American consumers are feeling the pinch, with several retail and food service companies like Kraft Heinz Company (KHC.US) warning of weakening demand.

With the US-Iran war pushing up US gasoline prices, executives of American retail, catering, and consumer goods companies are becoming increasingly concerned about the deteriorating spending power of consumers, especially low-income groups facing greater financial pressure. Steve Cahillane, CEO of Kraft Heinz Company (KHC.US), said this week that some consumers "have almost no money left by the end of the month." He pointed out that low-income groups are currently experiencing negative cash flow, with many families beginning to use savings to maintain their daily expenses. Since the outbreak of the COVID-19 pandemic, despite long-term high inflation pressure in the US, overall consumer spending has shown strong resilience, helping the US economy continue to grow and temporarily easing market concerns about recession. However, with oil prices continuing to rise, the market is worried that consumers' ability to bear the costs is gradually nearing its limit. Marc Bitzer, CEO of Whirlpool (WHR.US), said that the Iran war has further amplified consumers' concerns about rising living costs. Whirlpool said that the company originally expected that after the end of the cold winter, demand for household appliances in the US would gradually recover, but the war has caused a significant deterioration in consumer confidence. The company even stated that the impact on industry demand is similar to that during the 2008 global financial crisis, with overall demand being dragged down by about 15%. The fast-food industry is also feeling the pressure. Chris Kempczinski, CEO of McDonald's Corporation (MCD.US), said that consumer confidence has not only not improved but may further deteriorate. The company pointed out that high oil prices are having a more noticeable impact on low-income consumers and causing market anxiety to rise. The dine-in restaurant industry is also experiencing slowing demand. Dine Brands Global (DIN.US), which owns the Applebee's and IHOP brands, said that consumers who are more sensitive to prices and more focused on value for money are starting to reduce dining out. Meanwhile, eyewear retailer Warby Parker (WRBY.US) pointed out that young consumers are facing a double squeeze from a slowing job market and rising student loan burdens. According to data from the American Automobile Association (AAA), the average gasoline price in the US has now risen to $4.56 per gallon, the highest level since July 2022. As consumers are allocating more of their income to pay for fuel costs, budgets for dining out, entertainment, and other discretionary spending are decreasing. Though higher tax refunds have somewhat alleviated pressure, consumer confidence has fallen to historic lows. Meanwhile, the US savings rate hit its lowest level in three years in March, showing that more families are relying on savings to sustain consumption. Recent research by the New York Fed also shows that low-income consumers have begun to actively reduce gasoline consumption to control expenses. Bill Adams, Chief Economist at Comerica Incorporated, said that in the short term, US households can still maintain consumption by consuming savings or increasing credit card usage, but if oil prices remain high in the long term, consumers will eventually have to change their spending patterns to balance their budgets. Signs of weak consumption have begun to reflect in corporate performance. Planet Fitness (PLNT.US) saw its share price drop by the largest margin in history on Thursday, lowering its full-year performance guidance and stating that the addition of new members during the traditional New Year fitness season was weaker than expected. The company also announced a suspension of its plan to raise premium membership prices. CEO Colleen Keating said, "Consumers and the overall economic environment have changed."