Handing down a couple of headline-grabbing decisions, the U.S. Supreme Court managed to push media preoccupation with inflation and the possibility of a recession off the front page. Addressing these challenges might have moved to higher-numbered pages, but they are bugaboos that are not going away and will in due course once again command our close attention.
Whether we are heading for a recession or are already in one, we’ll know soon enough. In the meantime, taking a measure of consumer attitudes can go a long way to paint a picture of what the future holds. Every month, Prosper Insights & Analytics surveys more than 7,500 adult U.S. consumers to determine their spending intentions and retail behavior.
Prosper’s just-released survey for June shows that consumers are acutely aware of price increases for groceries, gasoline, utilities, rent, and Internet service as well as non-essentials like travel, and dining out. The most noticeable price increases, cited by 74.4 percent of those surveyed, were those for gas.
Rising gas prices have impacted consumer spending. The survey finds that 44.2 percent of respondents plan to drive less because of the cost of gas. Those higher gas prices even led to 21.4 percent of respondents spending less on groceries in June. Other spending adjustments include decreased vacation travel, reduced dining out, delayed major purchases, and increased carpooling.
Of those surveyed, 37.7 percent plan on taking fewer shopping trips, and for 35.3 percent those trips will be closer to home. Some will not be leaving home at all, opting for online shopping instead. There will, however, be more shopping for sales, buying store-brand or generic products, using coupons more, doing comparative shopping, taking public transportation more, and deferring auto maintenance.
Nevertheless, a sizable 25.9 percent said that fluctuating gas prices had no major impact on their spending. This compares to 51.1 percent who said so one year ago.
Considering the foregoing, it’s not surprising that consumer confidence has suffered some. In the current survey, 30.1 percent of respondents were confident or very confident in the economy compared to 32.2 percent who felt that way last month and 52.6 percent who felt likewise one year ago. To provide some perspective: Prosper reports that consumer confidence was increasing steadily over the last two years, dropped significantly when the pandemic began, started moving up again February 2021, but in August saw the start of a steady downturn.
And still COVID-19 will not let go. Nearly half of responding consumers (47.3 percent) are extremely concerned or very concerned about the virus, up slightly from the 45.2 percent who expressed such concern one month ago. This, too, impacts consumer behavior: 31.3 percent were shopping more online in June compared to 28.9 percent who did so the previous month.
As to the likelihood of a recession rearing its ugly head, Pamela Danziger, president of Unity Marketing, reports in a post on her firm’s website that a survey among 750 CEOs conducted by The Conference Board in May found that more than 60 percent expected a recession in their primary region of operations before the end of 2023 — 15 precent considered their region to already be in a recession.
In these uncertain times, it is more important than ever to show customers that you value their business. With consumer confidence being somewhat wobbly, it may be advisable to redouble efforts in this regard. It couldn’t hurt to expand subscriptions to your unlimited wash club, and, while you’re at it, coddle the members you already have.