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1、SPECIAL REPORTInflation Inflated:Part 1 The Consumer Outlook 2 L.E.K.ConsultingSPECIAL REPORTContentsAbout L.E.K.ConsultingWere L.E.K.Consulting,a global strategy consultancy working with business leaders to seize competitive advantage and amplify growth.Our insights are catalysts that reshape the t
2、rajectory of our clients businesses,uncovering opportunities and empowering them to master their moments of truth.Since 1983,our worldwide practice spanning the Americas,Asia-Pacific and Europe has guided leaders across all industries from global corporations to emerging entrepreneurial businesses a
3、nd private equity investors.Looking for more?Visit .L.E.K.Consulting is a registered trademark of L.E.K.Consulting LLC.All other products and brands mentioned in this document are properties of their respective owners.2022 L.E.K.Consulting LLCUnderstanding how consumers are responding to inflation.3
4、Who is impacted by inflation.6The impact of inflation across categories.9How inflation is impacting behavior.13How consumers prioritize categories if inflation persists or abates.19Conclusion.26SPECIAL REPORTUnderstanding how consumers are responding to inflationWith U.S.inflation at its highest lev
5、el in more than 40 years,consumer sentiment has fallen close to an all-time low.Against this backdrop of unprecedented economic conditions,L.E.K.Consulting in October 2022 conducted a survey to learn more about how the countrys consumers have been changing their behaviors and how they plan to change
6、 them going forward.Source:University of Michigan;Bureau of Labor StatisticsFigure 1Monthly inflation rate and consumer sentiment index since 1978US 12-month rate1/1978-9/2022,monthlyUniversity of Michigan Consumer Sentiment Index1/1978-10/2022,monthlyPercentage2026202620201978 1984 1990 1996 2002 2
7、008 201420201984 1990 1996 2002 2008 20141978Index(1966 Q1=100)-4-202468406080100120L.E.K.surveyed more than 2,500 consumers across a range of income levels and generational segments to understand who,exactly,is being impacted by the rise in inflation and to what degree.It also set out to
8、 ascertain which of 17 different consumer categories are being impacted the most and how consumers behavior in relation to those categories is changing.More specifically,it sought to identify the categories consumers are most likely to cut or trade down in while inflation stays high,as well as those
9、 theyre most likely to return to once inflation starts to abate.3 L.E.K.ConsultingSPECIAL REPORTOur survey shows how consumers in each income segment are being affected,with the greatest impact being on lower-income households.Additionally,the results show the categories where consumers are willing
10、to absorb the cost increases,such as utilities,rent and motor vehicles,and where theyre not,leading to either trade-out or trade-down behaviors in those categories.Figure 2L.E.K.2022 US Inflation Study MethodologyKey issuesWho is impacted by inflation?How has inflationary impact varied across key co
11、nsumer demographics of age groups versus income ranges?Conducted October 2022 US consumersWhich categories are most affected?How does inflation affect the way consumers interact with discretionary and non-discretionary categories?Do key consumer demographics view inflation across categories differen
12、tly?2,500+respondents Balanced to general populationHow has consumer behavior changed?How has inflation caused consumer behavior to change?In which categories are consumers more or less likely to change their behavior?How do behavioral changes differ by category?17 categories examined Apparel,access
13、ories and footwear Beauty and personal care Consumer electronics Daily use household items Fitness Food and beverage Gambling Gasoline,automobile parts and upgrades Health and wellness products Home improvement,furniture and furnishings Leisure products and entertainment Pet products Rent Restaurant
14、s and foodservice Sporting goods/outdoor Travel and transport UtilitiesWhich categories are prioritized moving forward?If prices continue to rise,which categories are most vulnerable to being cut?When prices stabilize,to which categories are consumers most excited to return?12344 L.E.K.ConsultingSPE
15、CIAL REPORTFigure 3Critical trends and issues impacting consumers todayMore than 50%of earners below$150K indicate being “very significantly impacted”by inflation$200K 30%(Percentage of consumers selecting 6 or 7 on a 1-7 scale)Millennials and Gen X consumers report experiencing greater financial im
