Consumers plan to trim restaurant, entertainment spending this summer
Consumers are continuing to make spending tradeoffs in the face of high prices.
Twenty-one percent of consumers expect to spend more on personal care products this summer, a significant drop from a year ago when about one-third (32%) expected to do so, according to the summer edition KPMG’s 2024 Consumer Pulse Survey of 1,100 American adults. Almost three times as many consumers anticipate spending less (43%) than more (15%) on out of home entertainment, and almost twice as many consumers plan to spend less (41%) than more (21%) on restaurants.
On average, KPMG found that consumers think they will reduce their monthly spend on restaurants by 9%, entertainment and media (both in and out of home) by 8% and travel and vacations by 7%. Between 45% and 60% of consumers plan to maintain the same amount of online spending on essentials, but only grocery (29% expect to spend more, 18% say spend less) saw an expected increase.
"Consumers are tightening their belts another notch as they hunt for discounts, and even some essentials are being impacted," said KPMG U.S. consumer and retail sector leader Duleep Rodrigo. "We have already seen a few retailers lower prices, as they look to maintain the balance between their margins and demand. If consumers continue to tighten their spending, retailers will want to consider whether placing more emphasis on product sizing and the experience they offer consumers may be more effective in the long run than just lowering prices.”
The survey also revealed that there is a consistent level of concern across all generations about companies collecting their personal data, yet more than half are willing to trade personal data for financial incentives, and 44% would do so for increased privacy controls.
Of those who are aware companies track online activity to develop personalized offers, only 29% are comfortable with the idea of companies using GenAI to analyze their personal data. Almost half (47%) are uncomfortable.
The survey also revealed that Gen Z is attracted by improved quality or subscriptions (57%) as the main reason to currently consider paid memberships and subscriptions over three other reasons, while millennials cite convenience and improved quality or services as their top reasons (59% for each). Cost savings are the top reason for Gen X (66%) and boomers (65%).
When it comes to making paid memberships or subscriptions more appealing, about three-fourth of consumers are willing to pay less than $100 per month for all their memberships or subscriptions, with 45% willing to pay less than $25 a month.