Nearly all Americans cut spending amid inflation: CNBC survey
A woman looks for products in a department store on January 26, 2023 in New York City. US gross domestic product increased at an annual rate of 2.9% in the fourth quarter of 2022.
Nearly all Americans are cutting back on their spending in some way, according to a new CNBC and Morning Consult survey.
The survey found 92% of Americans are pulling back, further evidence of what retailers like Walmart , Target , Home Depot and Best Buy called out as cautious consumer spending shifts during the first quarter.
Shoppers continue to report inflation squeezing their finances, with concerns particularly heightened among middle-income Americans. Of the survey respondents, 92% of middle-income Americans — or those who make between $50,000 and $100,000 a year — reported being "somewhat" or "very" worried about higher prices.
That's a higher proportion than those in low- and high-income groups, with 88% of each of those segments reporting feeling concerned about higher prices. One somewhat bright spot: That share of high-income households, represented by those earning $100,000 or more a year, represents an improvement from a year ago when 92% expressed concern around inflation, according to the survey.
Over the last six months, higher prices have led nearly 80% of consumers to cut spending on nonessential goods, like entertainment, home decor, clothing, appliances and more, the survey found.
Further, two-thirds of respondents reported spending less on essential items, like groceries, utilities and gas. In the grocery category, more than half of consumers said they're buying cheaper alternatives, like private label brands, or just generally buying less.
"Customers continue to seek value given the impact of inflation," Walmart CEO Doug McMillon said on the retailer's first-quarter earnings call. "Private-brand penetration is up about 110 basis points versus last year for Walmart U.S." A basis point is one-hundredth of a percentage point.
Spending at value-oriented grocery stores in May outpaced spending in the overall grocery segment, according to Bank of America aggregated credit and debit card spending data.
"We think this reflects trade down from higher incomes, in line with commentary from Grocery Outlet and Walmart," Bank of America Securities analyst Robert Ohmes said.
What's more, consumers don't expect to change spending habits for the remainder of the year.
Two-thirds of respondents to the CNBC and Morning Consult survey said they still plan on cutting spending on essential items over the next six months, and 77% plan to slash spending on non-discretionary goods, a percentage only slightly below those who said they have already cut back in that area.
The CNBC and Morning Consult survey was conducted online earlier this month and polled more than 4,400 adults.
Source: CNBC
