You can tell a lot about the mood of the Great American Consumer simply by tracking the Kroger (KR) Digital Coupons Page.
That’s exactly what the data analysts at 84.51°, a retail data science firm located in Cincinnati, Ohio, did in the firm’s latest Inflation Special Edition Digest. The team’s survey tracked 400 customers who had shopped at a Kroger in the past three months.
“Shopper concern remains more severe when it comes to inflation, compared with COVID,” the 84.51° Digest reported. “71% of consumers are extremely concerned about rising prices while 47% believe that prices will remain higher for the next one-plus years.”
To better cope with skyrocketing consumer prices, shoppers are continuing to change their behaviors. “Kroger has seen an increase of 15% in site visits to the Kroger Digital Coupons page between May and June 2022,” the report noted.
With the so-called “Kroger Index”, 84.51° also dug up some additional nuggets on where U.S. consumers stand right now with their household financial outlook -- and it isn’t pretty.
This is from the company study:
- 57% of Americans regularly look for sales/deals/coupons
- 56% have reduced the amount of driving they do due to rising fuel prices
- 36% are purchasing less meat and fish
- 34% are shopping less frequently for groceries
- 31% are going out or ordering out less than they used to (61% are preparing food at home, up from 52% in June, and 50% say they will eat out less in the coming months.)
Lower- and Higher-Income Americans Share Some Spending Traits
The 84.51° study also reveals that U.S. consumers on both ends of the wage scale have different priorities, but share similar household budget attitudes right now.
- · The company’s analysis shows that lower-income households are more likely overall to adjust their grocery shopping habits in response to inflation, with 49% switching to lower-cost brands vs 38% of high-income households.
- 29% of higher-income households are buying more bulk items compared with 25% of lower-income households. Switching retailers is a less common behavior overall, but more prevalent across lower-income households with 16% stating they have changed where they buy their groceries.
- Most households in both higher and lower income groups reported similar rates of cutting back in areas such as clothing, recreation, and entertainment (60% of lower income and 54% of higher income)
- Meanwhile, older shoppers (age 55-64) are much less likely to indulge during challenging economic times compared to younger shoppers (age 25-35) who continue to indulge by dining out, purchasing small treats, TV subscriptions, and alcohol.
A Different Dynamic With This Recession
The notion that even wealthier Americans are signing up on the Kroger Digital Coupons page is intriguing. Seemingly everyone, across every major consumer financial demographic, is taking a magnifying glass to household spending these days.
“It's not surprising that Kroger is seeing increased demand for digital coupons,” said Rob Volpe, chief executive officer at Ignite 360, a consumer insights and strategy firm. “Couponing is a passion for some and a fallback for others. When times are tight, more consumers turn to coupons to save money, or shop the deals on the shelf.”
The dynamic with the current economic downturn doesn’t exactly mirror typical recessions, and that’s intriguing to consumer behavior specialists like Volpe.
“While the numbers indicate a recession, the job market remains hot. Consequently, it's not like people are out of work and having to make do with little to no income, it's that their paycheck isn't going as far as it used to,” Volpe told TheStreet. “Depending on how inflation and gas prices go, we may not see as deep a pullback as we have in the past."
Another new wrinkle in Kroger Nation is how so many Americans have reverted back to some of their pandemic-era habits.
“People returned to cooking at home more frequently during the height of the pandemic,” Volpe said. “They also invested in their home decor so they could do some small group entertaining.”
“That wasn't so long ago, so it may be easy for people to return to some of those behaviors while they wait for the economy to stabilize,” Volpe noted.
A Disconnect Between the “Elites” and the Public?
With this week’s national debate over what constitutes a recession, some front-line financial services professionals wonder if the public policy crowd is dismissing or downplaying the economic pain Americans are feeling right now, as highlighted in the Kroger data.
“There may be a disconnect between elite economists and the media on one side and regular "Kroger Coupon" Americans on the other, because the former may be downplaying the severity of the recession while the latter is dealing with its effects firsthand,” said Moreu Rumsfeld, growth manager at FastPaydayLoans, in West Palm Beach, Fa. “Elite economists and the major media may be downplaying the recession because they want to avoid panic or believe the economy will eventually rebound.”
“However, regular Americans using coupons to save money are more concerned about the immediate economic effects of the recession,” Rumsfeld told TheStreet.
