Consumers Tap Reserves and Charity to Manage Inflation
PYMNTS | ·
American consumer spending remains undaunted by inflation, though it is requiring people to grow more resourceful. That’s according to a report Saturday (Oct. 3) by Bloomberg News, which said these resources include accessing their home equity, using food banks to save money for other purchases, or turning to ChatGPT for help in shrinking their grocery […] The post Consumers Tap Reserves and Charity to Manage Inflation appeared first on PYMNTS.com .
American consumer spending remains undaunted by inflation, though it is requiring people to grow more resourceful.
That’s according to a report Saturday (Oct. 3) by Bloomberg News, which said these resources include accessing their home equity, using food banks to save money for other purchases, or turning to ChatGPT for help in shrinking their grocery bills.
These are things Tom Barkin , president of the Federal Reserve Bank of Richmond , has seen when reviewing company earnings reports and when speaking to businesses and people around his district, the report added.
“As things get a little tighter, as prices go up and challenge wage growth , people do want to maintain their lifestyle,” Barkin said in an interview with Bloomberg. “I’ve just been taken by the resourcefulness of the consumer.”
As the report noted, consumption increased at its fastest pace in more than a year in August, with new government data showing upticks in categories such as cars, clothing and restaurants.
This is happening as the U.S. deals with its sixth year of inflation, with grocery prices up 32% since the beginning of 2020 and the cost of a pound of ground beef now at a record average of $7.16, the report said.
Against this backdrop, consumers like Kenny Marbry are turning to AI for their grocery shopping. He told Bloomberg that letting ChatGPT compare prices at different stores is saving him an estimated $100 per month, while also instituting some spending discipline.
“I’m much more likely now to look at a price and ask myself, ‘Do I really need to buy this? Can I get it somewhere else cheaper? Or can I make it myself?’” he said. “Those small decisions add up, especially when you’re feeding a family of five and trying to make every dollar stretch.”
Meanwhile, recent PYMNTS Intelligence research shows that household budget pressure doesn’t always mean smaller purchases. As covered here last week, consumers facing cash shortages are instead shopping differently, “with greater use of online grocery channels and stronger preferences for certain merchants.”
According to the report “The New Checkout: Crimped Consumers Lean Into Online Retail and Digital Wallets,” consumers under high financial stress were 6 percentage points more likely than those dealing with low stress to have made their most recent grocery purchase online, 16% compared to 10%.
“Online shopping can function like a calculator beside the grocery cart, helping shoppers track the total as they add items,” PYMNTS wrote, adding that the research “suggests digital discounts and convenience may also explain the difference, although financial strain doesn’t increase online shopping overall.”
The post Consumers Tap Reserves and Charity to Manage Inflation appeared first on PYMNTS.com .