D. Tighe
Research expert covering consumer behavior, sporting goods retail, and the global toy industry.
Impact of inflation on consumer behavior - Statistics & Facts
Due to supply issues caused by a number of factors, including increased consumer demand, Russia’s invasion of Ukraine, and the coronavirus (COVID-19) pandemic, inflation around the world had risen considerably. In other words, these events caused the cost of living to increase practically everywhere. Overall, the global rate of inflation was estimated at roughly 8.75 percent in 2022 compared to 2021 and at roughly seven percent in 2023 compared to 2022, which is a major spike in comparison to previous years analyzed.
Rising prices have consequences for several parties, one of the most important being the consumer.
In the United States, for example, these global financial concerns have caused many consumers to worry that they will not be able to afford day-to-day life. In fact, as much as a third of Gen X shoppers in the U.S. felt this way according to a survey conducted in February 2023. Although rising prices have not massively impacted everyone, there were few U.S. consumers who said the recent wave of inflation did not influence their financial situation at all.
What has gotten more expensive?
Compared to 12 months earlier, a range of products became more expensive in February 2023. Some examples of non-food items that have increased in price considerably (more than 10 percent) included tools, hardware, outdoor equipment, as well as housekeeping supplies. The current economic climate is causing a number of issues for consumers worldwide, from rising prices for everyday products to problems with product unavailability and delivery delays. Some of the areas that have gotten more expensive include typical consumer goods, such as groceries, but gas prices and housing costs have also shot up. According to a study fielded in April and May 2022, nearly 60 percent of millennials surveyed worldwide experienced financial hardship when filling up their cars. For the foreseeable future, people were expecting to spend more money than before for on all kinds of matters, from utility bills to vacation trips.Global consumer reception
Given the perceived and factual impact of recent rises in inflation, it is unsurprising that it was the leading concern among consumers worldwide as of January 2023. This has had a number of consequences: one consequence is that consumers are trying to be extra mindful of what they buy and how much they spend, as a rule only purchasing what they truly need. In 2022, a significant percentage of shoppers across the globe had started buying cheaper alternatives to the products they usually buy while also seeking out more coupons and/or discounts than they used to. Furthermore, people said they planned to minimize spending by traveling and dining out less.Inflation and its impact on the holidays
Towards the end of 2022, many were wondering how inflation might impact shopping and spending behavior during the holiday season. Whether it was to a small or substantial degree, nearly 60 percent of consumers surveyed in the United States and Canada stated that they intended to cut back on spending over Black Friday and Christmas. In other words, less than half of shoppers in these two countries did not plan to spend less than usual due to the rising cost of living. Day-to-day business has also gotten more costly for retailers, which is why many are devising strategies to minimize operating costs over the course of the holidays. One of the leading ways in which retailers around the world planned to keep costs down is by increasing the cost of shipping.
