The Great Cutback: Most Consumers Are Reducing Their Spending


The Great Cutback: Most Consumers Are Reducing Their Spending



by , Columnist, December 29, 2022

Consumers are adhering to their guilty pleasures — even as they worry about inflation and other threats to their finances.


For instance, some people are continuing their consumption of cigarettes/vaping, alcohol and marijuana, according to Jungle Scout’s Consumer Trends Report Q4 2022.


Despite these patterns, 83% say rising inflation has affected their spending, and 69% are concerned about their finances, while 51% say they have unstable household income.


Consumers are reducing their spending in several areas:



  • Dining out at restaurants/bars — 51% 
  • Fun/impulse purchases — 47% 
  • In-person entertainment (movies, concerts, etc.) — 44% 
  • Clothing accessories — 44% 
  • Leisure travel — 40%
  • Personal care services (hair/nail salons, spas, etc.) — 35%
  • Streaming entertainment subscriptions (Netflix, iTunes, Audible, etc.) — 34%
  • Home improvement/decorating — 34% 
  • Holiday-related expenses — 33% 
  • Groceries — 33%
  • Subscription services — (meal kits, food delivery, etc.) — 33% 

However, the study also shows that many people are least likely to reduce spending on dining out, self/personal care, TV/music streaming services and comfort foods/drinks.


Inflation is by far the biggest economic concern at the moment: 



  • Inflation — 55% 
  • Gasoline prices — 46%
  • Housing prices — 26% 
  • Interest rates — 26% 
  • Signals and/or talk of a recession — 24% 
  • Healthcare costs — 23%
  • The continuation of the COVID-19 pandemic — 23%
  • Ongoing impact of the war between Russia and Ukraine — 21% 
  • Job security/layoffs — 18%
  • New/future transmissible viruses (Monkeypox, etc.) — 14%

In Q4, 29% enjoyed increased household income while 52% stayed the same. 


The holiday season has gotten underway since this survey was fielded. But consumers planned to spend on these gift options: 



  • Physical products — 59% 
  • Gift cards — 49% 
  • Virtual products — 29% 
  • Subscription-box services — 23% 
  • Homemade/DIY gifts — 21%
  • Experiences — 17% 

Still, they expected to cut back in these areas: 



  • Holiday gifts —59% 
  • Holiday decorations — 20% 
  • Holiday entertainment — 9% 
  • Clothes/accessories for events — 3%

Of the millennials polled, 26% got gift ideas from social media, compared with 23% of Gen Z, 8% of Gen X and 7% of Boomers.


There are at least a few signs that people are recovering from the pandemic. For one, mental health and well-being has fallen to third among priorities—last year, it was second. Physlical health has gone from third to second. And dealing with finances has jumped two slots to fourth.  


Scoff if you must, but 57% of Americans are making New Year’s resolutions for 2023. They include:



  • Reevaluate finances—79% 
  • Have more fun–78% 
  • Work on themselves more–75%  
  • Spend more time with family–73%
  • Work harder–64%
  • Travel more—54%  
  • Change jobs—45% 

Finally, here’s one other sign of hope: Cat treats and toys and “things for my spoiled dog” are among the items people are most likely to cut back on.  


Jungle Scout surveyed 1,008 U.S. consumers on Oct. 14, 2022.  The full report can be accessed here. 


Consumers are concerned about inflation and other threats, but are still enjoying their guilty pleasures, Jungle Scout reports.

 

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