Inflation and Consumer Spending Factors Consumers
Description: Inflation and Consumer Spending Factors Consumers continue to spend, although cautiously, according to US Census Bureau data. September and October retail and food sales increased; however, many consumers are still concerned about prices
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slide2. Inflation and Consumer Spending Factors Consumers continue to spend, although cautiously, according to US Census Bureau data. September and October retail and food sales increased; however, many consumers are still concerned about prices increasing further.
Unexpectedly, the October 2022 consumer price index increased 7.7% YOY on an annual basis, compared to September’s 8.2% YOY increase. Excluding food and energy, the core index increased just 0.3% from September, which had increased 0.6% from August.
If inflation continues to decrease during late 2022 and early 2023, then that could have a positive effect on Valentine’s Day 2023 sales. Easing of supply chain issues could improve retailers’ inventories.<br>
slide3. Jewelry and Flowers Are a Winning Combination Jewelry sales data (in all channels) from the US Bureau of Economic Analysis (BEA) shows the SAAR (seasonally adjusted annualized rate) for Q3 2022 was $112.49 billion, a 33.3% YOY increase while the Q1 2022 SAAR increased by 19.0% compared to Q1 2021.
According to the Society of American Florists (SAF), retail flower shops’ average sales are approximately $679,000 and are forecast to increase by 5% during 2023 and another 2% annually for several years.
The SAF also reported most florists find customers have been willing to pay the higher prices inflation has caused. Its research reveals customers are more likely to shop at small florist businesses that provide excellent customer service despite price increases.<br>
slide4. A Potential Boost from Strong Candy Sales Information Resources, Inc. (IRI) reports sales in the chocolate candy sector increased 9.7% YOY for the 52 weeks ending 10/9/22. The sugarfree chocolate sector increased even more at 20.7%.
The IRI had forecasted $3.4 billion in confectionary sales during the six weeks prior to Valentine’s Day 2022, with heart-shaped boxed chocolate, candy hearts and premium products being the most popular.
Candy Industry magazine stated in its 2022 State of the Candy Industry report (July 2022) that the newest trends included “truffles, filled chocolate and panned chocolate.”<br>
slide5. Restaurants Are Ready to Celebrate The restaurant industry is still recovering from pandemic closures and consumers’ renewed comfort with dining inside is helping. A July 2022 Morning Consult survey found 41% were “very comfortable” and 33% “somewhat comfortable” eating at a restaurant.
Those choosing to dine at a restaurant for Valentine’s Day 2023 should be aware an October 2022 Datassential report stated 59% of restaurants are open fewer hours because of continued labor shortages. The average was 6.4 fewer hours than 2019.
A July/August 2022 National Restaurant Association survey found 91% of restaurants were increasing menu prices to offset increasing costs, but a new Revenue Management Solutions study found a 10% to 13% increase would stop consumers from patronizing restaurants.<br>
slide6. Travel Is a Great Gift Given higher costs and many challenges the travel industry is still facing, more global travelers are planning their trips farther in advance. The 91- to 180-day window increased by 10% during Q3 2022 compared to Q3 2019.
More travelers are attracted to city breaks and beach vacations, according to Expedia Group’s Q4 2022 Travelers Insights Report. The top five destinations for North American travelers were New York, Las Vegas, Los Angeles, Orlando and Chicago.
Western states (California, Utah, Idaho, Colorado and Montana) have experienced early-season snowfall, resulting in many ski resorts and facilities welcoming skiers and snowboarders. Ski resort operator Ikon Pass opened 13 resorts earlier than planned.<br>
slide7. Advertising Strategies Valentine’s Day shoppers will be looking for deals and discounts just as they did for the holiday shopping season. Stores promoting Valentine’s Day products and services may want to schedule a series of deals, with the best for early shoppers during January.
Based on Society of American Florists research, florist shops should emphasize their excellent customer service since consumers are willing to exchange that service for paying higher prices. Promote some “above-and-beyond” service for Valentine’s Day.
Restaurants that are open fewer hours than during the past may want to promote Valentine’s Day reservations and provide an incentive, such as a bottle of wine or movie tickets, for those who book by a January date.<br>
slide8. New Media Strategies With more people being comfortable traveling, agents and other companies in the travel sector can use social media to promote long-weekend Valentine’s Day packages, both local, city, beach and skiing destinations.
Restaurants can maximize reservations and Valentine’s Day traffic and turnovers by posting photos or videos of the chef’s special menu items.
