[AUDIO LOGO] Black Friday falls this week just as we are seeing the highest inflation since the early 1980s. And that is eating away shoppers' purchasing power. My next guest says, though, high prices won't hurt all retailers right across the board. In fact, some brands and retailers might actually benefit from some of the higher prices. Joining me now is Ben Gossack. He is portfolio manager at TD Asset Management. It is great to have you here. I'm excited to be back. And what an opportune time to talk about retail consumers. It's Thanksgiving tomorrow. It's Black Friday. But looking at my email, I'd think it was Black Friday starting last week given some of the promotions that we're seeing. And I've actually partake-- partaken? Partook? Anyways-- in some of those promotions already. And I was noticing that because there's a lot of stuff happening really early. What are you expecting to see? When you look at US consumers-- you know, I'm a bit of a data nerd. So I'm always looking at, oh, home prices are starting to fall. And people are starting to get pinched. And savings are down. What state are they in? I think most people have a dim view of the general consumer, in that we've seen higher interest rates. We've seen inflation. We've seen rising energy. And we've seen mortgage rates go up. And so people are worried about the consumer. I'd say there are parts of the consumer that have been weakened. And like you said in the intro, there are other parts that are actually strong and will continue to spend throughout this holiday period. Now, those other parts I'm assuming are those with money and those that do not have as much. And the ones that don't have as much are going to get hurt more, as we often see during downturns. I know you've just come back from a retail conference. And you've come to the conclusion that-- or seen that some of these brands are not concerned or not afraid of this inflationary environment. I came in very bearish. We've talked about retail and trouble due to supply chains, inventories, having to run promotions. And that's true, but not true for some. What I was surprised is that some brands are taking up pricing. And they're not seeing any impact in terms of elasticity. KIM PARLEE: They're taking up pricing? They're taking up pricing. And if anything, it's creating more demand for their product. That's a Giffen good. I remember that from economics, actually. So you've got a chart here that's going to show a bit of your thinking right now in terms of what you're seeing. And this is, I think, looking at US Atlanta Fed wage growth by wage level. So tell me what you're seeing here. BEN GOSSACK: So I wanted to take some of the anecdotes from the meetings put it towards data. And I encourage everyone to check out some of the websites from the Federal Reserve. What you're looking at is wage growth. And it's a 12-month moving average. The blue line in the middle is the overall. And it's about 6%. When you compare that to the last inflation report, that was 7.7. So overall, the consumer is not terribly in shape-- or not in so much terrible shape if they're keeping up almost with inflation. But it's a tale of two stories. The top line is the top wage level earners. So this is your six-figure professional. They're earning 7.5%. They're not seeing inflation. They're able to continue to spend. And their bank accounts are still robust versus pre-COVID levels. It's the lower-quartile employee that is earning 4.5% that is seeing the purchasing power erode. And that's where we're seeing down trading activity or people deferring purchasing. There's larger policy implications, I'll say for this. And people have to figure out-- governments and politicians-- about what this actually means. But from an investment standpoint, where are those that are getting the 7.5% rise in wages spending? And I know this is leading you into more the luxury side of things. Right. And so like I said before, we had avoided all retailers. And coming out of the conference, I think there's an opportunity within luxury. Again, the uber luxury segment continues to perform. A lot of it is also driven by secular trends. Luxury grows 6% to 10% per annum. And it's driven by human needs. So you buy something nice with a brand. It gives you some confidence. You feel good about yourself. It may also just be, I want to show that I made it. And it's this innate human nature that's consistent and shows up year and year. And so that's why these luxury, these uber brands are in high demand. And I think just coming out of COVID as well, life isn't better. There's war in Eastern Europe. There's inflation. And so a lot of people just say, I want something good, and I want it now. And they have the means and the ability to buy these nice items. They're not going for the tub of ice cream. They're buying the Gucci. When you talk about the uber luxury, I mean, what are the kinds of sectors and names and things that fall with the uber luxury? Not specific stock names, but kinds of things you're thinking about. Yeah. So it could be high-end leather goods. It could be jewelry. It could be even a fancy sports car. We think of automotive as sort of one category. But a Ferrari, a Porsche, some sports car is also considered high-end luxury. And there's insatiable demand for these types of vehicles. You're seeing resiliency. And I understand the thesis there with the growth in wages. But when I look on my social media feeds, I'm seeing layoffs. And I'm seeing layoffs at Twitter. I'm seeing layoffs at Facebook. And these are white-collar jobs. And some of these are software engineers who do pretty well for themselves. Is that concerning for you? So I think given the level of interest rates, I think we should all be concerned at some point the job market will start to crack. But having said that, the job market has shown resiliency even at the low level. I've spoken to a restaurant manager. He can find many managers, but he can't find servers. And he will pay, no matter what, even today, for servers. I think when it comes to the high tech worker, yes, we're seeing the layoffs. We're seeing the big 6,000 jobs, 10,000 jobs reported. It's something for us to watch. It hasn't shown up in initial jobless claims. But also think about all of the other enterprises that are going through digital transformation. They couldn't get any of these employees because there was a better opportunity at a Facebook, at an Amazon. And so while they're being laid off, I think they will be scooped up by a lot of these companies that needed this talent but couldn't afford the talent. Yeah. Yeah. The talent mismatch is still there in terms of the demand. OK. Given your bullish views on the luxury and the high-end sector, what names have got your attention? Yeah. So I think, again, when we talk about uber luxury, we're talking about high-end leather goods, accessories, ready to wear. Names that come to mind would be an LVMH, an Hermes. I think there's also a tremendous opportunity-- we have to do more work here. There's lots of brands. Everyone, again, wants to abandon the middle and move to the high end because you can justify raising your prices. And so there are many different brands that are trying to go for this elevation strategy. So happy to come back and talk about the names that we're discovering. But if they can pull it off, again, we can see their stock prices appreciate. KIM PARLEE: Interesting conversation, Ben. Thanks so much for joining us. Thanks for having me.