With inflation persisting, consumers are spending more on necessities and experiences.
That’s according to the latest edition of Mastercard’s monthly SpendingPulse, released Thursday (April 6), which showed retail sales up 4.7%, a figure that reflects “nominal spending” and isn’t adjusted for inflation, which is now at 6.04%.
The report showed eCommerce sales up 13% year over year, with in-store sales up 2.8%. The key drivers for the month’s growth were lodging (23.5%), restaurants (11.6%) and grocery sales (5.6%). Other categories saw declines, such as home improvement, furniture and electronics.
“There are a number of factors influencing how today’s consumer is shopping including inflation, the labor market, food and gas prices, and the path of interest rates,” Steve Sadove, senior advisor for Mastercard, said in a news release.
“But they’re still spending — we’re seeing varied growth sector by sector, with purchases largely shifting to necessities and experiences.”
Recent research by PYMNTS has shown that this shift to focusing on necessity has lowered brand loyalty among consumers.
PYMNTS data finds that around 50% of consumers have changed where they shop during their search for pricing relief, while approximately two-thirds of consumers consider price when deciding on a go-to large retailer.
Half of the shoppers we interviewed said finding a better deal has become a much more important factor than it once was when picking a place to buy retail or grocery items, with 44% of grocery and retail consumers saying they would opt for a different brand if it cost less than their favorite product.
And around 50% of the shoppers in each segment surveyed have moved to cheaper merchants in response to price increases. A respective 56% retail shoppers and 47% of grocery shoppers tell PYMNTS they have switched some of their spending to less expensive brands.
Among 18% of retail and 21% of grocery shoppers, changing brands has become the chief way they try to blunt the impact of rising prices on their budgets.
Still, most shoppers say they are still under economic pressure. PYMNTS data finds that 61% of consumers feel high levels of anxiety about the near-future economy, while 57% say they anticipate an imminent recession.