16、pacts than lower-earning Gen Z counterparts Gen Z 45%Millennial 50%-55%Gen X 50%-55%Boomer 45%(Percentage of consumers selecting 6 or 7 on a 1-7 scale)Impacts are most felt within nondiscretionary categories used every day55%of respondents report significant impacts in auto and F&BImpacts are genera
17、lly distributed in accordance with wealthThe average delta between least and most impacted income groups is 14%,but it is 2%-8%for notable exceptions such as restaurants,rent and home improvementBoomers are generally the least impacted age cohortHowever,Gen Z indicates incrementally lower impact fro
18、m inflation within F&B and restaurantsWhether consumers absorb price changes is usually aligned to whether the category is discretionaryPercentage of consumers absorbing prices Utilities 60%Rent 45%-50%Gasoline,automobile parts and upgrades 40%Pet 30%Percentage of consumers not absorbing prices Appa
19、rel 85%-90%Gambling 85%-90%Leisure 85%-90%Home improvement 85%Sporting goods 85%Relative to their lower incomes,Gen Z appears less likely to modify behavior within restaurant and apparel categoriesWhat categories are prioritized to be cut if prices continue rising?Consumers forecast that they would
20、be most likely to cut back on eating out,gambling and travel(40%of respondents selecting as the first priority to be cut)(Consumers who reported increased spending in a category were shown a maximum of five categories to compare preferences)What categories are prioritized for return when prices stab
21、ilize?Consumers report the greatest excitement about returning to preferred food and beverage products,rental units,daily household items,and travel options(40%selecting first prioritization across categories)(Consumers who reported increased spending in a category were shown a maximum of five categ
22、ories to compare preferences)Who is impacted?Which categories are most affected?How has consumer behavior changed?Which categories are prioritized moving forward?1234F&B=food and beverageSource:L.E.K.research and analysis5 L.E.K.ConsultingSPECIAL REPORTWhile the impact of inflation is being felt acr
23、oss generations and income levels,certain groups are feeling it more than others.The greatest impact is being felt by millennials and Generation X,while Generation Z and boomers are slightly less affected.Figure 4Inflations impact on key demographic groupsDemographic impactImpacts byincome groupImpa
24、cts byage groupCategory impactBehavioral impactCategory prioritization Inflationary pressures are being felt across income demographics,though pressure is especially high in consumers earning below$50K per year,where nearly 60%of consumers indicate they are very significantly impacted-Only earners a
25、bove$200K appear relatively insulated,although 30%do still indicate they are experiencing significant inflationary impacts Inflationary impacts are distributed relatively evenly across generations,although Gen Z and boomers appear to be marginally less impacted than millennial and Gen X cohorts,like
26、ly due to their lower expenses relative to income(e.g.,fewer/no kids in the home,less likely to have a mortgage)Who is impacted by inflationInflationary challenges are especially acute for consumers earning below$50,000/year,of whom nearly 60%report being significantly impacted.And while those earni
27、ng more than$200,000/year appear relatively insulated,30%of them also report experiencing significant inflationary impacts inflation just may not be impacting their spending as directly.Meanwhile,even though the impacts of inflation are distributed relatively evenly across generations,more than 50%o
28、f millennials and Gen Xers many of whom are juggling children and mortgages are feeling the pinch,whereas Gen Z and boomers are slightly less affected.Source:L.E.K.research and analysis6 L.E.K.ConsultingSPECIAL REPORT*Survey questions:Which of the following ranges best describes your total annual ho
29、usehold income before taxes last year(2021)?On a scale of 1 to 7,how impactful is inflation on your day-to-day life?Please answer on a scale of 1 to 7,where“1”is“not at all impactful”and“7”is“very significant impact”(Select one)*Percentages may not add to 100 due to rounding*Defined as rating a“6”or
