Inflation continues to pressure the housewares business, but inflation’s effect on discretionary spending and the consumer pessimism it generated may be fading, Peter Greene, practice director-GM of market research company Numerator, said during an Innovation Theater session at The Inspired Home Show 2023.
“This is great news for our industry,” Greene said.
Still, inflation has impacted a consumer mindset that continues to weigh against purchasing in the home product sector at least for the moment, Greene noted.
This year, 28% of consumers, particularly older, lower-income and rural consumers, said they were worse off than a year ago, according to Numerator market research. Meanwhile, 23% said they were better off, with that group overrepresented by high-income consumers and younger shoppers who have their best earning years in front of them. Consumers across the board are making fewer shopping trips to housewares-focused stores, Greene noted.
How inflation affects the market is both direct and incremental, and the result of non-discretionary spending affects housewares in both ways. Non-discretionary product price gains in categories such as pet products and grocery have significantly pressured discretionary categories. Overall, the effect on disposable income resulted in 40% of consumers trading down when they did purchase household products, Greene said.
Still, he pointed out, consumers intend to watch for sales and discounts when it comes to discretionary spending, so the pressure to promote housewares will remain, Greene noted. Balancing that, he added, consumers aren’t looking for the cheapest items available. They want quality and will weigh prices available for the grade of product they want.
Greene advised housewares suppliers and retailers to pay close attention to single-person households populated by younger consumers, as they are going to drive sales growth this year. Market-entry households will generate 30% of housewares spend in 2023, he said.