Inflation Impacts Consumers’ July 4 Celebrations

Many are cutting back on dining out, fireworks and travel.

June 28, 2022

Inflation

CHICAGO—Eighty-four percent of U.S. consumers plan to celebrate the Independence Day despite high gas prices and inflation, according to a new report from Numerator. However, more than half (53%) expect inflation to impact their plans. This is the first holiday that Numerator has tracked where the majority of consumers expect at least a moderate (29%) or significant (24%) inflation impact.

Consumers are cutting back on travel and spending, with 39% planning to buy fewer items than in previous years, and 27% said they will travel less due to the increase in gas prices specifically. Sixty-two percent of celebrants said they will purchase items on sale to save money, while 37% will prepare more budget-friendly snacks and meals, 36% will use more coupons, 26% will switch to private label/store brands and 25% will shop at dollar or discount stores.

Twenty-nine percent of celebrants will cut back on dining out and fireworks, and 24% will cut back on holiday decorations. Twenty-five percent of respondents said they will cut back on meat or seafood; however, 56% still plan to purchase meat and seafood for their festivities.

The majority of consumers (64%) will spend less than $100 this Independence Day. About a quarter (28%) plan to spend more than $100, with Gen X being the most likely to fall into the high spend group.

Nearly half (45%) of celebrants plan to purchase alcoholic beverages. Beer is the top choice across all age groups (74% of all consumers), but Boomers+ are more likely to buy wine, while younger shoppers are more likely to opt for hard seltzers and ready-to-drink (RTD) cocktails. Among those consumers planning to buy hard seltzers or RTD cocktails, more than 2 in 5 (43%) plan to buy Mike’s Hard, followed by White Claw (34%), Truly (32%), Bud Light Seltzer (16%), Jose Cuervo (14%), High Noon (14%) and Topo Chico (8%).

Most consumers (88%) plan to shop in-store for Independence Day, with 68% going to grocery stores, 47% mass/big box and 32% club stores. Younger generations prefer Costco.com and Target.com vs. Walmart.com. Gen Z is more than twice as likely to shop at Costco.com, and millennials are 33% more likely to shop at Target.com. Both generations were less likely to shop at Walmart.com. Almost all celebrators (95%) plan to purchase something for the holiday, including snacks (60%), meat and seafood (56%), fruits and vegetables (45%) and side dishes (45%).

Seventy-two percent of U.S. consumers intentionally took steps to save money because of inflation in May as the food and beverage industry is being impacted by consumers’ cost-savings techniques.

Over half (53%) of U.S. adults said that they have changed their eating and drinking habits due to inflation last month. More than 8 in 10 survey respondents said that they are eating out less often, and roughly three-quarters are going to bars less often. Consumers are also purchasing less meat—72% of consumers say they are doing so, and the number rises to 81% among baby boomers. Sixty-eight percent of respondents reported that they are consuming less alcohol.

A recent NACS survey revealed that high gas prices are taking their toll on sales at convenience stores, with 59% of retailers saying customer traffic has decreased in stores during the past three months. Nearly half of all retailers (49%) also say that those customers coming inside the store are buying less compared to three months ago when gas prices were $1.50 a gallon lower.

In addition, retailers expressed concerns that elevated gas prices could also depress sales over the traditionally busy summer-drive season: 53% say they expect sales to be lower this summer than last summer, with only 25% anticipating increased sales.

With consumer shopping behaviors shifting in response to historic inflation, here’s what convenience retailers can do to combat price pressure and keep your customers’ loyalty. And here’s how inflation and the labor market are impacting small businesses.

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