30、 higherSource:L.E.K.survey and analysisFigure 5Inflation impact by income demographicPercentage indicating 6 or 7(out of 7)Percentage of responses*Most significant impacts*TotalUnder$25,000$25,000-$34,999$35,000-$49,999$50,000-$74,999$75,000-$99,999$100,000-$149,999$150,000-$199,999$200,000or more49
31、5856605146434029N=2,500N=381N=281N=301N=479N=313N=390N=184N=171654327-very significantimpact1-not at allimpactfulDemographic impactCategory impactBehavioral impactCategory prioritization2939393628272322322525272629292454550751232327 L
32、.E.K.ConsultingSPECIAL REPORTFigure 6Inflation impact,by age cohort*Survey questions:What is your age?On a scale of 1 to 7,how impactful is inflation on your day-to-day life?Please answer on a scale of 1 to 7,where“1”is“not at all impactful”and“7”is“very significant impact”(Select one)*Percentages m
33、ay not add to 100 due to rounding*Defined as rating a“6”or higherSource:L.E.K.survey and analysisPercentage of responses*TotalGen Z(18-24)Millennial(25-39)Gen X(40-54)Boomer(55+)N=2,500N=232N=643N=656N=969Most significant impacts*654327-very significantimpact1-not at allimpactfulThe oldestconsumers(
34、65+)are marginallyless impacted byinflation,withonly 42%of themselecting 6 or 7“significantlyimpacts”Percentage indicating 6 or 7(out of 7)4945525346322027292585Demographic impactCategory impactBehavioral impactCategory prioritization0255075228 L.E.K.Consu
35、ltingSPECIAL REPORTUnsurprisingly,consumers see the biggest inflationary impacts on the products and services they use the most,often daily namely those related to their use of motor vehicles,such as gas,as well as food and beverages.That said,the impact on high-touch product categories like pets an
36、d beauty and personal care is not as high.Figure 7Inflation impact by categoriesDemographic impactCategory impactBehavioral impactCategory prioritization Consumers are largely observing the highest inflationary impacts in gasoline,automobile parts and upgrades,and F&B,in which 55%of consumers have o
37、bserved significant impacts;two notable exceptions are pet products and BPC products,which score near the bottom of observable impact(30%of consumers significantly impacted)despite being used on a frequent basis Across most categories,the observed impact of inflation is proportional to the individua
38、ls income level;however,restaurants,home improvement and rent are impacting groups more uniformly,implying they are categories that scale more directly according to income Boomers typically report the lowest observed inflationary significance across all categories;however,Gen Z is reporting relative
39、ly lower inflationary impacts within F&B and restaurants,which could imply either a greater willingness to spend or that Gen Zs preferred channels/products have been able to better withstand pressuresCategory impactsby income groupCategory impactsby age groupCategory impactsThe impact of inflation a
40、cross categoriesBPC=beauty and personal care;F&B=food and beverageSource:L.E.K.research and analysis9 L.E.K.ConsultingSPECIAL REPORTAcross almost all categories,the perceived impact of inflation is proportional to income level in all but three categories rent,restaurants and foodservice,and home imp
41、rovement.The perceived impact of inflation in these three categories is nearly the same for all income groups,suggesting that these are areas where spending scales directly to income.Figure 8Inflationary impact on key productsDemographic impactCategory impactBehavioral impactCategory prioritizationG
42、asoline,automobileparts and upgradesFood and beverageRestaurants andfoodserviceTravel and transportDaily usehousehold itemsLeisure productsand entertainmentRentUtilitiesHome improvement,furniture and furnishingsPet productsApparel,accessoriesand footwearConsumer electronicsHealth andwellness product
43、sSportinggoods/outdoorBeauty andpersonal careGamblingFitnessN=1,998N=2,424N=2,256N=1,379N=2,428N=2,179N=1,535N=1,109N=1,402N=1,654N=2,209N=1,632N=2,110N=943N=2,237N=689N=805633386203436293349553202536392140Percentage of res
44、ponses*38Rent likelyshows lowerimpact givenlonger leasetermsSome impactNo impactSignificant impactNondiscretionarycategoriesFrequently usedcategory with lowerobserved impact*Survey question:How much has inflation impacted the following products you have purchased in the past 12 months?*Percentages m
45、ay not add to 100 due to rounding Source:L.E.K.survey and analysis10 L.E.K.ConsultingSPECIAL REPORTMeanwhile,the impact of inflation is typically reduced across older demographics,including boomers(and retirees).Notably,Gen Z reports relatively lower inflationary impacts within the food and beverage
