Consumers Turn to Discounts or Do Without as Inflation Bears Down

Executives working with some of the biggest global companies say they’re seeing people becoming less willing to deal with price increases, The Wall Street Journal says.

That includes Marlboro maker Altria, which said cigarette smokers have been trading down in order to discount brands, with higher gas prices shrinking their disposable income.

There’s also falling demand for mattresses, according to Sleep Number and Tempur Sealy.

Meanwhile, 1-800-Flowers has said it thinks consumers have been spending less on things like bouquets because they’re worried about inflation.

The past few years of the pandemic have seen robust consumer spending, with many people getting pandemic stimulus pay and using the downtime to build up their savings. The U.S. job market has also been bolstered with a reduction in unemployment.

The report says companies that made various products, including baby wipes, washing machines and more, have raised prices without cutting into demand. But some have said Americans’ buying is being dampened by inflation, which hit a high of 40 years in March, with grocery and various other items being sought in discount form.

According to government data, people have been adding new purchases on travel and accommodations, with March being the second month where there was less spending on durable goods like automobiles and appliances.

PYMNTS wrote that consumer spending has been up 1.1% in March of this year, according to the Commerce Department recently.

See more: Consumer Spending Jumps 1.1% in March, Inflation Up 6.6% YoY

That spending boost was led by more cash spent on travel, dining, gasoline and food.

However there was less spending on durable goods for the second straight month, and fewer vehicle purchases.

There was more personal income by 0.5%, including wages and government assistance.

Kathy Bostjancic, chief U.S. economist with Oxford Economics, said customers will likely “continue to rotate more toward services spending,” though there were “obviously large headwinds” like inflation and supply chain problems facing the customers.