Survey: Struggling consumers seek to reduce spending

Even affluent consumers are finding ways to cut costs as inflation takes its toll on shopping behavior.

According to the latest Consumer Trends Tracker (CTT) survey from customer data science company Dunnhumby, comparing prices online before and while shopping is the second-most-popular customer behavior, with 37% of surveyed consumers reporting they do this. Rounding out the top three most common customer behaviors are buying in bulk (35%), tied with shopping at different stores to find the best value (35%).

Since April-May 2022, there has been an 11% increase in customers aged 35-44 buying in bulk. According to Dunnhumby data, this age group is also the most likely to choose private brands over name brand alternatives.

In addition, low base prices are also important across all incomes, even among affluent shoppers. Seventy-five percent of all respondents, including 73% of respondents from households with incomes above $100,000, said that low base prices are important.

Other steps many respondents are taking to help beat rising prices include shifting spend to dollar stores. Since April-May 2022, Dunnhumby data shows dollar stores’ share of wallet has increased 2.1% (17.8% to 19.9%) while specialty / premium stores’ share has decreased 1.1% (18.7 to 17.6%).

The survey also indicates consumers are trading down in categories. Eighty-three percent of respondents are looking for cheaper alternatives to the products they usually buy in at least one category. The top three categories respondents are trading down in are packaged food (53%), common household products (52%), and frozen food (42%).

Dunnhumby says e-commerce channel penetration has also decreased since peak COVID-19, and appears to be linked to customers’ increasing sensitivity to cost. Between October 2021 and July 2022, there has been approximately a 20% increase in surveyed consumers citing additional fees (e.g. delivery and picking fees) as a barrier to buying groceries online.

[Read more: Online grocery shoppers have unique habits]

Other notable findings include:

• Respondents believe that food-at-home inflation has hit 22.8%, 9.7 points higher than the most recent 13.1% annual rate reported by the U.S. Bureau of Labor Statistics.
• Sixty-four percent of respondents report they would have difficulty covering an unexpected expense of $400 or more, compared to 60% in April-May 2022. The study found a wide range of financial insecurity by state, with a low of 42% in Wisconsin, followed by 48% in Maryland and 52% in Washington, to a high of 77% in Louisiana and Oklahoma.
• Fifty-five percent of consumers surveyed report they are not getting enough of the food they want to eat, and 18% are not getting enough to eat. In addition, 31% of households have skipped or reduced the size of their meals in the last 12 months because there wasn’t enough food, a 5% increase since May-June 2022.
• The purchase of premium or luxury items are on the rise, particularly in the 35-44 age range. According to Dunnhumby, this trend aligns with the “lipstick effect” that has been observed in previous recessions, where consumers will invest in small luxuries during periods of uncertainty. Dunnhumby expects customers to focus on small luxuries available at a grocery store.

“While there are signs in parts of the economy that inflation may be dampening, that has not occurred yet for food,” said Grant Steadman, president for North America at Dunnhumby. “Retailers and manufacturers need to ensure that they are putting their customers first when they are making decisions about how to respond to persistent inflationary cost pressures.”

The most recent wave of the Consumer Trends Tracker includes an online survey of 2,000 U.S. shoppers that was conducted in July 2022.