46、 and restaurants and foodservice categories,which could mean one of two things:Either members of that generation are simply Figure 9Inflationary impact on key products,by income*Survey question:How much has inflation impacted the following products you have purchased in the past 12 months?Source:L.E
47、.K.survey and analysis0092082506070Percentage of responses indicating significant impact(N=2,500)Delta between max and min(Percentage significantlyimpacted)Gasoline,automobileparts and upgradesFood and beverageRestaurants andfoodserviceTravel and transportDaily useho
48、usehold itemsLeisure productsand entertainmentRentUtilitiesHome improvement,furniture and furnishingsPet productsApparel,accessoriesand footwearConsumer electronicsHealth andwellness productsSportinggoods/outdoorBeauty andpersonal careGamblingFitness$50,000 to$99,999$100,000 to$149,999$150,000or mor
49、eUnder$50,000Impacts spread acrossincome tiers more evenlyDemographic impactCategory impactBehavioral impactCategory prioritization11 L.E.K.ConsultingSPECIAL REPORTmore willing to spend money on those categories,or their preferred channels and/or the products and services they pay for in those categ
50、ories have been better able to withstand inflationary pressures.Figure 10Inflationary impact on key products,by age*Survey question:How much has inflation impacted the following products you have purchased in the past 12 months?Source:L.E.K.survey and analysis0070Percentage of responses i
51、ndicating significant impact(N=2,500)Gasoline,automobileparts and upgradesFood and beverageRestaurants andfoodserviceTravel and transportDaily usehousehold itemsLeisure productsand entertainmentRentUtilitiesHome improvement,furniture and furnishingsPet productsApparel,accessoriesand footwearConsumer
52、 electronicsHealth andwellness productsSportinggoods/outdoorBeauty andpersonal careGamblingFitnessMillennialGen XBoomerGen ZYounger consumers less impactedDemographic impactCategory impactBehavioral impactCategory prioritization12 L.E.K.ConsultingSPECIAL REPORTBroadly speaking,inflation is having an
53、 undeniable impact on consumer behavior.Outside of rent and utilities,anywhere from 50%to 85%of consumers have changed their purchase behaviors due to inflation.How inflation is impacting behaviorFigure 11Inflation impact on consumer behaviorDemographic impactCategory impactBehavioral impactCategory
54、 prioritization Inflationary pressures have caused significant behavioral changes:only the most unavoidable nondiscretionary categories,utilities and rent,have led to end-user price absorption(55%of users);within discretionary categories(outside of pet),generally 75%of consumers have adjusted their
55、behavior to accommodate inflationary pressures-40%-45%of consumers expect behavioral changes around channels and quantities to continue,even when prices stabilize Daily household items,pet products,F&B,H&W and BPC are all products that people appear to be trading down/adjusting their behavior toward
56、 but continuing to purchase,while all other discretionary categories,especially leisure,travel,restaurants and gambling,appear to demonstrate consumers reducing purchase volume rather than trading down products Boomers typically report the lowest observed behavioral impacts across categories;however
57、,Gen Z is reporting relatively lower impacts within restaurants and foodservice(and to a lesser extent apparel),which reinforces the finding either that Gen Z has a greater willingness to spend on the category,or that their preferred channels/products have been able to withstand pressures betterBeha
58、vioral impactsby income groupBehavioral impactsby age groupBehavioral impactsby categoryIndeed,inflation has been prompting consumers to make significant changes to their spending patterns,especially in those categories that are discretionary.Inflation is being mostly absorbed by the end user in onl
59、y the most necessary nondiscretionary categories rent and utilities and to a lesser degree in motor vehicles and pet products.BPC=beauty and personal care;F&B=food and beverage;H&W=health and wellnessSource:L.E.K.research and analysis13 L.E.K.ConsultingSPECIAL REPORTFigure 12Behavioral impacts on ke
60、y categories3-75-75-74-71-70-65-64-61-60-54-52-45-45-21-2011Percentage of responses(N=2,500)*Net behavioral change(Percentage absorbing price increase-Percentage changing behavior)UtilitiesRentGasoline,automobileparts and upgradesPet productsFood and beverageHealth andwellness productsTra
