Prices drop by 1.7% online in March, according to a report
In 2022, consumers have been feeling the pinch of inflation, despite signs of cooling as indicated by the Consumer Price Index. This economic pressure has significantly impacted consumer spending habits, leading to notable changes in the way people shop.
According to surveys by Blackhawk Network, Dunnhumby Consumer Trends Tracker, and Adobe Digital Price Index, around 41% of shoppers reported that inflation was changing the way they shop. Many consumers responded by employing money-saving strategies such as buying cheaper brands and coupon-seeking (each about 20%).
During August through October 2022, only about 36% of consumers expected to spend as usual on higher-priced items, down from previous periods with fewer inflation concerns. The rest planned to reduce or stop spending on such items.
Consumers have also engaged in behavioural shifts like starting back-to-school shopping earlier to spread out expenses or to avoid anticipated price hikes due to inflation or tariffs.
Both lower- and higher-income households adjusted their buying habits. Lower-income shoppers focused on essentials and sought sales, while higher-income consumers started trading down to store or discount brands to stretch budgets.
These changes reflect a cautious approach to spending driven by inflation expectations and economic uncertainty, with many consumers still bracing for continued price increases even as inflation started moderating later.
In terms of specific product categories, furniture and bedding, electronics, toys, flowers and gifts, appliances, and home and garden products all saw price decreases in March 2022 compared to the previous year. Apparel prices, however, increased by 6.6%.
Grocery prices, on the other hand, rose by 10.3% in March compared to the previous year. However, according to the Adobe Price Index by Adobe Analytics, grocery price increases have begun to slow down from their September peak of 14.3% year over year. Online prices decreased by 1.7% in March compared to the previous year.
Interestingly, a Dunnhumby Consumer Trends Tracker survey revealed that consumers thought inflation was 24.3% in October and November 2022, much higher than the actual figure of 12%. This misperception highlights the ongoing impact of inflation on consumer sentiment.
Regarding grocery store profitability, survey respondents said they thought grocery stores were profiting 35.2%, far more than the exact figure of 2.5% at that time.
This trend of inflation continues to impact retailers and consumers, with the seventh consecutive month of year over year price declines across more than half of the categories tracked by Adobe. The adaptive response from consumers, characterised by early shopping, switching to lower-cost options, reducing discretionary spending, and greater use of money-saving methods, is expected to persist as inflation remains a significant factor in consumer decision-making.
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