Shoppers Dig Into Their Savings to Afford Essentials, Not Nice-to-Haves
Among consumers who expect to have to dip into their savings this year, most expect to do so to afford items and services they need, rather than to treat themselves to nonessential purchases. By the Numbers “The Pessimism About Pay Rises Offsets the Effect of Falling Inflation” installment of the PYMNTS Intelligence “New Reality Check: The Paycheck-to-Paycheck Report” series […]
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Among consumers who expect to have to dip into their savings this year, most expect to do so to afford items and services they need, rather than to treat themselves to nonessential purchases.
By the Numbers
“The Pessimism About Pay Rises Offsets the Effect of Falling Inflation” installment of the PYMNTS Intelligence “New Reality Check: The Paycheck-to-Paycheck Report” series drew from a survey of more than 4,000 U.S. consumers in December to examine their financial lifestyles and better understand their economic outlook.
The study revealed that among the 13% of consumers who expect their savings to decrease this year, most expect to spend this money on essential expenses, with only 30% saying they would spend their savings on discretionary expenses.
The Data in Context
Consumers across income brackets are being thoughtful about their discretionary spending, with many cutting down on nonessential purchases in response to ongoing inflation.
Retailers are noting this pullback.
“Ongoing uncertainty in today’s macroeconomic and geopolitical environment, including prolonged inflation, continue to squeeze our low- to moderate-income customers’ purchasing power,” Ross Stores Executive Vice President and Chief Financial Officer Adam Orvos said during a call with analysts Thursday (May 23).
Similarly, Macy’s Chairman and CEO Tony Spring noted on the company’s latest earnings call Tuesday (May 21) that the retailer’s customers continue to feel financial pressure, prompting them to “carefully scrutinize their discretionary purchases.”
Even high earners are not immune.
“We’re certainly seeing at the high end, the Bloomingdale’s consumer is interested in purchasing, but she’s being very thoughtful in the category she’s purchasing in,” Spring said, specifying that luxury handbag and shoe sales have been softer, but high-income shoppers are springing for advance contemporary products, beauty items and home goods.
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The post Shoppers Dig Into Their Savings to Afford Essentials, Not Nice-to-Haves appeared first on PYMNTS.com.