Inflation is slowing, but do regular people agree?
The latest U.S. Consumer Price Index numbers show that the rate of inflation is slowing. Core prices have experienced their slowest increase in three years (WSJ coverage: gift link).
I wanted to see if these numbers aligned with consumers' perceptions and reactions, so I collaborated with Warren Wright of Second Wave Learning to survey Americans.
Overall impact:
83% of consumers say inflation has been very high over the past year.
66% report feeling a significant personal impact from inflation.
75% are actively trying to save money on overall household expenses all the time.
81% are consistently trying to save money on grocery purchases.
As a leading expert on generations, Warren wanted to break out results by generational cohort. Some notable differences showed up:
83-85% of Millennials and Gen Xers feel inflation is very high but only 67% say they are personally affected by it, a gap of 16-18 points, notably bigger than the same perception gap for Boomers (75% vs. 63%).
Despite feeling less personally impacted, Boomers are more inclined than Millennials to actively save money on overall expenses and groceries.
Millennials are more likely to cut back on discretionary items while Boomers are more likely to reduce essential spending.
Focusing on grocery prices, who should be held accountable for their rise? This is where we saw the biggest generational differences.
Boomers are more likely to blame food manufacturers and corporate greed in general.
Millennials are more likely to point to government policies and supply chain issues, and much more likely to mention climate change.
Although high inflation is affecting most people, the strategies consumers employ to navigate this challenge vary based on their generation and lived experiences.
For brands and retailers, it's crucial to recognize these nuances in order to effectively communicate and assist consumers in adapting to rising prices. One-size-fits-all approaches are not suitable in this environment.
Wrapping up: This is a side project that I executed out of sheer curiosity. As bandwidth permits, I’m going to look into this topic more in upcoming months. I’m especially interested to see how these attitudes and opinions change as the economic environment changes. What should I look into the next time I field this research? Are there any questions you would want to add on while a survey is in the field? Please reply and let me know what you think.
Want the full report? Just reply and I’ll share the PDF.
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Best regards,
Scott Sanders