The rules of retailing are being rewritten as hope fades that inflation will subside any time soon, or that supply chain disruptions are easing. These ongoing challenges have retailers scrambling daily to reinvent how they operate as conditions seem to lurch from quarter to quarter even affecting those previously able to avoid like Amazon’s financial performance announcement today.
For example, in spite of inflation raging at a four-decade high, consumers indulged themselves in the first quarter, according to major credit card issuers. Their latest reports show surges of up to 33% over a year earlier, driven by travel, entertainment, and dining.
But a fresh consumer survey by First Insight suggests conditions may be rapidly deteriorating.
More than 40% of consumers now say that due to rising prices they expect to be cutting back on dining out. A third plan to cut back on entertainment, and 30% expect to spend less on vacations and travel. More than a quarter mentioned cutting back on premium and organic groceries and on fast fashion, a back-to-basics trend that’s already benefitting private label goods.