How inflation is changing Americans’ spending habits: NPR

With inflation nearing its highest level in four decades, American shoppers are watching their cash pay and adjusting their spending habits — and the businesses that meet their needs are sticking.

The change in spending is affecting retailers across the country, from giants like Walmart to neighborhood supermarkets, as they look for ways to offer more affordable products to their customers.

Here are four examples of what businesses across America are seeing, and how they are adapting to the new realities of shopping.

Family supermarket that offers gas promotions

Tom Charlie’s family has been selling groceries in the Pittsburgh area for four generations, through much economic fluctuation. Even his father who ran stores during High rates of inflation in the seventies and eighties Never experienced such a period before.

“It’s definitely a challenge,” says Tom Charlie. “There’s no doubt about that.”

The three Charley Family Shop N Save Markets have always prided themselves on quality service, with in-store butchers and bakeries. But today, the company’s press ads are more likely to highlight discounts on yogurt than premium, hand-cut steaks.

“We are as focused today as ever on price and making sure we can get the items that people are interested in at the best possible price,” says Charlie.

That means beating the bushes for lower prices on everything from bananas to the plastic wrap used to package prepared foods. Charlie says that even as shoppers try to save money, they still want the ease that comes with pre-cut veggies or market-made kebabs.

“Comfort is king,” says Charlie. “They want it more and more every day.”

This is labor intensive for supermarkets, which employ more than 200 people. But it still has to be cost-competitive, especially now, when Grocery prices have gone up Double-digit annual rate.

“We never said we were going to be the cheapest,” Charlie says. “And we never said we were going to be the whole foods for the market.”

Charlie Supermarkets get a lot of miles from offering a discount at the gas station through a promotional link with Sunoco. Customers save 10 cents per gallon of gasoline for every $50 they spend on groceries.

“Our customers love this promotion,” says Charlie. “Everyone I know stores in my store use it.”

Cheaper train sets and search for used models

The Smoke Stack Hobby Shop in Lancaster, Ohio sells train sets, radio-controlled cars, and model airplanes. Sales boomed early in the pandemic when many people were looking for ways to entertain themselves at home. But some of the more detailed model kits, priced at $70 or more, are now out of reach for some customers.

“Once you get past the $50 mark, someone should really think twice about buying a set like this,” says Patti Riordan, who runs the store with her husband Don. “So we’re still going to get some of those outstanding ones, but it’s definitely going to be a lot less.”

Instead, Riordan is stocking more mid-priced models, which retail for around $35. An increasing share of its sales now come from used items that have been sold or traded by another hobbyist.

“We buy a lot of kits so people can buy a model kit or some train cars to plan their own trains at a fraction of the cost of new,” Riordan says. “And that was a huge support factor for people this year.”

Finding and pricing used hobby items takes a lot of work, Riordan says, but it’s a pleasure to find old railroad cars or other items finding new owners.

“It’s a great way to recycle that stuff,” Riordan says. “It really allows for more flexibility to keep the store going. And that, I think, gives us the strength to work around some of these things.”

Less Ice Cream – Lower Prices

Victor Garcia runs a Mexican-style ice cream business in the Fort Worth area that specializes in flavors like mango, tres leches, and tequila.

“Our whole mission is to make people happy by sharing a part of our Mexican culture,” he says.

This summer, Garcia noticed some customers at his SolDias stores are reducing their order size, perhaps buying just one item instead of two. The average transaction decreased from $13.50 to about $12.25.

“This kind of indicator was the first indication of the possibility of a recession,” Garcia says. “And we have to be more flexible with budget-conscious consumers.”

Garcia has started offering smaller portion sizes at lower prices. He’s also looking for cheaper paper suppliers and is exploring if he can cut costs by moving more of the ice cream manufacturing process in-house.

“At the end of the day, what we don’t want is customers saying, ‘This place is out of our budget,'” Garcia said. “It’s up to us as businesses to really listen and focus and give the customer the experience they want.”

More Hot Dog Sales, Fewer Cold Cuts at Walmart

I mentioned Walmart Decline in quarterly earnings Last week, cash-strapped shoppers were said to have been trading and filling their carts with less expensive items as they became more sensitive to rising food prices.

“For example, instead of deli meats at higher price points, customers are increasing their purchases of sausage as well as canned tuna or chicken,” says CFO John David Rainey.

Cash-strapped shoppers are also choosing more private-brand products, rather than brand-name goods. And in some cases, they have to deal with smaller package sizes.

Walmart says, so far, back-to-school sales have been strong. But customers are concerned about spending outside the grocery aisle. This forced the retailer to offer deeper discounts on other merchandise as it tries to offload unwanted inventory.

Meanwhile, Walmart says it’s seeing an increase in traffic from high-income shoppers, who are turning to the discount chain in search of bargains.