61、vel and transportDaily usehousehold itemsFitnessBeauty andpersonal careRestaurantsand foodserviceConsumerelectronicsSporting goods/outdoorHome improvement,furniture and furnishingsLeisure productsand entertainmentGamblingApparel,accessoriesand footwearI now shop for these items atstores/websites tha
62、t have cheaper prices(e.g.,online/discount stores)I buy cheaper products at thesame stores/locations(e.g.,budget brands/store brands)I buy the same item(s)at thesame frequency;I just pay more nowI buy these items/experiences morein bulk nowI have stopped purchasing these items/experiencesOther*I pur
63、chase these items/experiencesless frequentlyNondiscretionary categoriesDemographic impactCategory impactBehavioral impactCategory prioritization6583334022698320644720604874674577450844425675
64、711410222 111*Survey question:How much has inflation impacted the following products you have purchased in the past 12 months?*Percentages may not add to 100 due to rounding*Other includes write-in responses,which largely consist of one-off solutions(e.g.,I decided to move in with roommates within r
65、ent category)Source:L.E.K.survey and analysis14 L.E.K.ConsultingSPECIAL REPORTConsumers are trading down or otherwise adjusting their spending behaviors but continuing to spend money in the categories of daily household items,pet products,food and beverages,health and wellness,and beauty and persona
66、l care.But they are exhibiting more trade-out or delayed purchasing behaviors in every other discretionary category,in particular leisure,travel,restaurants,and apparel and footwear.In nondiscretionary categories,on the other hand,for the most part inflation is being acutely felt by consumers,but th
67、ey arent as likely to spend less in those categories.In the meantime,the amount of disposable income consumers have relative to what they spend continues to shrink,potentially exacerbating these behaviors.Only a small portion of consumers are absorbing price increases in restaurants and apparel with
68、out adjusting their behavior.But interestingly,younger cohorts are more inclined to behave in that way relative to their,on average,lower incomes,especially Figure 13Behavioral impacts x perceived pricing impacts on key categories*Survey question:How much has inflation impacted the following product
69、s you have purchased in the past 12 months?Source:L.E.K.survey and analysisPercentage of consumers tradingdown in cost per unit(N=2,500)Percentage of consumers adjusting unit purchases(incl.exiting category)DiscretionaryNondiscretionary05540455055600482364044485256606468Health
70、and wellness productsRentFitnessBeauty and personal careGasoline,automobile parts and upgradesDaily use household itemsUtilitiesConsumer electronicsPet productsHome improvement,furniture and furnishingsLeisure products and entertainmentGamblingTravel and transportFood and beverageApparel,accessories
71、 and footwearSporting goods/outdoorRestaurants and foodservice“Trade down”categories“Trade out”categories“Trade out”and“trade down”categoriesEnd-user price absorptionPet products appear to befunctionally nondiscretionaryH&W and beauty productsappear to be close to equilibriumbetween consumers tradin
72、gout vs.trading downDemographic impactCategory impactBehavioral impactCategory prioritization15 L.E.K.ConsultingSPECIAL REPORTFigure 14Behavioral impacts x perceived pricing impacts on key categoriesPercentage of consumers reportingsignificant inflationary impact(N=2,500)Percentage of consumers acce
73、pting price increases without adjusting behaviorDiscretionaryNondiscretionary0253035404550556002468 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66Categories most likely to experience behavioral changeCategories least likely to experience behavioral changeDemog
74、raphic impactCategory impactBehavioral impactCategory prioritizationGasoline,automobile parts and upgradesRestaurants and foodserviceFood and beverageTravel and transportUtilitiesApparel,accessories and footwearRentSporting goods/outdoorLeisure products and entertainmentFitnessPet productsHome impro
75、vement,furniture and furnishingsDaily use household itemsHealth and wellness productsBeauty and personal careGamblingConsumer electronics*Survey question:How much has inflation impacted the following products you have purchased in the past 12 months?Source:L.E.K.survey and analysisFigure 15Disposabl
