In the face of worsening inflation, lower-income consumers have made multiple changes to their discretionary spending.
That's according to Numerator's Consumer Goods Price Index, which shows prices have increased 35% for low-income consumers, defined as those with a household income below $40,000, since January 2018. This is compared to 31% for high-income consumers.
Since 2019, Numerator found that low-income consumers have shifted over $10 billion of their budget from discretionary categories over to everyday essentials, such as grocery. In contrast, higher-income households have shifted $21 billion dollars worth of spending to discretionary goods.
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"With energy prices high and the recent interest-rate hike adding pressure, high-income consumers are pulling back selectively, trading stores and sometimes brands to find value, while low-income consumers have largely already made those adjustments, making restaurants a likely next area for reduced spending," noted Numerator.
Additional highlights from Numerator include the following:
*Walmart already captured nearly one-in-four dollars spent ...