Consumers Making Early Inflation Trade-Offs in Discretionary Channels, According to Numerator Shopping Behavior Index
Home Improvement and Beauty In-Store Channels Decline While Online Channel Maintains Momentum Across Categories
Numerator, a data and tech company serving the market research space, has published new income level views in its Shopping Behavior Index, which tracks consumer buying behavior across 12 retail channels, including online, in-store, and quick service restaurants (QSRs), indexed against 2021 data. Overall, consumers are making more shopping trips and spending more per trip, but buying fewer items. This indicates that consumers are starting to make trade-offs across channels, with more discretionary channels like Home Improvement and Beauty seeing the biggest decline in units across income levels.
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Key findings include:
Online and In-Store Sales: Sales are up across nearly all retail channels, driven by consumers making more frequent shopping trips compared to a year ago – when COVID-19 vaccinations were not yet widely available.
- Spending is up nearly across the board, due to both rising prices and increased mobility as consumers return to pre-COVID lifestyles. Consumers are spending 59% more in Gas & Convenience stores than they were a year ago, 23% more at QSRs, and 21% more in Club stores.
- Gas & Convenience spending increases are most pronounced among middle income consumers (+64% vs YA) and low income consumers (+63%), due in part to rising gasoline prices and increased spending in the Convenience channel.
- Discretionary channels are the only channels to see spending start to dip as consumers are forced to spend more on essentials. Spending in Beauty & Home Improvement is trending down, with most recent weeks indicating dips in spending vs. year ago (-7% vs. YA in Beauty, and -14% vs. YA in Home Improvement).
- Middle income consumers are spending more and making more shopping trips than other income groups, across channels. Sales among middle income shoppers are up 23% vs YA and trips are up 14% (compared to low income consumers at +21% sales, +7% trips; high income consumers at +18% sales, +8% trips).
- Consumers have returned to in-store shopping, while continuing to shop online. Total in-store spending is up 23% vs YA, with the highest increase among low income consumers (+26%). Online spending remains consistently at or above 2021 levels.
Shopping Trips: In addition to elevated spending, the number of shopping trips is growing in 2022, driven by a return to in-store shopping and out-of-home dining:
- Growth of in-store shopping trips is being tempered by online. In 2021, online shopping drove trip growth, but in 2022, total trip growth across channels (+9% vs YA) is being tempered by online (flat vs YA). Online trips are being kept afloat by middle income consumers (+9%).
- Home Improvement is the only tracked channel to consistently report decreased trip counts in 2022 (currently -21% vs YA), with consumers spending less time in their homes this year, and following a surge of home improvement projects throughout the pandemic.
- Quick service restaurants see the highest growth in trips among all tracked channels, currently +18% vs YA, and peaking in mid-February at +33-38% vs YA, likely due to increased dining out around Valentine’s Day.
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Shopping Dynamics:
- The Gas & Convenience channel shows the highest increases in spend per trip. While all channels are elevated, spend per trip at Gas & Convenience stores is 34% higher than a year ago, due in part to the rising cost of gasoline, which is included in c-store spend per trip data.
- Low income consumers are paying more than their fair share. Across channels, low income consumers are spending more per shopping trip (+14% vs YA), but buying fewer items (-12% vs YA), indicating that they are spending more dollars for fewer goods than last year at this time.
- This trend is less pronounced among middle and high income consumers, who show smaller increases in spend per trip (+8% and +9% vs YA, respectively).
- Consumers are buying more alcohol. Similar to other channels, Liquor channel sales (+20%) and spend per trip (+20%) are elevated vs YA, but Liquor is one of only two channels (along with QSRs) to show consistent increases in units per trip, indicating that consumers are increasing their alcohol purchases, rather than an inflationary trend.
The Shopping Behavior Index is updated weekly and covers 12 retail channels: Beauty, Club, Dollar, Drug, Food, Gas & Convenience, Home Improvement, Liquor, Mass, Online, Pet, and Quick Service Restaurants (QSR). Income level brackets are defined as: Low Income (<$40k/year), Middle Income ($40-$80k/year), and High Income (>$80k/year).
