Consumer Spending Remains Strong But Increasingly Price Sensitive

Shoppers are still spending at a robust rate, but with an ever-growing eye toward finding the best prices. That’s the basic conclusion of a just-released survey from ICSC that based its conclusions on two separate online consumer surveys in early May and late July that each drew responses from just over 1000 respondents.

“Consumers are placing greater emphasis on value, becoming more selective about where they spend and keeping a closer eye on their financial flexibility,” ICSC President and CEO Tom McGee said in a news release, ICSC.” At the same time, growing concern about job security suggests that income stability may be emerging as a bigger consideration than inflation alone. The result is a consumer who remains engaged and willing to spend, but is making purchasing decisions more carefully than ever.”

Some key findings from the survey:

Inflation is losing its grip on consumer behavior. While inflation remains the leading factor influencing spending decisions, consumers are less focused on rising prices than they were earlier this year.

Financial optimism persists, but job market concerns are growing.Consumers remain generally positive about their financial situations, but labor market anxiety is becoming more apparent.

Loyalty is becoming more fragile. Consumers have not stopped spending, but they are more willing to switch brands, retailers and products to find the best deal.

Consumers are still making discretionary purchases. Despite ongoing financial pressures, consumers continue to make room for nonessential purchases, provided they offer clear value, utility or personal reward.

The ICSC is a membership organization serving the commercial real estate and retail industries. Click here for more from its survey.