Doug McMillon, president and CEO of Walmart Inc. Corporation, participates in a Business Roundtable discussion on the “Future of Work in an Age of Automation and Artificial Intelligence” during a CEO Innovation Summit on December 6, 2018 in Washington, DC.
Mark Wilson | Getty Images
‘Choiceful’ doesn’t exactly roll off the tongue, but top executives love it.
It’s how Walmart CEO Doug McMillon described the average consumer, who is trying to cut back on spending but is still willing to spend what’s worth.
McDonald’s CEO Chris Kempczinski used the word to characterize the company’s strategy on price increases.
And the adjective resurfaced during Starbucks‘ investor update, as CEO Laxman Narasimhan outlined the coffee giant’s strategy for general and administrative expenses.
So far in 2023, choice has appeared in 15 quarterly earnings reports of S&P 500 companies, according to a CNBC analysis of FactSet transcripts. That’s nearly double the usage last year, when it totaled nine mentions. In 2021, only the CEOs of Molson Coors And McCormick said “elective” when speaking to investors on their quarterly conference calls.
Chief executives have found it a useful adjective this year, whether describing today’s unusual economy or reassuring investors that they can see their companies through anything.
“Choiceful” cannot be found in Merriam-Webster Dictionary or on dictionary.com. But the Oxford English Dictionary lists the earliest known use of the word in the late 16th century. The adjective typically occurs 0.002 times per million words in modern written English, making it part of a group of words “that are not part of normal discourse and would be unknown to most people,” according to the OED.
Today, CEOs use it to describe a consumer whose behavior has changed over the past two years. Inflation has put pressure on their pockets, causing them to cut back on spending in some areas but not in others.
Some companies are struggling to explain why consumers aren’t buying their products or why inventories are piling up at retailers. Others, like Ralph Laurenhave taken advantage of shoppers’ pickiness.
“I think this is what consumers are looking for right now because they have more choices,” Ralph Lauren CEO Patrice Louvet told investors during the retailer’s Nov. 8 conference call. “They want to invest in pieces that are timeless, that they can wear for more than one specific season.”
The change in shopping habits has put pressure on the top and bottom lines of some companies, causing managers to emphasize the thoughtfulness of their strategies. That’s where ‘choiceful’ comes in handy again.
Take Molson Coors’ portrayal of its understated, purposeful approach to non-alcoholic beverages. In recent years, the beer giant has begun shifting away from ales and lagers in favor of faster-growing categories such as energy drinks.
“We’re going to be picky about where we play, and we have two priority spaces,” CEO Gavin Hattersley said during the company’s Oct. 4 investor update.
Or there’s McDonald’s explaining its approach to raising menu prices. Restaurants, like many other industries, have seen diners resist higher prices by visiting less often or opting for cheaper orders.
“I think especially given the inflation that we’ve experienced over the last year – actually over a year – we’ve tried to be very selective and disciplined in how we’ve implemented those price increases,” McDonald’s Kempczinski told analysts in late June . October.
Consumers are still feeling the sting of higher prices at McDonald’s and elsewhere. They’re racking up record credit card debt even as inflation cools.
As 2023 draws to a close, economists are divided on whether a recession will happen next year, which could spell even more dramatic challenges for CEOs.
They may even have to find a new favorite word.