(BPT) - “The Big Shrink” is here: Pricing pressures have caused Americans to pull back, with over 6 in 10 (62%) saying their ‘purchasing power’ and income in relation to prices is decreasing — and their money doesn’t go as far as it used to (82%). A majority (79%) note household goods like cereal and chips dwindling in serving sizes, according to new research from Empower, a leader in financial planning, investing, and advice.
Some 78% are using more of their budget on essential items, and 27% have hit a pricing limit, and aren’t willing to pay anything more for many grocery staples, or will cut the items from their shopping lists. Prices are 20% more expensive than February 2020 according to CPI data1 — so consumers would need to pay $1,218 now for their dollars to have the same purchasing power as $1,000 in 2020.2 Consumers say they’ll quit buying goods including:
Quality and quantity
Almost half (45%) of people notice a change in quality of items they’ve been buying for years — 79% say there are less chips in the bag, and 54% say that chocolate costs more, but doesn’t taste as good. Price increases can influence loyalty, too: around 75% of Americans say it turns them off from a brand, and many are switching over to generic/store-owned brands (77%). Three in four believe the higher prices go, the less they’re getting in return.
Price check
Sizes aren’t the only thing getting smaller: Americans believe Time is Money, and 29% say their amount of free time is shrinking, feeling priced out of enjoying it (58%) as costs have risen. Nearly half of Americans feel priced out of retiring at the age they want (49%), along with financial goals like home ownership (48%), leaving an inheritance (50%) and paying for a college degree (41%). The sentiment extends to starting a business (38%) or buying a piece of one, through investing in the stock market (40%).
Still, optimism remains: 28% of Americans think prices will keep dropping before the end of this year. A third feel they have the opportunity to grow financially by paying down debt (33%) and investing (17%).
More findings:
Visit The Currency™ to read Empower’s full research report, “The Big Shrink.”
Methodology: The Empower “The Big Shrink” study is based on online survey responses from 2,203 Americans ages 18+ fielded by Morning Consult between March 22nd–24th, 2024. The survey is weighted to be nationally representative of U.S. adults (aged 18+).
1 U.S. Bureau of Labor Statistics. The Consumer Price Index, June 2024 compared to February 2020.
2 U.S. Bureau of Labor Statistics. CPI Inflation Calculator. June 2024 price change of $1,000, as compared to June 2020.
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