As inflation remains high, there is now more pressure on household budgets to pay for essentials. According to a recent study, this has affected spending habits over the last year, with more consumers cutting back on non-essential purchases and bills.
This follows a recent survey by LendingTree, which found that more people are struggling to pay for basic bills like utility bills, housing costs, and food.
The study, which was conducted by Gravy Analytics, examined spending trends between 2021 and 2022 and also made predictions about spending trends in the coming year.
A key finding of the study was that consumers are now prioritising essential expenses even more, which means things that are less important are being left out of budgets.
For example, one area of spending that has decreased dramatically is eating out; while spending at grocery stores, and particularly discount retailers, has increased in the last year.
Additionally, spending on entertainment has fallen by almost 30%. Similarly, spending on travel and recreation decreased, with spending on trains declining by 23%, as well as decreases in spending on buses and airports. Spending on beauty services fell by 22% and gyms by 25%.
Founder and CEO of Gravy Analytics Jeff White said: “Insights from our report show that consumers are making careful decisions about their spending and are looking for value much more now than they were a year ago.
As widespread layoffs and economic uncertainty rage on, expect consumers to look for ways to save money on clothing, housewares, and other living essentials so long as job security and inflation remain concerns.”
In every area, these trends continue, showing that consumers are now prioritising and only spending money on what they feel is necessary and important.
The categories with the biggest increase in spending in 2022 were home-building stores, wholesale stores, grocery stores, pet stores, and discount stores. Those with the biggest decreases were gift stores, department stores, and sports goods stores.