Jim Cramer makes sense of the consumer conundrum

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See, that's my conclusion. If your day with a Dell inch up 16 points, that would be advanced .16 trend. NASDAQ game point 1.49%. Nasdaq's got some pretty good mega caps. Of course, now I know this new frugality thesis isn't obvious, but you know what that is is because we keep getting thrown off the scent. Take yesterday we learned that the CFO of Walmart, John David Rainey, total straight shooter, gave a talk where you said he'd be difficult for his company to beat its excellent first quarter. That was taken by Wall Street as what's known as a guy down. A bummer of a forecast and Wall Street stock. Will it Walmart Stark Will it got hammer. But if you do a simple ChatGPT query about what Rainey really said versus what he said on the last conference call, you'll find it. He used almost the exact same quote. Basically that whole talk was a non event yesterday. So if you sold Walmart yesterday off the glib analysis the Walmarts have you suboptimal quarter, then you got it raw Walmarts everyday low price model and their rollback in prices for thousands of goods has made the merchandise incredibly appealing to the newly frugal consumer. Business remains incredibly strong and the stores have never ever look better. A lot that Wall Street ever goes to one of their stores. I'd like to invite them. They would really enjoy it now. That's the same reason why Costco is such a strong stock. It's amazing how they're pressuring suppliers to rollback prices. And every time I look, it feels like there's a new Kirkland Signature brand, their house brand that has more volume and a lower price and is in better. I got to tell you is is a better shape than any of the big brand name, big brand names. I love their product. I always feel that Costco is in my corner to my corner versus the greedy suppliers that want their prices back. They don't want, they won't lower their prices. They want lower prices where they should have been. And they look like they solved all the supply chain issues, right? They solved the transporters, they solved the raw cost inflation. But other than Costco, who's in my corner? I mentioned TJX last night as an off price retailer, right? That's been getting the pick of the apparel litter because the full priced outfits are basically just flat out losers. They don't fit the profile of the newly frugal consumer and where she wants to shop. TJX though, does. I highlighted this last step with that piece of an Ollie's. The ultimate and closeout were dealers by the way, but retailers. By the way, Matt Boss from JP Morgan best retailer anus America. He's noticed the Big Lots, another not so hot retailer is on the ropes. If Big Lots were to liquidate, there'd be almost 1400 locations for Ollie's to potentially pick and choose from to expand dramatically increasing its footprint now. Not to mention all the cheap close up merchandise they can pick up for next to nothing. That would cause the stock of Ollie's to soar. And why not, it should. New frugality. The other two off prices were plays. Raw stores and Burlington stores are both performing at a high level. We know apparel inflation has been sticky in the consumer price index, but these four off price chains are cutting the price of apparel aggressively. New frugality again, though we keep getting thrown off by of my thesis by smoke screens. You might think, wait a second, the consumer is clearly getting blasted because of all the dollar store stocks. They're getting crushed, right? Aren't they the last bastion of frugality? No, that would be wrong. They're not. I think people have realized that dollar stores have become relatively expensive places to buy goods. They raise their prices very aggressively during COVID. Even calling them dollar stores is a misnomer now. They definitely don't have the lowest prices. That's Walmart. That's Costco. The younger consumer, not the ones my age or even the 20 years younger ones that the ones who were in their 20s and 30s and live with this, They know how to measure what's going on. They measure price versus volume all the time. They can comparison shop much better than Sam Walton could because they've got constant Internet access their whole lives. They won't let the dollar stores get away with their their most latest round of inflation. They want prices lower so the dollar store business declines. Don't spoil my new frugality thesis, because if you actually care about finding bargains, you don't want to shop there. On the other hand, look at the success of Tamu and Sheehan. There's two Chinese companies. You go off about Asian companies, you go online, you see the prices, and I have to tell you, they seem like mistakes because how could anything be so cheap? But no, the prices are actually real. The mistake is not taking advantage of them, although sometimes taste may come into play, at least periodically. As say, someone who bought a lot of stuff from Temu for my wife, only to see it in the blue recyclable trash can the next day. Ouch. Now, when I said my feelings were hurt, she said why She threw it in the right bin. Let me give you another example, a little less anecdotal. Carnival reported tremendous numbers yesterday. You know, you might think there's nothing frugal about taking a cruise, but what could be more discretion and go on a cruise that would be wrong. If you want to take a vacation, some of these cruise options are insanely cheap. Carnivals inside rooms range from $150.00 