STATE OF THE U.S CONSUMER
RECESSION MINDSETS, DECLINED CONFIDENCE, AND CHANGED BEHAVIOR
By: Michael Barbara, PhD
By: Michael Barbara, PhD
U.S. consumers do not feel great about the economy. Consumer confidence is declining among Americans as they face compounding economic and personal challenges-from rising food prices and gas prices and economic downturns to the threat of COVID-19 resurgences.
Inflation has Americans digging deeper in their wallets every month to pay for essentials. At the grocery store, they’re buying less yet spending more to get it; during the 26-week period ending September 17, CPG dollar sales grew 7.5 % compared to the previous year, fueled by rising prices that resulted in soft unit sales (-2.5 %). At the gas pump, consumers are spending upwards of $95 more a month per vehicle.
Against this stressful economic backdrop, 97 % of consumers reported some level of concern over rising prices on everyday items, with 45 % identifying as “extremely concerned.” When Americans were asked about their concerns in June 2022, four out of the top five concerns were related to inflation and rising prices, outranking global challenges such as climate change and environmentalism.
As their spending power decreases, 81 % of consumers report changing the way they shop to manage expenses, and a growing number now identify as “not impacted financially, yet cautious with spending.” This percentage is up from 33 % in December 2021 to 42 % in June 2022. Many Americans are bracing themselves for more disruption in the second half of 2022—53 % think the U.S. is already in a recession and most agree that disruptions related to COVID-19 and rising prices will last beyond 2022.
Given their fears about recession and expectations of more long-term disruption, over half (52 %) of the consumers surveyed by Clicksuasion Labs reported feeling less secure in terms of economic stability than they did six months prior; 25 % felt less secure in their household income level, and 29 % felt less secure in their ability to meet daily expenses.
Less than 15 % felt more secure in these areas. To offset growing insecurity, U.S. consumers are using different cost-saving strategies that will inevitably alter the landscape in the grocery, food service, and entertainment industries. To manage high gas prices, roughly one-third (34 %) of consumers surveyed are driving less, while up to 25 % are shopping online or closer to home.
Many consumers (42 %) plan to reduce out-of-home spending and increase grocery spending in the future. At the grocery store, U.S. consumers report that they’re already using as many as four strategies on average to save money, including stocking up when items are on sale, using coupons, seeking out stores with lower prices, and buying store brands.
Researchers could expect these cost-saving strategies to carry into the second half of the year as consumers reduce spending at the grocery store. However, if Americans continue to struggle on multiple fronts, the list could evolve, from trading down or out of certain categories to visiting food banks and buying less food.