New report from Upside illustrates current shopper trends

Upside has published The Consumer Spend Report 2024, presenting findings on today’s consumer economic sentiments and how they‘re shaping shopping habits. The report analyzed more than one billion transactions across four spend categories and heard from 7,000+ consumers to illustrate shopping behavior in 2024.

The results are important for customer-centric organizations who want to better understand the nature of the uncommitted customer, why they matter, and how to influence them. It also covers how loyalty programs and dynamic pricing factor into buying decisions.

Thomas Weinandy is a Senior Research Economist at Upside and says there is good news from July’s Consumer Price Index report, pointing out that all-item inflation is now under 3% — the lowest level since March 2021.

But the Upside survey tempers this encouraging news about lower inflation through its report, finding that 2.6x more consumers believe the economy worsened over the last year rather than improved. This persistent pessimism has led to increased price sensitivity and more savvy shopping behavior among consumers.

He commented, “Despite a growing economy, rising household incomes, and low inflation over the past year, public sentiment remains stubbornly pessimistic. Cautious behavior is shaping how, where, and what they buy.”

Upside’s survey also found that 58% of consumers say they are “significantly” or “slightly” cutting back on their spending because of their perception about the economy. The lower inflation data might “eventually” help bridge the perception gap between the actual economy and how people feel about it, but there is a perception gap to close.

Why eventually?

Dr. Weinandy commented “Consumers don’t always see a difference between high prices and rising prices. To many, they expect low inflation to be decreasing prices but that’s actually deflation, and when widespread, can be harmful to an economy. Even when inflation returns to the target rate of 2%, I expect consumers will continue to value promotions and lower prices over loyalty to a single brand.”

One of the reasons that consumers haven’t changed shopping behavior even with positive trends is that, for example, some of the smallest price increases over the past year have been in essential goods like groceries (+1.1%) and gasoline (-2.2%).

More evidence of how cautious consumers are behaving can be seen in the grocery sector. Upside’s report shows that cross-shopping behavior is still happening: the average consumer shops at three grocery stores and two and a half gas stations per month. 

This pattern is less about inflation dropping from 3% to 2% and more about consumers needing more time for the painful memory of high inflation to fade. It’s been over two years since inflation peaked at 9%, but it will take more time until consumer behavior catches up to the good news.

“An entire generation of consumers grew up not knowing about high inflation so 2021 proved to be a rude awakening. Shoppers had to learn strategies for making their money go further. Although inflation has now cooled over the past year, consumers are not going to unlearn those dollar-stretching strategies anytime soon,” says Weinandy.

The Consumer Spend Report 2024 from Upside is worthy reading for marketers seeking to understand consumer shopping trends in the US. We’ll be covering more from this report as we gather information.

Editor’s Note:

Dr. Weinandy is a Senior Research Economist at Upside, providing valuable insights into consumer spending behavior and macroeconomic trends for the fuel, convenience, grocery, and restaurant industries. With a Ph.D. in Applied Economics, his academic research is in digital economics and brick-and-mortar retail. He recently co-authored a book on leveraging AI for business intelligence. Dr. Weinandy lives in Grand Rapids, Michigan.

Upside is a digital marketplace that connects retailers with nearby Upside users to drive them through their doors. Upside’s approach centers on delivering retailers incremental profit by filling retailers’ spare capacity — like empty gas pumps, checkout lanes, or dining tables — with new, profitable transactions.