M.N).
Bezos’ advice might be less self-defeating than it sounds. Amazon’s game isn’t necessarily getting consumers to spend more of what they earn, but getting them to spend more of it with Amazon. E-commerce is only 14.5% of overall retail sales of some $1.8 trillion, according to the U.S. Census Bureau. Meanwhile pure-play e-commerce companies that don’t have their roots in real-world stores represented 8% of retail sales in the second quarter compared to 5.7% in the second quarter in 2019, reckons UBS. In short, Amazon can grow even when retail doesn’t, meaning Bezos the billionaire can afford to be the unlikely voice of parsimony. (By Jennifer Saba)
Follow @Breakingviews on Twitter
(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)
Capital Calls – More concise insights on global finance:
Intesa’s payments exit sends awkward message read more
Roche reminds investors big drug bets have risks read more
Alibaba’s Singles Day enters healthier phase read more
Twitter gives big advertisers the excuse they need read more
Super-voters override self-driving truck controls read more
Editing by John Foley and Sharon Lam
Our Standards: The Thomson Reuters Trust Principles.
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
#Breakingviews #Jeff #Bezos #personal #finance #guru