December 6, 2023
CEOs have a new favorite word: ‘Choiceful’

  • “Choosy” is CEOs’ new favorite word to describe consumer spending behavior and their own companies’ strategy.
  • So far in 2023, “Choiceful” has appeared in 15 quarterly earnings calls for S&P 500 companies, up from just two in 2021, according to a CNBC analysis of FactSet transcripts.
  • Chief executive officers including Walmart’s Doug McMillon and McDonald’s Chris Kempczinski have used the adjective when speaking to investors this year.

Doug McMillon, Chairman and CEO of Walmart Inc. Corporation, participates in a business roundtable discussion on “The Future of Work in the Age of Automation and Artificial Intelligence” during the 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 like it.

This is how Walmart CEO Doug McMillon describes the average consumer, who is trying to cut back on spending but is still willing to spend money on what’s worth it.

McDonald’s CEO Chris Kempczinski used the term to reflect the company’s strategy on price increases.

And that adjective came up again during Starbucks’ investor update, when CEO Lakshman Narasimhan outlined the coffee giant’s strategy for general and administrative expenses.

Choiceful has appeared in 15 quarterly earnings calls for S&P 500 companies so far in 2023, according to a CNBC analysis of FactSet transcripts. This is almost double the usage from last year, when there were a total of nine mentions. In 2021, only the CEOs of Molson Coors and McCormick said “alternative” when speaking to investors on their quarterly conference calls.

CEOs have found it to be a useful adjective this year, whether it’s describing today’s unusual economy or reassuring investors that they can run their businesses through anything.

“Choiceful” cannot be found in the Merriam-Webster dictionary or But according to the Oxford English Dictionary, the earliest known use of the word was in the late 1500s. According to the OED, the adjective typically occurs about .002 times per million words in modern written English, making it one of a group of words “which are not part of general discussion and would be unknown to most people.”

These days, CEOs use it to describe a consumer whose behavior has changed over the past two years. Inflation has put pressure on their wallets, causing them to scale back spending in some areas but not others.

Some companies are having trouble explaining why consumers are not buying their products or why retailers are stockpiling stock. Others, like Ralph Lauren, have been beneficiaries of buyers’ preferences.

“I think that’s what consumers are looking for right now because they have more choices,” Ralph Lauren CEO Patrice Louvet told investors in the retailer’s Nov. 8 conference call. “They want to invest in pieces that are timeless, that they can wear beyond a specific season.”

Changes in purchasing habits have put pressure on the top and bottom lines of some companies, leading executives to emphasize the thoughtfulness of their strategies. This is where “optional” comes in handy again.

Take Molson Coors’ illustration of its restrained, targeted approach to non-alcoholic beverages. In recent years, the beer giant has begun to shift away from ales and lagers in favor of faster-growing categories like energy drinks.

“We’re going to be selective about where we play, and we have two priority locations,” CEO Gavin Hattersley said in the company’s investor update on Oct. 4.

Or McDonald’s explaining its stance on increasing menu prices. Restaurants, like many other industries, have seen diners push back against higher prices by visiting less often or opting for cheaper orders.

“I think, certainly given the inflation that we’ve experienced over the last year — actually over a year — we’ve been very selective on how to execute those price increases,” McDonald’s Kempczinski told analysts late in the day. And tried to be disciplined.” october.

Consumers are still feeling the sting of high prices at McDonald’s and elsewhere. Despite low inflation, they are racking up record credit card debt.

As 2023 approaches, economists are divided on whether next year will bring a recession, which could mean even more dramatic challenges for CEOs to deal with.

They may even need to find a new favorite word.

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