Doug McMillon, president and CEO of Walmart Inc. Corporation, participates in a Business Roundtable discussion on the”Future of Work in an Era 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 chief 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 splurge on what’s worth it.
McDonald’s CEO Chris Kempczinski used the word to characterize the company’s strategy on price increases.
And the adjective popped up again during Starbucks‘ investor update, when CEO Laxman Narasimhan outlined the coffee giant’s strategy for general and administrative expenses.
So far in 2023, choiceful has appeared in 15 quarterly earnings calls for 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 “choiceful” when speaking to investors on their quarterly conference calls.
Chief executives have found it a useful adjective this year, whether it’s to describe today’s unusual economy or to reassure investors that they can steer their businesses through anything.
“Choiceful” can’t be found in Merriam-Webster Dictionary or on dictionary.com. But the Oxford English Dictionary notes the earliest known use of the word in the late 1500s. The adjective typically appears .002 times per million words in modern written English, making it one of a group of words “which are not part of normal discourse and would be unknown to most people,” according to the OED.
These days, CEOs have used it to describe a consumer whose behavior has changed over the last two years. Inflation has put pressure on their wallets, leading them to pull back on spending in some areas but not others.
Some companies have found themselves scrambling to explain why consumers aren’t buying their products or why inventory was piling up at retailers. Others, such as Ralph Lauren, have been beneficiaries of shoppers’ choosiness.
“I think that’s what consumers are looking for right now as they are more choiceful,” Ralph Lauren CEO Patrice Louvet told investors on the retailer’s Nov. 8 conference call. “They want to invest in pieces that are timeless, that they can wear beyond one specific season.”
The change in shopping habits has put pressure on some companies’ top and bottom lines, leading executives to emphasize the thoughtfulness of their strategies. That’s where “choiceful” comes in handy again.
Take Molson Coors’ portrayal of its restrained, targeted approach to nonalcoholic drinks. 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 choiceful about where we play, and we have two priority spaces,” CEO Gavin Hattersley said at the company’s investor update Oct. 4.
Or there’s McDonald’s explaining its approach to hiking menu prices. Restaurants, like many other industries, have seen diners push back against higher prices by visiting less frequently or opting for cheaper orders.
“I think, certainly given the inflation that we’ve experienced over the last year — really more than a year — we’ve tried to be very choiceful and disciplined on how we have executed those price increases,” McDonald’s Kempczinski told analysts in late 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 comes to a close, economists are split on whether next year will bring a recession, which could mean even more dramatic challenges for CEOs to tackle.
Maybe they’ll even need to find a new favorite word.