Cramer points out current economic problems that some companies are ignoring

CNBC’s Jim Cramer said Monday that a variety of companies, to their detriment, won’t admit they’re suffering from certain ongoing economic trends.

“If companies faced changing their circumstances, things would be much easier for everyone. But who wants to admit they’ve made mistakes?” he asked. “If they had proven themselves, I think they would gain a lot of credibility for themselves, which leads to higher share prices. the worst, not the best.”

For example, Cramer said, some food and beverage companies are loathe to admit that the popularity of GLP-1 weight loss and drugs could hurt business. He said these treatments are powerful and appear to have changed consumer behaviour, with patients eating less junk food and drinking less alcohol. He pointed to the creator of Jack Daniels Brown-Formanwhich missed estimates in its most recent quarter and is down about 23% year-to-date. Cramer also mentioned peer company spirit Diageowhich saw sales decline in its most recent quarter and is down more than 14% year-to-date.

He continued, saying other consumer-oriented companies don’t recognize that they need to lower prices to attract customers in a bloated landscape. According to Cramer, few companies have lowered prices since raising them during the pandemic. He noted that outfits that have cut prices, such as Costco and Walmartis doing better than some retail peers.

Enterprise software companies are bullish on the issues in their businesses, he said, even though they are one of the worst-performing sectors in the market. Cramer added that it was not clear what exactly was affecting companies, but suggested that they had not realized the return on investment in a new landscape where artificial intelligence could make many employees redundant.

“Maybe they think if they ignore the problems, they will go away. Let me ask you, ‘Has it ever worked for you?'” he said. “Denial is a powerful defense mechanism, but it’s a terrible way to run a business.”

Brown-Forman and Diageo did not immediately respond to a request for comment.

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Disclaimer CNBC Investing Club Charitable Trust owns Costco stock.