The news: US consumer sentiment fell more than expected in early March thanks in part to surging gas prices driving inflation up to its highest level since 1982, per preliminary data from the University of Michigan Consumer Sentiment Index.
More on this: Inflation is having an impact on consumer spending as shoppers cut back on discretionary purchases.
Crisis creates opportunities: Consumers seek out brands that they perceive offer value when their pocketbooks are being squeezed. Retailers and brands that find ways to convey the value they provide may be able to benefit.
The challenges: “Every retailer is impacted by inflation, regardless of category. As consumers’ confidence goes down, so do their dollars spent. While there's the potential for off-price retailers to win new customers who trade down, the overall climate leads many consumers to only buy what they absolutely must have,” said Suzy Davidkhanian, eMarketer principal analyst at Insider Intelligence.
The big takeaway: Low prices will likely help off-price retailers attract new customers in the short term.