Despite a thriving economy and high levels of consumer confidence, shoppers continue to seek discounts, according to the latest issue of the quarterly Consumer View report from the National Retail Federation. Its survey of more than 3,000 U.S. adults found that 89% shop at various types of discount retailers. Some 63% buy more items on sale now than they did five years ago, the NRF found.
Of those shopping at discounters, 58% shop at dollar stores, 50% at off-price retailers like Ross or T.J. Maxx and discount grocers like Aldi or Lidl, 44% at outlet stores and 36% at thrift stores, according to the report, which was emailed to Retail Dive. It’s a habit: 43% head to a discount grocer weekly, 66% go to a dollar store at least twice a month and 58% to to an outlet at least once a month.
The desire for discounts spreads across categories: 75% look for deals on apparel, 71% on groceries, 62% on home decor and furnishings, 60% on personal care and beauty products and 52% on electronics, according to the NRF. It also spans income levels and generations, including 89% of those making under $50,000, 88% making between $50,000 and $100,000, and 90% making over $100,000. Bargain shoppers include 93% of millennials and Gen Z.
Still-stagnating wages among lower income groups, value-seeking bolstered by the Great Recession and a preference for experiences over things have ingrained shoppers at all income levels to the deal hunt.
Experts warn that not all consumers are participating equally in the current economic boom. "The expanding income gap between rich and poor Americans ... when combined with run away healthcare and higher education costs, is actually expanding at a rapid rate and leaving well over half of Americans (some say 75% or more) living paycheck to paycheck," retail analyst Nick Egelanian, president of retail development consultants SiteWorks, told Retail Dive in an email for a report on the economy heading into the holidays.
Younger consumers have especially prioritized spending money on experiences over the accumulation of apparel and other items. "There will always be demand for value, even in periods of a fast-growing economy, simply because younger shopping generations would rather travel and collect experiences than pay unnecessarily high costs for material 'things,'" Ray Hartjen, marketing and corporate communications director at RetailNext, previously told Retail Dive.
The recession of almost a decade ago went far to instill a consumer norm for discounts, according to the NRF. "Off-price and discount shopping took off during the recession as price-conscious consumers looked to save on everything from brand-name goods to everyday household purchases," the report said. "Now, eight years into the economic recovery, consumers continue to hunt for deals and discounts."
The practice undermines attempts by retailers to pass on the costs of shipping or omnichannel services in the former of higher product prices. Discount-hunting customers are "willing to give up almost anything for the satisfaction of a good bargain," with 75% or more willing to forgo buy online/pick up in-store, free two-day shipping, product reviews or an "entertaining" shopping experience that might spike prices, according to the report.