Market research firm Numerator has released a new study to understand the impact of inflation on recent and upcoming shopping behavior, specifically which groups are likely to adjust behavior and where spending reductions are likely to take place. With inflation up 5.4% in June vs. prior year, the highest mark since the 2008 crisis, there is substantial fear among consumers that inflation will continue and prices of their everyday groceries, services, and other goods will continue to rise.
"Over half of consumers have already changed purchasing behaviors in today's inflationary environment. Forward-thinking brands and retailers move at the speed of consumers so the time-to-insight is critical," said Eric Belcher, CEO, Numerator.
A sentiment survey of 600 consumers conducted in June/July shows the following key findings:
CONSUMER AWARENESS OF INFLATION
- 4 in 5 (83%) of those surveyed said they noticed price increases on their commonly purchased groceries or household essentials in June & July
- Two-thirds of consumers (66%) expect prices of groceries & HH essentials to further increase in the next 6 months -- 50% expect a slight increase, and 16% expect a significant increase in price
- Those expectations translate into concern. Over half (54%) of consumers are moderately or significantly concerned about future price increases, with low purchasing power consumers 1.7x more likely to say they were extremely concerned than consumers with high purchasing power (39% vs. 23%)
CONSUMER RESPONSE TO INFLATION
- Over half of consumers (55%) said they had changed their shopping behavior due to price increases in the past month
CONSUMER SPEND REDUCTIONS
- Bars and Restaurants are the most popular choice for discretionary spending cuts regardless of purchasing power. 74% of consumers plan reductions in Bar and Restaurant spend with further inflation.
- High purchasing power consumers are more likely to reduce spend on Apparel than medium and lower purchasing power consumers
- Low purchasing power consumers are significantly more likely to cut from Travel and Electronics budgets as well as Other non-essential spend.