According to a Numerator study, New Realities & Routines, 95% of consumers report that inflation has impacted their finances, but the impact is four-fold greater for households identified as struggling.
The study supports an observed impact of the current inflationary environment, that it is hitting various income groups differently, and, due to its nature, is pressuring low-income shoppers more than others. Among categories in the study, Home & Garden was subject to the greatest cutback in spending year over year among all groups, followed by Electronics & Tools and Home Improvement. Apparel indexed somewhat higher year over year with the highest purchasing, indexing at 136, among consumers identified as struggling with higher purchasing power, who are cutting back the most on Home & Garden and Electronics spending. Those identified as struggling but having low purchasing power indexed lowest on apparel purchasing at 89 versus the first fiscal quarter of 2021, slightly less negative on Home & Garden and several points less negative on Electronics purchasing, although in both categories they indexed below 100 and so behind in the period in the year past.
In addition, Numerator found:
- 40% of consumers expect inflation’s impact to worsen over the next few months, jumping to 69% of consumers in struggling households
- 95% of households are taking steps to combat rising prices, including searching for coupons and promotions, at half, and stocking up on sale items, a tick higher at 51%
- 51% of households with more financial flexibility are stocking up on sales items but the main reaction to inflation from struggling households is cutting back on non-essential spending, at 66%.
- 59% of consumers reported dining out less as they reconsidered routines due to inflation while 57% have cut back on non-essential foods, 54% skipped apparel purchases, 48% omitted recreational activities and 42% passed on travel plans.
Despite all that, the Numerator study demonstrated, 55% of all consumers report a somewhat or very positive outlook on the future. Major concerns for consumers looking forward are world events, at 22%, ability to make ends meet, at 20%, and family issues, at 15%. Struggling households are primarily worried about making ends meet, with the concern 7.5 times higher than for other households, Numerator reported.