Nearly all consumers are looking for less expensive ways to shop due to higher prices.
Rising prices are causing most consumers to look for less expensive ways to shop.
Seventy-five percent of shoppers have less confidence to spend money today as the rate of inflation soars to a 40-year high, according to a study by First Insight Inc. The report revealed that consumers’ shopping habits have changed as a result of rising prices, with 42% now shopping for deals such as sales or shopping the clearance racks; 40% now staying within a budget, 28% buying less overall and 25% shopping in bulk stores or using warehouse retailers.
In total, 82% of consumers are looking for less expensive ways to shop due to inflation.
The report also showed that nearly all (97%) consumers are reprioritizing how they spend. Groceries ranked as the most important (56%) priority, followed by gasoline (43%), housing costs (29%) and health care (18%).
The lowest spending priorities include home décor (8%) which surged during the pandemic, as well as two of the sectors which the pandemic hit hardest: travel & vacations (7%), and gym memberships (7%).
Highest Inflation Pain Points: Gasoline, groceries, and dining out top the list of the twelve most acute inflation pain points for consumers today. Sixty-six percent of consumers rank high gasoline prices as the number one category affecting their daily lives, followed by the high cost of groceries (58%), dining out (29%), and vehicle prices (21%).
Higher Prices Noticed: Rising gasoline prices have been reported by 72% of consumers, with 69% of consumers noticing higher grocery prices, 57% higher dining out prices, 51% higher vehicle prices, 42% higher prices for apparel/footwear/accessories, and 41% higher prices for household goods.
Cutbacks: Forty-eight percent of consumers say that they will reduce their spend on dining out, with 33% cutting back on groceries, 32% on entertainment, 32% on gasoline, 31% on apparel/footwear/accessories, and 23% on vacations.
Groceries: Eighty-seven percent of respondents say that they are cutting back on groceries, and 41% say that they will save money by cutting back on purchasing name brand products.
Discretionary Spending Slashed: Dining out is the top discretionary spending category consumers will reduce, say 42% of the consumers surveyed. Thirty-three percent say they will reduce on entertainment, 30% on organic/premium groceries, 30% on vacations and travel, and 28% on fast fashion.
Apparel/Footwear/Accessories: Jewelry, one of the biggest growth sectors for the past few years, is the top apparel/footwear/accessories category where consumers will reduce spending in order to deal with higher prices, followed by dress shoes, and casual wear, another pandemic winner.
Other categories where consumers will save include dress shoes at 29%, casualwear at 29%, season-specific apparel at 26%, handbags at 26%, and season-specific footwear at 25%. Only 9% of consumers say that they will reduce their spend for childrenswear
Keeping Up Appearances: Despite inflationary pressures, consumers are committed to keeping up appearances, with only 16% saying they will cut beauty and personal care. Pet services also continue to be important as only 16 % say they will cut here.