Cracks Are Showing in Consumers’ Tolerance for Inflation
People haven’t yet cut back broadly, but they are poised to trim spending on groceries, big-ticket items and mid-market clothing.
Consumers are paying more attention to the cost of groceries.
Photographer: Brendan Smialowski/AFP via Getty ImagesThere’s been a shift in the narrative about inflation. Back in November, retailers and consumer goods groups were concerned about the rising business costs of freight, labor and the like. Now, with inflation soaring across the board, the companies are worrying about whether their customers will tolerate higher prices.
As the conflict in Ukraine pushes up the costs of energy and food — Russian and Ukrainian wheat, for example — the inflationary pressure is set to intensify. And the first cracks in consumer demand can be expected to appear, especially in sales of groceries, big-ticket goods and mid-market apparel.