Inflation is at a 40-year high and consumers have less confidence to spend than in recent memory, according to a new First Insight report, The State of Consumer Spending: Inflation Impacting Consumer Confidence. The report revealed that 97 percent of consumers are reprioritizing how they spend.
Leading the discretionary expenditures cuts, dining out ranked highest with 42 percent of consumers reducing their restaurant spend. Logically, grocery remains the highest priority; however, grocery is not immune. Eighty-seven percent of respondents say that they are cutting back on groceries, and 41 percent said that they will save money by cutting back on purchasing name-brand products. Twenty percent will cut back on produce while 26 percent will buy fewer organic products.
Inflation is also affecting the way consumers shop, with 42 percent saying that they are now shopping for deals, i.e. sales. Forty percent are now staying within a budget, 28 percent say they are buying less overall, 25 percent are shopping more online and 25 percent are shopping bulk stores or using warehouse retailers. Overall, 82 percent of consumers are searching for less expensive ways to shop due to inflation.