to $245 a night. Real equipment 175, Norwegians 245. These prices are phenomenal. I mean kind of ridiculously low when you compare it to hotel rooms and airfares, right? By far the most value conscious way to taking vacation. That's the new fruit reality. Yesterday we talked about the horrendous sales of Pool Corp, which sells all sorts of swimming pool related goods. I thought the problem with Ignition was consumer pushback. It's true that with rates too high, maybe more expensive to take out a home equity land of building pool, But I won't take you in this one. You know, I came up with an alternative theory. The cost of Labor, which has not yet come in. It's a big issue. Paying someone to fix up your home is borderline extortion right now because the contractors hold all the cards. It's simply become too expensive for most homeowners to afford. You need to see these costs come down before you see more pools being built. The cost of Labor is too high for many homeowners. We've seen new boat sales plunging too. Now, some of that's because they're pricey. But again, the frugal consumers, cagey and clever and using the web constant, get a better deal. What they found, they actually love boating more than ever. But they know it's too expensive to buy a boat. So what do they do? Brunswick bought Freedom Boat Club, a rental service. You don't have to keep up with maintenance or docking fees or financing costs. You just borrow the boat and return it when you're done. The value conscious way to go boating. I am sure people, yes indeed who they rent it and they say, oh I ought to have one. But I'm telling you, the renting society is winning the beating the owning society. You wonder why the sales of CVS and Walgreens in port tomorrow but so weak. It's simple. I don't know. Seoul thinks that those sorts of bargains in the past, the drug stores were time savers. You could always drop in, get what you want, get out in 2 minutes. But the frugal consumer just doesn't spend money at these places now that everything's locked up behind plastic. Amazon tends to sell almost everything you can get from Acvs or Walgreens and they usually deliver it the next day or even the same day in many parts of this country and at a lower price order in the morning. You get back home, it's right there in your porch. It's way if you again, this younger classic consumers knows pricing better than any other retailer and that usually puts Amazon ahead of the game. Let's not forget restaurants. Today we got the Flyers from McDonald's. I don't know if you're loyal. Remember, you might have seen it. They got a $5 meal going. They finally had to bring it back after raising prices endlessly. But I don't know if Vicky D's can get traction, and not just because of the small fries. Texas Roadhouse and Brinker are offering $11.00 dinners, much more food. They've got great liquor options. They're so cheap that their sales are booming. Brinker, which is owner of Chili's, has leveraged the newly frugal consumer to the hill and played it up on social media. And that's why that stocks been the best in the group. So let's suspend the notion of the consumers totally strapped for cash. That's wrong. The bottom line is the consumer is finally pushing back and demanding better prices. We're no longer going to be counted to pay more than what something seems to be worth, which bodes very poorly for those stores that have yet to roll back their prices, but very well for the ones I've mentioned. Bottom line, the consumers, no mood, no mood to pay more for less. You just can't let the distraction, the false characterization throw you off the scent. If you offer the consumer a real bargain, not a dollar store one, that consumer is going to take it. Ryan in Michigan. Ryan. Hi Jim, third time caller. Thank you for all your input. Third time, I love that there. We had a third time our last night he had, it turned out that he had the stake and he loved it and gave us a nice note. What's going on? Thinking about my bought AT&T about a year ago at the low and it's rallied nicely this year and has recently hit a 52 week high. Thinking to keep that at some more Verizon, T-Mobile, I like the yield on Verizon. OK, look, ATTS come back in 52 week high, but you know, that's that's kind of from a low level T mobiles got growth. I like growth. I am a big believer in growth. I want to go with T-Mobile now look, we need to stop with the notion that the consumer strap for cash. Instead, accept that the consumer is fed up with paying unfair prices that were jacked up during COVID and needs to come down now. If they're offered a bargain, they will gladly take it. Maybe the guys who are extortionate should realize that Costco and Walmart are winners. I mean, Mike Levi's is pulling at the Ernie's. I'm going straight to the source. Let's find out what's really going on here before we just dump the stock, please. And Speaking of apparel, a winner's emerged in the space that we haven't focused on now real what it is and why I think it keep running and why it's got the wrong name and it isn't. RH and Paychex has a solid beat on the state of medium and all businesses. And with investors concerned about economic growth, I'm getting a sense of where we stand with the CEO, really. So stay with the newly frugal Kramer. Don't miss a second of mad money. Follow at Jim Cramer on X Have a question? Tweet Kramer hashtag MAD mentions. Send Jim an e-mail to [email protected] or give us a call at one 807 four Three CNBC. Miss something? Head to madmoney.cnbc.com.