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CONSUMER BEHAVIOR
Two recent reports reveal consumer concerns over rising inflation, which could impact apparel sales.
The Labor Department reported a continued rise in the Consumer Price Index increased by 0.8 percent in February alone - 7.9 percent year-over-year - and consumers have taken notice, showing signs of fretting over the prices of "common, everyday goods," as previously reported by WWD.
The state of consumer behaviors has shown to be incredibly susceptible to change throughout the pandemic, so what does this growing inflation mean for how people will shop in the months ahead? Two recent reports shed light on shopper sentiment, and the picture isn't bright.
According to the EY U.S. Future Consumer Index, half of U.S. consumers say that rising costs of goods and services are making it hard to afford things. When asked about what the most important purchase criteria are right now, 58 percent of respondents cited price while 64 percent said price will be the most important purchase criteria in the next three years.
And in a separate report from Affirm, the payment solutions network, which surveyed 1,740 consumers to understand how inflation is affecting their spending habits, 66 percent of U.S. consumers are concerned that rising costs will prevent them from paying for the things and experiences they had planned for the year. For Millennials and Generation Z, the number was 73 percent.
Looking at current perceptions, the EY survey found that the only factor that outweighed price as an important criterion when making a purchase decision was availability at just 2 percent higher than price - a lingering impact of the pandemic as well as supply chain issues.
"Consumers are telling us that with essential items, they're still willing to pay that the higher price," said Jeff Orschell, EY Americas consumer retail leader. "They know that inflation has caused those prices to go up, they know that it's likely to go up some more, but they're still focused on [availability]. Things like gas, fresh food or packaged food are ones that have been insulated from the inflation from what we're hearing."
When it comes to price sensitivity, EY's consumer research found that gas, fresh food and packaged food are less susceptible to experience a change in...