Retail categories benefit from the tightening of the belt

With face-to-face gas prices appearing around every corner, endless tales of packaging tricks and bundling strategies deployed to conceal rising product costs, and a series of surcharges and fees deployed to offset expenses, inflation is unavoidable at this time.

Not only do consumers see it firsthand in their daily lives, but even when they’re not shopping or shopping, they’re reading about it, posting about it, and talking about it with each other in a way normally reserved for small talk about the weather. .

Yes, inflation is back with a vengeance and after a 40 year nap it seems determined to inflict hardship and change everything it touches. Even though inflation is the ubiquitous economic evil, for any American under 70 who was not an active adult consumer (25+) during the previous double-digit price booms of 1975 and 1980, its impacts are truly unprecedented and mostly forgotten in most of our lives.

But for all its ruinous impacts on individuals, the inflation and belt-tightening it triggers will likely also be a major catalyst for certain retail categories that are positioned to offset those impacts. With this in mind, PYMNTS presents “The Frugal Five”.

  1. dollar stores

It’s almost as if they saw it coming, as during the sporadic and tenuous recovery from shocking two-year lockdown lows, major dollar store players were opening new locations at a blistering pace. As we reported in January, Dollar General, Dollar Tree and Family Dollar accounted for about half of all new store openings in the United States last year. That’s not to say it will be easy, as there are sure to be more revisions such as Dollar Tree’s adoption of the $1.25 price last November as well as the more recent rollout of $3 and $5 promotions. .

  1. Bulk purchase warehouses

While many brands and retailers will tinker with so-called “shrinkflation” and reduce the amount of goods in their packages but keep the price the same, giant warehouse stores have always taken the opposite direction. Whether it’s Costco, Sam’s or BJ’s Wholesale, wholesale leaders will continue to fight high prices via their two-pronged economy of scale attack that not only benefits from bundles and larger portions, but also leverages the collective buying power of tens of millions of members.

  1. Cheap(er) Eats

Whenever there is a shift towards basic necessities, food and shelter – although far from immune – are in a unique position. While consumers will clearly switch brands and choices to stretch their budget, they will generally be looking to eat for less. Whether this change takes place at the grocery store or as part of a move towards less expensive means of eating out, the winners and losers of this broad food category will be determined by how retailers and brands position themselves. to respond to this request. And not just by purchasing more ingredients, but through a mix of prepared foods, frozen meals and other conveniences that add variety and value to meals.

  1. Retrade

By any name, used, resale or reCommerce, this category is entering the modern inflation era with a flying start. Not only are clothing dealers already in business and well established, but the likes of thredUP, Poshmark, The RealReal and others already have legions of loyalists who like to save money but always get “new” clothes. . They could also benefit from the fact that more consumers are likely to look for innovative ways to fundraise, which will make fundraising concepts like “cleaning out the closets” all the more appealing.

  1. Home entertainment

As much as Americans yearn for a return to normalcy after two years of COVID, this latest consumer challenge should curb those non-discretionary purchases and activities a little longer. With that in mind, the outlook looks good for an extension of the home enjoyment and comfort trend that has seen unprecedented growth since lockdowns began in March 2020. Whether it’s a preference for streaming movie nights at home, backyard barbecues, or creative kitchen and bathroom accessories, the nesting trend — albeit a little tired — is sure to look like a bargain.



On:Fifty-seven percent of consumers who used advanced identity verification methods such as voice recognition when contacting customer service say they would do it again. The Consumer Authentication Experiences report surveyed nearly 3,800 US consumers to find out how delivering innovative verification experiences helps businesses deliver superior customer service across all channels.