Inflation and Consumer Spending Factors Consumers

Transcript:Inflation and Consumer Spending Factors Consumers:
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. 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. 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.” 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