Retail spending in June increased by 0.6%, demonstrating consumer willingness to spend despite economic uncertainty. Core retail spending rose by 3.9% year-over-year. Nonetheless, consumers are becoming selective in their purchases, opting to cut back on nonessentials and actively hunt for deals. Several trends indicate that while spending at restaurants has increased, consumers report spending less by choosing cheaper dining options. Grocery shopping is also reflecting selectivity with more frequent trips but reduced spending per visit as shoppers look for bargains in essential items.
A recent Bank of America Institute note spotted a contradiction: While data shows customers increasing spending at restaurants recently, when surveyed, shoppers said they actually cut spending on dining out. They explain this by deal-hunting: Diners still went out, but scaled down the types of restaurants they visited to get more bang for their buck.
We are seeing a continuation of the consumer selectivity that typically characterizes times of economic uncertainty. Specifically, some consumers appear to be seeking out perhaps fewer, but more meaningful experiences.
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