Consumers bought 6% fewer items at retail in the first quarter of 2022 than the same period last year. Though average selling prices for the products are up 10%, a decline in demand translated to average amount spent decreasing around 2%. A 5% drop in purchase frequency is further exacerbating the situation.
In a separate survey in February, NPD reported that 89% of consumers had noticed price increases during the past three months vs. a year ago. The top categories that consumers noticed increases included food (87%), gas (77%), dining (55%), apparel (46%), and home goods (41%).
What Consumers Want
Today’s consumers do intend to look for more promotions, according to NPD, as well as lower-priced items. They also plan to trim back on overall purchases during the next three to six months.
Just 17% said they’re not planning on making any changes to their spending behavior, while 23% said they intend to cut back. Looking for promotions was the most popular response, cited by 28% of consumers.
Consumers aged 55 or older are the most likely to be planning changes to their spending behavior, an NPD spokesperson told CGT, noting that there’s little variation between men and women, and income groups.
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Nearly 70% of consumers also indicated that labor shortages have caused reactive changes to their purchases in the past six months, including visiting a different retailer or skipping the purchase entirely.
“Marketers must be well versed in all the conditions influencing their retail channel, and their target consumer, or they will risk missing growth opportunities,” Cohen said. “An appealing shopping environment, displays that make the product pop, and persuasive promotions are necessary to get more items into the basket when consumers do shop.”
This article is an excerpt from sister publication CGT. Click here for the full version.