Numerator: Prices have increased 35% for low-income shoppers since 2019
In the face of worsening inflation, lower-income consumers have made multiple changes to their discretionary spending.
That’s according to Numerator’s Consumer Goods Price Index, which shows prices have increased 35% for low-income consumers, defined as those with a household income below $40,000, since January 2018. This is compared to 31% for high-income consumers.
Since 2019, Numerator found that low-income consumers have shifted over $10 billion of their budget from discretionary categories over to everyday essentials, such as grocery. In contrast, higher-income households have shifted $21 billion dollars worth of spending to discretionary goods.
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“With energy prices high and the recent interest-rate hike adding pressure, high-income consumers are pulling back selectively, trading stores and sometimes brands to find value, while low-income consumers have largely already made those adjustments, making restaurants a likely next area for reduced spending,” noted Numerator.
Additional highlights from Numerator include the following:
•Walmart already captured nearly one-in-four dollars spent by low-income households in 2019, versus just 14% among high-income households. Since then, more affluent households have shifted toward Walmart, Costco, Amazon and Aldi at faster rates than low-income households, which Numerator says reflects the “greater runway” they had to migrate toward value-oriented retailers.
•Low-income households have shifted an estimated $1 billion worth of CPG share towards private label products per year since 2019. However, middle- and high-income households have made larger shifts.
•Low-income consumers have shifted food spending away from out-of-home occasions since 2019. However, limited-service restaurants still capture one-in-10 dollars spent by low-income households – the highest of any income group. Numerator added that restaurant prices are up 53% since 2018.
Methodology
Purchase data is based on Numerator’s Total Commerce Panel, which tracks longitudinal purchase behavior from 200,000 U.S. households across more than 50,000 retailers. The Numerator Consumer Goods Price Index is calculated from an average of approximately 7 million verified, item-level transactions each month from Numerator’s Total Commerce Panel.
