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Expenditure for the new semester expected to plummet in inflation

According to a new survey, retailers with good sales in the new semester will feel a pinch this summer as consumers in need are heading towards significantly reducing shopping.

According to a forecast survey by consulting firm Customer Growth Partners, the important new semester shopping season, which begins after the weekend of July 4, will grow 5.5% this year, compared to the rapid growth of 13.1% in 2021.

“We can see that the momentum has weakened in May and June,” said CGP President Craig Johnson.

Such low growth would be an ominous sign of concern about a recession, as consumers are experiencing the pain of the highest inflation rates in 41 years.

“The recession isn’t a slam dunk, but if consumer spending declines in July and August of the new semester, it’s a clear red light instead of a flashing yellow light,” Johnson wrote in a post. Told.

Over the last two decades, new semester sales have increased by an average of 4.5%, according to CGP data.

Consumers began to withdraw in March, when spending surged.
Getty Images

The expected 5.5% growth “has nothing to sneeze,” Johnson said. “But that’s clearly a slowdown from 2021.”

He added that the slowdown in consumer spending began in March and growth has returned from 11% in 2021 to 7%.

Last year, shoppers were filled with cash from stimuli and were blocked the previous year, mostly after attending remote schools.

But soaring energy prices, lower federal stimulus, rising interest rates, supply chain disruptions and lower personal savings are all particularly damaging to low-income households.

“For consumers, 9% inflation is an unsolved disaster, and wages and salaries are rising by just 5%, so real income is declining. Inflation’taxes’ are low. It has fallen the most to income and bond households. “

A wall of $ 1 items.
Consumers aren’t buying electronics this year because they stocked up on their devices during the pandemic.
Jeff Greenberg / Universal Image

Consumers are expected to invest in the wardrobe this summer, with apparel spending expected to increase by 5.9%. This is compared to the staggering 33% growth rate of last year when schools and businesses were reopened.

However, when many shoppers work remotely or attend classes during a pandemic, most shoppers stock up on their devices, and spending on electronics is expected to drop by 4%. increase.

Target CEO Brian Cornell said this month as a measure of consumer health on consumer spending on the holiday weekend of July 4 (consumers are willing to travel distances and meals. Amount) will be carefully monitored.

Books and pencils on the desk.
Backschool spending increased 13.1% last year, compared to the expected growth rate of 5.5% this year, according to new data.
Getty Images / iStockphoto

“The weekend of July 4th is really important.” Cornell said Presenting to the New York Economic Club.

Expenditure for the new semester expected to plummet in inflation

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