Inflation Causing Consumers to Buy Less, Shop Less, Says NPD
Inflationary pressures are spurring more than eight in 10 U.S consumers to plan fewer retail purchases in the next three to six months, reported NPD. Though 2022 general merchandise retail revenue was up 2% year over year through mid-May and…
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was 22% above pre-COVID-19 pandemic levels in 2019, “consumers have already begun to make fewer purchases than a year ago,” said NPD. “These shifts in shopping behavior will have broader retail consequences.” Chief NPD Retail Industry Adviser Marshal Cohen cited a new “tug-of-war between the consumer’s desire to buy what they want and the need to make concessions based on the higher prices hitting their wallets.” Consumers aren’t just buying less, he said, they’re also shopping less, “which means a loss of the impulse-shopping moments that are critical to retail growth.” In the first three months of 2022, consumers bought 6% fewer items at retail than they did in 2021's Q1, said NPD. Despite a 10% increase in the average selling price of the products purchased, this decline in demand sent the average amount spent per buyer down more than 2% during the same period, it said: “The 5% drop in purchase frequency of U.S. buyers is further contributing to the slowing of retail sales.” A recent NPD survey found consumers plan to look for more promotions, seek generally less expensive items, or even cut back on purchases overall in the next three to six months. In addition to those “proactive spending changes,” nearly 70% of consumers said labor shortages have caused “reactive changes” to their purchase habits in the past six months, whether that meant going to a different retailer or eliminating the planned purchase altogether, said NPD.