It is nearly impossible to avoid the narrative around the impacts of inflation on the economic outlook of the United States and the world at large. Whether it be gas prices, the cost of groceries, housing, travel or durable goods, the drumbeat continues. Anxieties around the economy are at levels not seen in over a decade, and this reveals itself clearly in the sharp decline in consumer confidence throughout 2022, as measured in Big Village’s twice-monthly economic tracking survey via our Online CARAVAN Omnibus Survey. As of early July, overall consumer sentiment has dropped 14 points compared to the beginning of 2022 (from 97 to 83), with our separate consumer expectations index dropping from 97 to 80. To make matters worse, with recent Federal Reserve policies intended at cooling the runaway economy, consumers now have a new concern, the dreaded economic recession. Returning to our polling from early July, 68% of American consumers are indeed concerned about a possible recession having an impact on their household in the next 6 months. It’s all enough to make your head spin!
While the factors that have caused the highest levels of inflation since the early 1980’s and when it will be resolved can be debated, one thing we can all agree on is just how much more it currently costs to live. After all, many of us still need to commute to work, want to go out to eat, take vacations, or go to sporting events and concerts. So, what needs to change to accommodate these basic necessities of living and simple pleasures we enjoy?
Situations like this often create a need for tradeoffs and cutbacks to household budgets, a resetting of goals and priorities when your dollar doesn’t go as far as it used to. Big Village has been measuring such changes in spending behavior since April and as recently as June through our Pulse of the American Consumer surveys. Specific examples from our June survey are listed below and will continue to be measured as the year moves forward. How many of these may apply to you and your household?
Since the start of 2022, which of the following have you done as a direct result of the increased cost of living Americans are currently experiencing?
78% of American adults have done at least one of the following:
- Purchased more lower-cost store brand/generic grocery items rather than the usual brands you use: 44%
- Stocked up on grocery items, fearing that prices will get even higher: 32%
- Cancelled plans for trips by car that weren’t absolutely necessary: 29%
- Cancelled specific plans to dine out or order takeout: 28%
- Postponed a short trip/getaway to have more funds on hand for everyday items: 26%
- Postponed the purchase of a discretionary item to have more funds on hand for everyday necessities: 26%
- Eating less/went on an unplanned diet: 20%
- Postponed the purchase of a major home appliance (washer/dryer, stove/oven, dishwasher, refrigerator): 17%
- Consumed more carbohydrate-focused meals than you prefer due to the increased costs of meats/proteins: 17%
- Adopted a far more plant-based diet due to the increased costs of meats/proteins: 9%
Since the start of 2022, which of the following subscriptions/services have you cancelled as a direct result of the increased cost of living brought on by inflation?
Likewise, 50% of American adults have cancelled at least one of the following:
- Any TV streaming service: 19%
- Amazon Prime: 15%
- Cable TV service: 13%
- Music/podcast apps: 11%
- Premium cable TV channels: 11%
- Gym/fitness club membership: 10%
- Online gaming services: 9%
- Any magazine subscriptions (either print or online): 9%
- Any fitness/health/wellness apps: 8%
- Meal delivery kits: 8%
- Clothing box subscriptions: 6%
- Credit or identity theft monitoring services: 5%
- Pet subscription box: 5%
- Warehouse club memberships: 5%
- Any massage/spa/tanning memberships: 5%
So where is the light at the end of the tunnel? It’s tough to say given the unprecedented times we are living in and how the pandemic has played into this current inflation crisis. Even in divided times, inflation seems to be one factor that all of us are experiencing together, and any sign of progress will be something to celebrate. In the meantime, my household has put tradeoffs in place and is considering more; I suspect that may apply to many of you readers as well. Stay tuned for an update on this story and statistics in mid-August when we collect a new round of data through Big Village’s Pulse of the American Consumer. Contact us today to learn more about this survey and how its insights can help inform your own business strategy heading into the fall and winter!
Written by Rich Tomasco, Vice President, Insights/CARAVAN Omnibus Surveys at Big Village.