Retailers Pull Back as Shoppers Tighten Wallets

Shoppers are showing the power of the pocketbook by rebuffing efforts by some apparel retailers and department stores to raise their prices as inflation continues at its highest level since the 1980s, and consumers scale back on the spending that had been on the rise for several months.

Macy’s recently tried to raise prices on some mattresses and sofas by $100, but shoppers pushed back, Chief Executive Jeff Gennette told The Wall Street Journal for its report Thursday (March 17). Clothing brand Bella Dahl, meanwhile, raised prices on its T-shirts by about $20, then watched sales fall off before they reverted to the original price.

“There was a revolt,” Chief Brand Officer Steven Millman said. “If we go any higher, we’ll do half the sales.”

U.S. retail sales slowed in February, according to the Commerce Department, even though the percentages say they were up 17.7%, since most of that increase is because things now cost more than they did in the past. That’s especially true with gas and food.

When it comes to apparel, shoppers are showing “some trading down with more shoppers turning to value players for some of their purchases,” Neil Saunders, managing director at retail research firm GlobalData, said. “This is likely in response to squeezed budgets.”

About 43% of consumers surveyed by market research firm NPD Group in February said that if prices continue to rise, they will delay less-important purchases to stick to a budget.

Related: Inflation Inflicts Damage as Even High Earners Find it Tough to Make Ends Meet

The seventh edition of the “New Reality Check: The Paycheck-To-Paycheck Report,” a PYMNTS and LendingClub collaboration, examines “The Wealth Divide” and explores the dynamics around the cost of living, challenging notions of who’s really prospering.

PYMNTS research showed that the share of consumers earning $100,000 or more and living paycheck to paycheck grew 6% from December to January. In January, 64% of all Americans reported living paycheck to paycheck, including 48% of consumers earning more than $100,000 per year.