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Where are consumers spending amid sticky inflation?

Sticky inflation has put pressure on consumer wallets, and more people are seeking cost-cutting measures to ease budgets. Lightspeed (LSPD) CEO Dax Dasilva joins Yahoo Finance to discuss the latest consumer trends as prices remain a top concern.

Dasilva explains that consumers are treating dining out as a luxury, "making conscious choices about what they order." However, they are still finding opportunities to treat themselves in areas like nonalcoholic beverages and desserts. He adds that bars are taking a hit, but offerings like happy hours are popular with consumers.

On the retail side, he says that consumers are staying home more, which is giving home, garden, pet, and hobby stores a boost.

Lightspeed offers payment and point-of-sale solutions to restaurants nationwide, and Dasilva says despite weaker consumer spending, the company is entering a "new phase of growth." He says that Lightspeed is expected to reach a billion dollars in revenue in the 2025 fiscal year as the company looks to expand its software sales, find new efficiencies, and leverage artificial intelligence.

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For more expert insight and the latest market action, click here to watch this full episode.

This post was written by Melanie Riehl

Video transcript

The consumer broadly has been pulling back from dining out and heading back into the kitchen in the past quarter.

Wal Mart's customers were drawn in by low prices especially in the grocery category.

While restaurant giant dime brand, all same store sales fall across its major brands.

Lightspeed Commerce platform offers payment and point of sale solutions to restaurants nationwide here to discuss trends amongst consumers, light speed, CEO Dax to silver.

You guys also earnings, which is why we see the stock price going up by some 18% today.

Dax, thanks so much for being here.

Um And so you guys offering the software suite that you do to a broad swath of restaurants, small retailers, et cetera.

You have a pretty good temperature reading here.

What were you seeing in terms of demand last quarter?

And where was that demand coming from?

Yeah, we see a lot of data across our retail and hospitality businesses around the world.

Uh We are seeing uh you know, on the hospitality side, we're seeing uh people treating going out to eat as a luxury.

Uh And so they're making they're making very conscious choices about what they order.

Uh you know, down, uh, we see, we see things like, uh, tasting menus and appetizers and, and tapas.

Uh, but they are rewarding themselves with things like, uh, non alcoholic bever beverages, uh, uh, coffee, uh, desserts, pizza.

Uh, so those are some of the trends that we're seeing, we're seeing bars down.

But, uh, but, but happy hours, those kinds of offerings are, are popular with consumers.

And on the retail side, we're seeing a little bit of a change from uh the people, the investments people are making in outdoor sports and uh apparel and footwear.

Uh and they're, they're staying home more.

So they're uh investing in home and garden, uh pets, hobbies.

Uh and they're uh they're buying their, their wine and beer and, and liquor from retail stores.

And Dax, I also have to ask you quickly about your own role because it, it seems like that, that uh you've been reappointed here, Dax.

So, so no longer interim wa walk us through that news, Dax.

Why the change?

Yes, it's a new, a new phase of growth at Lightspeed.

We're in our profitable growth phase.

Uh I served uh I'm the founder, so I was the CEO for 17 years.

I became the exact chair for two years.

Now.

Now I've come back to, to Lightspeed as we're in this new phase, balancing profitability and growth.

We're going to reach a bill in, in revenue in this fiscal year 25 which were just uh uh starting and, and really just balancing being a high growth company, we always have been with increasing profitability.

So we're forecasting uh the next year will grow north of 20% but we'll also show 40 million in IDA.

Um How are you making that transition?

Dax.

Sort of what are you focusing on on you?

Are you cutting back anywhere?

Are you taking your foot off the gas in certain areas?

So we have a lot of market share to grab in terms of our complex hospitality and retail merchants.

So uh we are being aggressive on software subscription uh growth in this next year.

We spent last fiscal year really penetrating our payments platform across our, our across our customer base and we were very successful.

So this year on that foundation, we're really expanding software sales.

We've done a restructure, I've done a restructuring in my 90 days since I've been back.

Uh And so there's more cost efficiencies to be had.

Uh We're looking at facilities and other other things that we can um you know, make more efficient across the business.

You know, Jack, you can be in a tough market, lo lots of competition.

What what sets lightspeed apart?

What's the competitive advantage there?

So we serve that more complex segment of retail and hospitality.

Our, our, our customers are not quite enterprise, they're the scaled up established merchants in retail.

So on the retail side, complex inventory, multichannel, multi location uh that's, that's our sweet spot.

We, we tailor our customer experience and our product uh for uh for that market on, on hospitality.

We're serving more complex hospitality businesses like restaurants with, with fine dine and table service, but also restaurants integrated with hotels, with resorts, with golf courses and that specific set of, of needs.

Uh And so we uh this is a very large t and a very exciting opportunity and we're, we're tailoring both our product and innovation uh and our customer journey for uh to best serve that market.

Um de something else about you guys that is always uh that I found fascinating is that you also have very high end restaurants that are among your clients.

You guys have I saw, yeah, as of last uh count over 100 and 60 Michelin starred restaurants um that are clients.

What are you seeing in that cohort?

Are you seeing any kind of pull back?

Are people buying lower priced entrees, for example, rather than the highest, you know, in our, in our um the on the customers using our flagship products uh which is got more high end customers.

We actually saw a GDV grow by 29%.

Uh So there is, I think a health among those businesses uh that may not be seen across the broader market.

And dax just for merchants who might be, you know, listening right now to this show, any kind of insight or, or guidance, you could offer dax about how to optimize growth right now.

So we're leveraging A I across a lot of our product suite so that we can give recommendations and um uh and streamline the mundane tasks.

I think that leveraging A I in your business.

Uh so that as a business owner, you can focus on the guest experience or the curation of your retail products, that's where you want to spend your time.

So you know, a platform that gives you leverage by removing some of that uh some, some of that repetitive work uh is where you want to be and you want to get the recommendations.

Like for example, on hospital, on hospitality, we'll give you recommendations on what are the menu items that uh that the that the current consumer is really excited about Dax.

It was good to have you on the show.

Thanks for joining us.

Thank you.