CHICAGO (CBS) -- From the pump to the produce aisle -- the cost of nearly everything is up. We're all feeling it and big-box retailers are reporting huge sales slumps this week.
As target and Walmart laid out mistakes they've made lately, CBS 2's Chris Tye shows us how they're also revealing the new way shoppers are navigating inflation.
"Sticker shock, I would say cereal. Totally stopped cereal," Karen Lewis said.
"I've made different food choices -- like maybe chicken thigs over chicken breasts because it's a little cheaper more, cost-effective," Stephanie Adams-Rios said with a laugh.
If they don't laugh, consumers may feel what retailers felt this week.
Target with a 52 percent drop in profits last quarter. Walmart stock with its worst performance in 30 years.
Gas prices, the war in Ukraine, COVID outbreaks in Asia, and post-pandemic shopping habits in America. Because it's not that people aren't shopping -- it's what they're filling these bags with that's changing wildly.
After stocking up on TVs and furniture during the pandemic, those sectors have gone cold.
More dollars are spent on restaurant gift cards and accessories like footwear.
In the grocery aisle -- brand names losing their allure in favor of generics. And as the price of dairy has soared, full gallons of milk passed over in favor of half gallons.
"Less increments -- to make sure I use it and go through it," Lewis said.
"There's concern about a recession. So households are very nervous, so in response, they're dramatically trying to reduce expenditures, and that affects the bottom line for stores like Walmart and Target," said Phillip Braun, Professor of Finance at Kellogg School of Management.
The last time retailers needed to re-engineer at this scale -- the name on a popular building read Carson Pirie Scott. Buyers are less concerned about yesterday though -- than tomorrow.
Chris: Where is this story going? What will we be talking about on this front in the fall and winter?
Phillip: Things in the near term don't look good. Inflation may stay constant where it is. But I don't see inflation coming down a lot for at least a year -- year and a half.
But not all big box stores are seeing this pinch. Lowes and Home Depot continue to see strong sales as the housing market remains hot.
What should you be watching to see where things go next with all this? The Federal Reserve.
Rising interest rates are one way to curb inflation, but economists fear it's also the fastest way to enter a recession as well.
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