Major Consumer Companies Warn of Spending Decline

The companies behind food and home essentials are warning of tougher times ahead for U.S. shoppers.

Major consumer giants are cutting their financial forecasts, bracing for lower sales and profits. Among them are PepsiCo (which owns Frito-Lay and Quaker Oats), Kimberly-Clark (maker of Kleenex and Huggies), and Procter & Gamble (maker of Tide and Pampers).

"Relative to where we were three months ago, we probably aren't feeling as good about the consumer now," PepsiCo Chief Financial Officer Jamie Caulfield told investors last week during the first wave of earnings reports since President Trump imposed a 145% tariff on Chinese goods, a 10% tariff on all global imports, and a 25% tariff on imported aluminum.

The aluminum tariff, in particular, is driving up manufacturing costs.

Until recently, most companies cited "uncertainty" about the future. Now they are offering specifics. Kimberly-Clark expects $300 million in additional costs from the trade war, and Procter & Gamble warned it may raise prices. Chipotle said shoppers have already started cutting back.

"In February, we began to see that the elevated level of uncertainty felt by consumers was starting to impact their spending habits," Chipotle CEO Scott Boatwright told investors. "Saving money because of concerns around the economy was the overwhelming reason consumers were reducing the frequency of restaurant visits."