Black Consumers Show Highest Level of Financial Optimism Among Minority Groups
Numerator, a data and tech company serving the market research space, has launched new inflation insights to provide an omnichannel view of rising prices. A Price Pulse quantifies price changes in aggregate across channels, with added context by consumer demographic segments, while a Financial Outlook Tracker measures consumer sentiment through a monthly survey of 10,000+ panelists. Prices continue to rise across all channels and across all categories with Household products seeing the most pronounced increases. As prices rise, financial sentiment is declining overall, with Gen Z feeling the most squeezed.
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Omnichannel Inflation: Consumers are paying more for everyday goods, across categories.
- Household products are seeing the sharpest increases in prices. In February 2022, items in this category were 15.3% higher than year ago and 24% higher than February 2020 (pre-pandemic).
- Grocery prices saw double digit increases (vs year ago) for the first time in February. In February 2022, Grocery prices were up 11.5% vs YA, up from the previous high of 8.7% in January 2022.
- Health & Beauty prices grew throughout the second half of 2021 but growth has decelerated in 2022. While up 11.2% in February 2022 vs YA, Health & Beauty prices were the only tracked category to see slower growth in February than in January vs. YA, though comparisons to 2YA continued to increase.
Grocery Inflation: Rising prices are disproportionately affecting the Dollar channel and minority consumer groups.
- Dollar stores showed the largest increase in Grocery prices vs. YA (+14.3%) and 2YA (+22.5%).
- Online was the least impacted channel in 2021 but has surged in grocery prices in 2022. At the end of 2021, Online grocery prices were 6.4% higher than a year ago, the lowest of any tracked channel. However, in the first two months of 2022, online grocery prices have spiked to 12.4%, surpassing Food (10.3%), Mass (9.8%), and Club (8%) channels.
- Minority consumer groups are more impacted by rising prices than White / Caucasian consumers. Asian consumers have seen the largest price increases, paying 12.4% more per grocery item than a year ago, followed by Hispanic/Latino consumers (+11.9%), Black consumers (+11.8%), and White/Caucasian consumers (+11.3%).
- The gap between minority groups and White/Caucasians is even more pronounced when comparing grocery prices vs pre-pandemic times (Hispanic/Latino consumers +23.9%, Black consumers +22.7%, Asian +22.4%, White/Caucasian +17%).
- Gen Z is feeling the impacts of inflation more so than older generations. Millennials, Gen X, and Boomers are paying prices roughly 11.3% higher than a year ago, while Gen Z consumers are facing a more significant increase of 13.5%.
- Low Income consumers are the most impacted by inflation compared to other income cohorts. Low Income consumers are paying 12.8% more for groceries than a year ago, compared to Middle Income (+11.4%) and High Income consumers (+11.1%).
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Financial Outlook Tracker: An ongoing monthly survey of 10,000+ Numerator panelists examines consumer financial security and discretionary income sentiment and spending:
- Younger consumers were increasingly pessimistic about their financial situations throughout 2021, but all generations except Gen X had a more positive outlook in the new year. Financial optimism was on the rise in January 2022 for Millennials (+3.1 points vs December 2021), Boomers+ (+1.8 points), and Gen Z (+0.7 points). Gen Z was the only generation to show continued momentum into February 2022 (+3 points vs Jan 2022).
- While Gen Z financial outlook has improved in 2022, these consumers are still considerably less likely than older generations to say they feel “Good” or “Very Good” about their financial situations (44% of Gen Z consumers, compared to 51.8% of Millennials, 53% of Gen X, and 54.8% of Boomers+).
- White/Caucasian consumers consistently reported higher financial security than every other ethnic group since March 2021, with 55%+ claiming a positive outlook. Black consumers were the only other ethnic group to break the 50% mark in 2021.
- Consumers plan to put extra money in savings or pay off debts. Overall, the most common response was to put extra funds in savings (35.2%), followed by paying down debts (31%). Both responses showed declines through the second half of 2021.
- Black consumers were the most likely group to say they would put extra funds in savings (40.2%) or pay down debts (38%), while White / Caucasian consumers were most likely to use extra money for home repairs (21.6%).
- Gen Z was the most likely generation to say they would put extra funds into savings (42.5%), followed by Millennials (36.6%), Boomers+ (35.9%), and Gen X (33.9%).
- Millennials are generally the most likely group to invest extra funds, but their intent to do so is on the decline. In February 2022, 15.6% of Millennials said they would invest any spare cash, down from 20.9% who said the same in June 2021.
- Travel and vacation plans are making a comeback in 2022, after waning with the Delta and Omicron variant surges. Nearly 3 in 10 consumers said they would use extra funds for vacations / travel in the summer of 2021. As concern rose with new COVID variants, this number fell to 22.6% of consumers by December and climbed back to 25.6% by February 2022.
Methodology: Percent changes in Numerator’s Price Pulse are calculated at a category level. Average price per item within a category is based on verified purchase data from over 100,000 Numerator panelists, and the monthly average price is compared versus the monthly average one year ago and two years ago. The Price Pulse includes a cross-channel view of prices, as well as channel-specific views and cuts by consumer demographic groups. Numerator’s Financial Outlook Tracker leverages an ongoing survey that collects approximately 10,000 responses from active shoppers each month. Consumers are asked to rate their current financial situation in addition to sharing spending intentions. The tracker has additional breakouts by ethnicity, generation, and income level.