Dive Brief:
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Retailers will likely need to keep up price cuts in order to entice many lower-income and middle income consumers whose wages aren’t rising even in the face of increasing expenses, according to experts. Retailers themselves are contributing to the problem by keeping wages low, experts say.
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Households are feeling the need to spend less and save more, according to a report to be released this week by bankrate.com. Two-thirds of 1,007 consumers surveyed said they’re limiting their spending each month, according to the study, with 32% of those saying that’s due to poor income growth and 29% saying they must save.
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The cost of rent, childcare, health care, and other inescapable expenses are rising, and consumers are spending money on more practical items like homes, cars, and smartphones, experts say.
Dive Insight:
A collection of studies on wages and spending behavior being released in recent weeks reveals a picture of lower-income and middle-income consumers being extra careful with their pocketbooks. That likely means that the discount-heavy retail environment of last year’s holiday season will see a repeat as consumers hunt for bargains in order to balance their giving with their need to keep spending under control.