76、e personal income and personal expenditure over time(1/2020-9/2022)Billions of USDDisposable personal incomePersonal consumptionexpenditure(PCE)Percentage income remainingafer PCE14 14 20 57 38 29 28 22 21 20 19 20 29 19 40 18 15 14 14 14 877117Demographic impactCategory impactBehavioral
77、impactCategory prioritization04,0008,00012,00016,00020,00024,000Jan.2020Apr.2021Oct.2020Apr.2020Jul.2020Apr.2022Jan.2021Jul.2021Oct.2021Jan.2022Jul.2022Source:BEA;L.E.K.research and analysis16 L.E.K.ConsultingSPECIAL REPORTcompared to boomers.Indeed,despite having lower incomes,younger consumers,esp
78、ecially Gen Z,are less likely to give up fitness,beauty and leisure activities,choosing to adjust their behavior before exiting those categories.This further demonstrates the persistent trend among younger U.S.consumers of valuing experiences over goods.Figure 16Behavioral impacts on key categories,
79、by generational cohort*Survey question:How much has inflation impacted the following products you have purchased in the past 12 months?Source:L.E.K.survey and analysis00908070Percentage of responses indicating“I buy the same item(s)at thesame frequency;I just pay more now”(N=2,500)Gasolin
80、e,automobileparts and upgradesFood and beverageRestaurants andfoodserviceTravel and transportDaily usehousehold itemsLeisure productsand entertainmentRentUtilitiesHome improvement,furniture and furnishingsPet productsApparel,accessoriesand footwearConsumer electronicsHealth andwellness productsSport
81、inggoods/outdoorBeauty andpersonal careGamblingFitnessMillennialGen XBoomerGen ZYounger consumers lesslikely to modify behaviorDemographic impactCategory impactBehavioral impactCategory prioritization17 L.E.K.ConsultingSPECIAL REPORTFigure 17Behavioral impacts on key categories,by generational cohor
82、t*Survey question:How much has inflation impacted the following products you have purchased in the past 12 months?Source:L.E.K.survey and analysis0102030Percentage of responses indicating“I have stopped purchasing these items/experiences”(N=2,500)Gasoline,automobileparts and upgradesFood and beverag
83、eRestaurants andfoodserviceTravel and transportDaily usehousehold itemsLeisure productsand entertainmentRentUtilitiesHome improvement,furniture and furnishingsPet productsApparel,accessoriesand footwearConsumer electronicsHealth andwellness productsSportinggoods/outdoorBeauty andpersonal careGamblin
84、gFitnessMillennialGen XBoomerGen ZYounger consumers disproportionatelyopting to stay in the categoryDemographic impactCategory impactBehavioral impactCategory prioritization18 L.E.K.ConsultingSPECIAL REPORTAcross the board,consumers primarily want to reverse trade-down behaviors and return to spendi
85、ng on their preferred“standard of living”items:food and beverage,rent,and daily household use items.As to discretionary spend categories,travel and transport,restaurants,and apparel top the list.How consumers prioritize categories if inflation persists or abatesFigure 18Future behavioral impact expe
86、ctations,by category*Survey question:You indicated that your purchase behavior for category changed in response to inflation;if prices stop increasing,do you expect to return to the same channels/brands that you used previously?*Percentages may not add to 100 due to roundingSource:L.E.K.survey and a
87、nalysisDemographic impactCategory impactBehavioral impactCategory prioritizationTravel and transportPet productsDaily usehousehold itemsApparel,accessoriesand footwearLeisure productsand entertainmentHome improvement,furniture and furnishingsSporting goods/outdoorBeauty andpersonal careConsumer elec
88、tronicsGasoline,automobileparts and upgradesHealth andwellness productsRestaurants andfoodserviceGamblingFitness0100755025Percentage of responses*I expect to buy the same new products in greater volumes/more frequently when pricesgo down(buy cheaper products more frequently)I am not sureI expect to
89、continue purchasing newproducts at the samerates(unchangedpurchase behavior)I expect to continue purchasing from the same new channelsI expect to switch back to my old preferred products and channels(returnto original behavior)Food and beverageN=72N=72N=76N=714331513
90、1425N=74N=7003313161225N=78N=74N=78N=77N=7227N=4224N=7224N=7126N=483019 L.E.K.ConsultingSPECIAL REPORTIf prices continue to rise,eating out,gambling and travel will be the top three categori