Jewelry stores can use the list of jewelry surveyed consumers said they were planning to buy during the next 12 months on page 4 of the Profiler to create separate social media posts, featuring each type and a digital coupon for a qualifying Valentine’s Day purchase.<br>
Unexpectedly, the October 2022 consumer price index increased 7.7% YOY on an annual basis, compared to September’s 8.2% YOY increase. Excluding food and energy, the core index increased just 0.3% from September, which had increased 0.6% from August.
If inflation continues to decrease during late 2022 and early 2023, then that could have a positive effect on Valentine’s Day 2023 sales. Easing of supply chain issues could improve retailers’ inventories.<br>
slide3. Jewelry and Flowers Are a Winning Combination Jewelry sales data (in all channels) from the US Bureau of Economic Analysis (BEA) shows the SAAR (seasonally adjusted annualized rate) for Q3 2022 was $112.49 billion, a 33.3% YOY increase while the Q1 2022 SAAR increased by 19.0% compared to Q1 2021.
According to the Society of American Florists (SAF), retail flower shops’ average sales are approximately $679,000 and are forecast to increase by 5% during 2023 and another 2% annually for several years.
The SAF also reported most florists find customers have been willing to pay the higher prices inflation has caused. Its research reveals customers are more likely to shop at small florist businesses that provide excellent customer service despite price increases.<br>
slide4. A Potential Boost from Strong Candy Sales Information Resources, Inc. (IRI) reports sales in the chocolate candy sector increased 9.7% YOY for the 52 weeks ending 10/9/22. The sugarfree chocolate sector increased even more at 20.7%.
The IRI had forecasted $3.4 billion in confectionary sales during the six weeks prior to Valentine’s Day 2022, with heart-shaped boxed chocolate, candy hearts and premium products being the most popular.
Candy Industry magazine stated in its 2022 State of the Candy Industry report (July 2022) that the newest trends included “truffles, filled chocolate and panned chocolate.”<br>
slide5. Restaurants Are Ready to Celebrate The restaurant industry is still recovering from pandemic closures and consumers’ renewed comfort with dining inside is helping. A July 2022 Morning Consult survey found 41% were “very comfortable” and 33% “somewhat comfortable” eating at a restaurant.
Those choosing to dine at a restaurant for Valentine’s Day 2023 should be aware an October 2022 Datassential report stated 59% of restaurants are open fewer hours because of continued labor shortages. The average was 6.4 fewer hours than 2019.
A July/August 2022 National Restaurant Association survey found 91% of restaurants were increasing menu prices to offset increasing costs, but a new Revenue Management Solutions study found a 10% to 13% increase would stop consumers from patronizing restaurants.<br>
slide6. Travel Is a Great Gift Given higher costs and many challenges the travel industry is still facing, more global travelers are planning their trips farther in advance. The 91- to 180-day window increased by 10% during Q3 2022 compared to Q3 2019.
More travelers are attracted to city breaks and beach vacations, according to Expedia Group’s Q4 2022 Travelers Insights Report. The top five destinations for North American travelers were New York, Las Vegas, Los Angeles, Orlando and Chicago.
Western states (California, Utah, Idaho, Colorado and Montana) have experienced early-season snowfall, resulting in many ski resorts and facilities welcoming skiers and snowboarders. Ski resort operator Ikon Pass opened 13 resorts earlier than planned.<br>
slide7. Advertising Strategies Valentine’s Day shoppers will be looking for deals and discounts just as they did for the holiday shopping season. Stores promoting Valentine’s Day products and services may want to schedule a series of deals, with the best for early shoppers during January.
Based on Society of American Florists research, florist shops should emphasize their excellent customer service since consumers are willing to exchange that service for paying higher prices. Promote some “above-and-beyond” service for Valentine’s Day.
Restaurants that are open fewer hours than during the past may want to promote Valentine’s Day reservations and provide an incentive, such as a bottle of wine or movie tickets, for those who book by a January date.<br>
slide8. New Media Strategies With more people being comfortable traveling, agents and other companies in the travel sector can use social media to promote long-weekend Valentine’s Day packages, both local, city, beach and skiing destinations.
Restaurants can maximize reservations and Valentine’s Day traffic and turnovers by posting photos or videos of the chef’s special menu items.
Jewelry stores can use the list of jewelry surveyed consumers said they were planning to buy during the next 12 months on page 4 of the Profiler to create separate social media posts, featuring each type and a digital coupon for a qualifying Valentine’s Day purchase.<br>