Top executives at Target say U.S. customers plan to drive less and combine their shopping into fewer trips, Bloomberg reported Sunday (Jan. 16).
This is a response to more expensive gas prices and the highest inflation in decades. Along with that, shoppers have been planning to eat more at home, going instead for cheaper generic-brand goods, helping to ease the rising prices, said Target CEO Brian Cornell.
Target is not alone in monitoring how retail is playing out — retailers have been coming off two years’ worth of soaring demand as the pandemic and stimulus efforts contorted everything. Now, they’ve been looking at how behavior will change due to the rising inflation.
Speaking at an event for the National Retail Federation on Sunday, Cornell said there would likely be more changes coming with how customers react to inflation.
“Some of the historical ways consumers react to inflation will play out again in 2022,” Cornell said. “You’ll drive fewer miles, you’ll consolidate the number of times and locations where you shop. You’ll probably spend a little more eating at home versus your favorite restaurant, and you might make some trade-offs between a national brand and an own brand.”
Cornell didn’t specify exactly how he thinks spending will change, though he said they would “learn a lot” about how consumers react to higher prices soon.
The report also notes that the Labor Department’s food-at-home index rose 6.5% over the last year — for several years, there has only been a 1.5% annual increase.
PYMNTS reported that inflation was at 7% as of Jan. 12, the highest the number had been in 40 years.
See also: Inflation Hits 7%, Highest Level in 40 Years
This comes as the Bureau of Labor Statistics says there’s been a Consumer Price Index (CPI) rise of 0.5% month to month. After setting aside food and energy, the CPI core, as it’s termed, rose 5.5% from 2020 to 2021, along with 0.6% from November to December.
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