91、es that consumers will cut back on.Home furnishings,electronics and other discretionary durables like apparel and footwear would also see additional pressure.Pet products,meanwhile,are least likely to see any reduced spending in that case.Those priorities shift even further across demographics.Even
92、if prices continued to climb,younger consumers would be less likely to cut back on gambling,home improvement,leisure products and apparel.Conversely,once prices stabilize,preferred food and beverage products,housing/rental units,daily household items and travel options are the categories consumers a
93、re most excited about spending their money on.Figure 19Consumer forecasted changes in category consumption based on direction of pricesDemographic impactCategory impactBehavioral impactCategory prioritization If prices continue to rise,consumers forecast that they would be most likely to cut back on
94、 eating out,gambling and travel(40%of respondents selecting as the first priority to be cut);notably,pet products were least likely to see cutbacks(10%of respondents indicating it is their first priority to be cut)If prices continue to rise,less affluent consumers have a clearer order of prioritizat
95、ion for pullbacks,oriented around discretionary spend categories,while the wealthy seem to be demonstrating overall more balanced category prioritization,with outsized preference among those earning$150K to cut back on leisure and entertainment(50%prioritizing cutbacks)*Observing by age cohort,young
96、er consumers appear relatively less likely to cut back on gambling,home improvement,leisure products and apparel if prices continue to riseBehavioralimpacts byincome groupBehavioralimpactsby age groupPrioritization if prices continue rising*Behavioralimpactsby category Once prices stabilize,consumer
97、s report the greatest excitement about returning to preferred food and beverage products,rental units,daily household items and travel options(40%selecting first prioritization across categories)Wealthier consumers seem to be prioritizing returning to apparel,health and wellness,and home improvement
98、,while lower-income consumers are relatively more inclined to return to travel and consumer electronics Gen Z appears to be especially intent on returning to F&B,rent,apparel,pet products and consumer electronics categoriesBehavioralimpacts byincome groupBehavioralimpactsby age groupPrioritization f
99、or return when prices stabilize*Behavioralimpactsby category*Consumers who reported increased spending in a category were shown a maximum of five categories to compare preferencesF&B=food and beverageSource:L.E.K.research and analysis20 L.E.K.ConsultingSPECIAL REPORTWhen looked at through the lens o
100、f income,if inflation continues,less affluent consumers will cut back in discretionary spend categories while wealthy consumers will take a more balanced approach,focusing on apparel,health and wellness,and home improvement.Figure 20Consumer expectations for changes to category consumption if inflat
101、ion persists*Survey question:Among categories where you reported an increase in relative spend,please rank the categories you are most likely to cut back on if prices continued to rise*Consumers who reported increased spending in a category were shown a maximum of five categories to compare preferen
102、cesSource:L.E.K.survey and analysis02008090Percentage of respondents who indicated increased spend per categoryPrioritized categories to cut back on if prices continue to rise*Sporting goods/outdoorUtilitiesRentGasoline,automobileparts and upgradesPet productsFood and beverageHealth andwe
103、llness productsTravel and transportDaily usehousehold itemsFitnessBeauty andpersonal careRestaurantsand foodserviceConsumerelectronicsHome improvement,furniture and furnishingsLeisure productsand entertainmentGamblingApparel,accessoriesand footwearSecond priorityThird priorityFirst priorityDemograph
104、ic impactCategory impactBehavioral impactCategory prioritization101622N=483172225N=481192325N=430191815N=556232022N=485232227N=228242326N=541382718N=373392916N=350393118N=356413014N=425N=25N=419493332N=332202829N=353232127N=393291213N=4993521 L.E.K.ConsultingSPECIAL REPORTBut once prices
105、stabilize,wealthier consumers will focus on apparel,health and wellness,and home improvement,while those with lower incomes will resume their spending on travel and consumer electronics.Figure 21Prioritized categories to return to when prices stabilize*Survey question:Which of the following categori
