If Inflation Is So Scary, Why Are Consumers Still Spending?

Featured Image

Just as the pandemic seemed to be receding as an imminent threat to us all, there comes a new boogeyman — inflation. That was the headline finding in a Pew Research survey conducted late last month: 93% of respondents rated inflation a “very big” or “moderately big” problem. And it’s changing their behavior.

Of 1,000 US adults polled in a recent survey by First Insight, 97% reported that high inflation is now a factor in their financial planning. Three out of four said their spending is now focused more on essentials and healthcare.

Far and away, inflation is what Americans are most worried about, and what keeps retailers up at night.

Yes, prices are up for fuel, food, housing, and autos, but the media has also been relentlessly beating the drums of doom. Worst inflation in generations! Only going to get worse!

Perhaps. But for now, I’ve been wondering why consumers are still shopping, filling parking lots, and booking vacations.

We may all be nervous, but Bank of AmericaBAC reported that April debit and credit card spending across all income brackets was 13% higher than a year ago. More significantly, the bank said card spending per household was 24% higher than three years earlier, in pre-pandemic 2019.

Another indicator the industry watches is visit counts at malls and shopping centers. Placer.ai, which crunches data on foot traffic, reports that indoor malls, open-air lifestyle centers, and outlet malls have been rebounding. The company recorded the biggest increase at outlet malls, where April visits surged 31.6% over March. Placer said visits to indoor malls were up 17.4% from March, and almost even with 2019.

READ THE FULL ARTICLEat Forbes (subscription required) or download below. 

 

consumer spending  inflation

download the full article