The Wall Street Journal reports that a new Morning Consult poll suggests that “Americans are cutting back on many everyday purchases amid inflation, while splurging on a few big-ticket items. Think shopping for staples at the dollar store dressed in Gucci sneakers.
“Welcome to the split-brain budget.”
According to the story, “Economists call this an attempt to reclaim agency over their finances. Some shoppers are splurging occasionally to remind themselves that they still lead a good life, economists say.”
The Journal goes on: “A slowdown in economic growth and still-high inflation are fueling these types of spending decisions that feel good, even if they’re not especially budget-friendly, says Michael Liersch, head of advice and planning at Wells Fargo.
“It’s a phenomenon similar to staying up late to reclaim hours in the day lost to work and chores, behavior known as revenge bedtime procrastination. Call it revenge inflation spending.”
This makes me wonder if, while we’re going to see a lot of market share growth among price-oriented retailers, we’re also going to see stability at specialty food retailers what offer small and affordable luxuries. Think retailers like Dorothy Lane Market, Bristol Farms, Metropolitan Markets, Westborn Markets, Lunds & Byerlys – grocers who embrace their food-centric roots, who educate their shoppers, who offer both inspiration and aspiration in a way that is key to their value proposition.
I think these sort of retailers are going to be conscious of economic realities, but also will find ways to help consumers reward themselves with the food luxuries that will make them feel good.
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