106、es are you most likely to return to old purchasing habits first,if/when pricing stabilizes?(Please rank the top three)*Consumers who reported increased spending in a category were shown a maximum of five categories to compare preferences Source:L.E.K.survey and analysis02008090100Percenta
107、ge of respondents who indicated decreased spend per categoryUtilitiesFitnessSporting goods/outdoorRentGasoline,automobileparts and upgradesPet productsFood and beverageHealth andwellness productsTravel and transportDaily usehousehold itemsBeauty andpersonal careRestaurantsand foodserviceConsumerelec
108、tronicsHome improvement,furniture and furnishingsLeisure productsand entertainmentGamblingApparel,accessoriesand footwearSecond priorityThird priorityFirst priorityDemographic impactCategory impactBehavioral impactCategory prioritization152224N=263271619N=213272227N=252282922N=78313321N=144332518N=1
109、63352820N=291383018N=312382320N=235402617N=220443118N=154N=725018131221N=169623725N=124223630N=249172927N=291222617N=1963822 L.E.K.ConsultingSPECIAL REPORTFigure 22Consumer prioritization of product categories if pricing stabilizes,by income*Survey question:Which of the following categories are you
110、most likely to return to old purchasing habits first,if/when pricing stabilizes?(Please rank the top three)*When shown five choices on a least fill basisSource:L.E.K.survey and analysisPercentage of responses indicating first priority*Demographic impactCategory impactBehavioral impactCategory priori
111、tization$150K+$50K-$100K$100K-$150K$50K0554045505560657075ApparelBeautyConsumer electronicsDaily household itemsFitnessFood and beverageGamblingRentRestaurants andfoodserviceSporting goods/outdoorTravel and transportUtilitiesHealth and wellnessHome improvement,furniture and furnishingsLei
112、sure productsand entertainmentGasoline,automobileparts and upgradesPet products23 L.E.K.ConsultingSPECIAL REPORTGen Z,meanwhile,is especially intent on returning to spending in food and beverage,rent,apparel,pet products,and consumer electronics.Figure 23Consumer prioritization of product categories
113、 if inflation persists,by income*Survey question:Among categories where you reported an increase in relative spend,please rank the categories you are most likely to cut back on if prices continued to rise*When shown five choices on a least fill basisSource:L.E.K.survey and analysisPercentage of resp
114、onses indicating first priority*Demographic impactCategory impactBehavioral impactCategory prioritization$150K+$50K-$100K$100K-$150K$50K05540455055ApparelBeautyConsumer electronicsDaily household itemsFitnessFood and beverageGamblingRentRestaurants andfoodserviceSporting goods/outdoorTrav
115、el and transportUtilitiesHealth and wellnessHome improvement,furniture and furnishingsLeisure productsand entertainmentGasoline,automobileparts and upgradesPet products24 L.E.K.ConsultingSPECIAL REPORTFigure 24Prioritized categories to return to when prices stabilize,by generational cohort*Survey qu
116、estion:Which of the following categories are you most likely to return to old purchasing habits first,if/when pricing stabilizes?(Please rank the top three)Source:L.E.K.survey and analysis00908070Percentage of responses indicating first priority(N=2,500)Travel and transportBeauty andperso
117、nal careGamblingGasoline,automobileparts and upgradesFood and beverageRestaurants andfoodserviceDaily usehousehold itemsLeisure productsand entertainmentRentUtilitiesHome improvementand furniturePet productsApparel,accessoriesand footwearConsumer electronicsHealth andwellness productsSportinggoods/o
118、utdoorFitnessMillennialGen XBoomerGen ZSignificant prioritizationamong Gen ZDemographic impactCategory impactBehavioral impactCategory prioritizationDecreasing return prioritization25 L.E.K.ConsultingSPECIAL REPORTAs American consumers grapple with a level of inflation many of them have never even i
119、magined much less experienced,they are adjusting their spending and related behaviors accordingly.But those adjustments differ depending on age,income level and the category in which consumers are spending.And those behaviors will continue to shift,whether inflation continues to climb or,ideally,starts to retreat.We invite you to connect with us to learn more about our survey and how particular consumers are adjusting their spending habits now or plan to adjust them going forward.Please dont hesitate to contact us.For more information,please contact .Conclusion26 L.E.K.Consulting