Inflation Is Changing Purchasing Behavior For Majority Of Consumers, Numerator Reports
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.
CHICAGO, July 20, 2021 /PRNewswire/ -- Numerator, a data and tech company serving the market research space, 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
- Over 90% of consumers plan to change shopping behaviors with price increases (92% plan to change with SLIGHT price increases; 95% with SIGNIFICANT price increases)
- The top three strategies for managing an inflationary environment (in order) are: switching to lower priced brands; pursuing promotions and discounts; and cutting back on discretionary spend
- 49% of consumers plan to switch to lower priced brands with slight inflation, 60% plan to switch with significant inflation
- 45% will seek out additional discounts and promotions with slight inflation, 50% with significant inflation
- 36% plan to cut discretionary spend with slight inflation, 49% with significant inflation
- Cutting back on discretionary spending sees the biggest jump (36% to 49%) when consumers plan for slight versus significant inflation
- Inflation management strategies vary based on consumer purchasing power. When comparing across purchasing power groups:
- Low purchasing power consumers are most likely to switch to lower priced brands, but less likely to switch to store brand or to cut back on discretionary spend
- Medium purchasing power consumers are the least likely to change behaviors overall but the most likely to switch to lower priced retailers
- High purchasing power consumers are the least likely to switch to lower priced brands
|
% of Shoppers Responding: How would behavior shift with slight / significant increase in prices |
Slight Inflation |
Significant Inflation |
|
Switch to lower priced brands |
49% |
60% |
|
Seek out additional discounts and promotions |
45% |
50% |
|
Cut back on discretionary / non-essential spending |
36% |
49% |
|
Purchase more store brand products |
35% |
40% |
|
Switch to lower priced retailers |
35% |
42% |
|
Purchase items in bulk |
27% |
34% |
|
Purchase fewer premium products |
22% |
28% |
|
Would not change behavior |
8% |
5% |
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
About Numerator
Numerator is a data and tech company bringing speed and scale to market research. Headquartered in Chicago, IL, Numerator has more than 2,400 employees worldwide. The company blends proprietary data with advanced technology to create unique insights for the market research industry that has been slow to change. The majority of Fortune 100 companies are Numerator clients.
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SOURCE Numerator
