More Than 90% of Consumers Plan to Change Spending As Prices Continue to Climb

With inflation continuing to climb — consumer prices in June were up 5.4% year over year, the highest such increase since the Great Recession in 2008 — how is spending being impacted?

A new survey from Numerator, a Chicago-based market research company, reveals that 55% of consumers report they’ve shifted their shopping behavior because of price increases in the past month. Of note, nearly all consumers intend to make changes to these behaviors.

Most consumers at least somewhat worried about rising prices

More than half (54%) of U.S. shoppers are somewhat or very worried about future upticks in prices.

The survey — drilling deeper — separated respondents into purchase power groups based on their income level, household size and cost of living. Here’s a further breakdown:

• Low purchase power: Bottom 30%
• Medium purchase power: Middle 40%
• High purchase power: Top 30%

Consumers with low purchase power are 1.7 times more inclined to be extremely concerned. However, concerns among consumers with both low and high purchase power dipped slightly between June and July.

Meanwhile, consumers with medium purchase power show the largest increase in concern over rising prices.

Slight price increases make a difference

As prices continue to rise, more than 90% of American consumers intend to make changes to their shopping behaviors to save. Whether there’s slight or significant increases matter, as 92% plan to shift spending behavior should there be a slight price bump, while 95% intend to make changes with a significant price increase.

The top tactics for dealing with inflation?

• Switching to brands with lower prices: Nearly half (49%) of shoppers intend to switch to less expensive brands, while 60% would switch should there be significant inflation.
• Going for discounts and promos: With minor inflation, 45% plan to switch to brands with lower price tags, while 50% would make the switch with significant inflation.
• Cutting back on nonessentials: More than 1 in 3 consumers (36%) would cut back on nonessentials with slight inflation, while nearly half (49%) would do so with significant inflation.

Other money-saving tactics shoppers intend to employ to combat rising prices include buying more store-brand products, switching to lower-priced retailers and buying fewer premium products. Here’s a full breakdown:

To cut back on spending, regardless of how much purchasing power someone has, many consumers plan to cut back on spending at bars and restaurants. Across the board, 74% of shoppers plan on reducing spending in this category.

Among nonessential spending categories, the higher purchase-power set (remember: top 30%) are most likely to drop their spending on:

• Bars and restaurants (74%)
• Entertainment (63%)
• Apparel (60%)
• Electronics (43%)
• Travel (38%)

Lower-purchase-power consumers (remember: bottom 30%) would be most inclined to lower spending on:

• Bars and restaurants (76%)
• Entertainment (60%)
• Travel (57%)
• Apparel (56%)
• Electronics (56%)

If you have concerns about keeping your discretionary spending in check, consider these budgeting methods, among others:

• Cash envelope system: Put money into envelopes based on certain budget categories
• Zero-sum budget: Every dollar is assigned a task
• 50/30/20 rule: Half of your take-home pay goes toward “needs,” 30% goes toward “wants” and 20% goes toward savings

When using a credit card for nonessential purchases, set an alert to keep track of your spending. To keep your credit score in good shape, make sure to always make the minimum monthly payment and keep your credit utilization ratio low.

Methodology: Numerator conducted an online survey, fielded June 9 and July 9, 2021, of more than 600 respondents ages 18 and older.