The pandemic has changed the way Americans shop.
Nearly one in five grocery shoppers in a national survey reported buying more private-label or store-branded goods to save money, according to a report released Wednesday by the Conference Board. “As in previous downturns, this change in spending patterns may be slow to reverse, with many likely to stick to cheaper products and sales channels over name brands,” it said.
At the peak of the pandemic, 64% of U.S. consumers reported actively cutting back on spending, the Global Consumer Confidence Survey said. After falling in late 2020, that number was back up at 62% in the first quarter of 2021. “Frugality will continue to reign for many consumers, especially if the jobs recovery remains sluggish if and when government fiscal support recedes,” the researchers added.
‘Frugality will continue to reign for many consumers, especially if the jobs recovery remains sluggish if and when government fiscal support recedes.’
— The Conference Board
said Wednesday it plans to grow, helped in part by its private-label brands. Walmart
said this month that it had hired fashion designer Brandon Maxwell as creative director of two of its private-label brands. Also this month, Target
said it would launch another private-label food brand on April 5 called Favorite Day, adding to its other store brands.
Generic brands can save 20% to 30% off the equivalent household brands, knocking up to $1 off a gallon of organic milk or standard-sized bag of coffee. All of those cheaper products, saving a dollar here or 20% there, add up: The average U.S. household budget for food at home hovers at $3,935 per year, according to the personal-finance site ValuePenguin.
Some 88% of Americans with an annual income of below $35,000 said that they bought private-label or generic-brand products to save money in 2019, far more than the 74% of households that earned $100,000 a year and said the same, another report said. Joan Driggs, vice president of content at the data company IRI, said consumers have an increasing level of trust in these brands.
The pandemic has changed shopping habits in unexpected ways, too. People have purchased more kidney beans and less cold medicine, as the COVID-19 pandemic rewrote American shopping lists. Studies show that Americans stocked up on oranges to fortify their immune systems, but bought less cold and flu medicine, in part due to social distancing.
The mental-health issues wrought by the pandemic have driven unhealthy behavior — including drug and alcohol use, gambling, poor eating habits and under-exercising — but the yearlong challenges have also led consumers to focus on three distinct consumer trends: health, personal well-being, and self-care, the Conference Board also said Wednesday.
The rate of credit-card borrowing declined in January, as Americans used the first two rounds of stimulus checks to pay down debt.
Conducted in collaboration with Nielsen
the Conference Board’s report said global consumer confidence climbed to 98 in the final quarter of 2020, up from 92 in the second quarter. Direct payments from the $1.9 trillion American Rescue Plan rolled out this month. The law authorizes $1,400 checks per person in households making less than $75,000 for individuals and $150,000 for married couples.
The relief package has not come a moment too soon. More than half of American consumers (56%) said they are living “paycheck to paycheck,” according to a separate poll released this month, and 48% have experienced unexpected financial setbacks in the last three months. Over 70% say they are becoming more conscientious of where they spend their money.
On the upside, credit-card borrowing declined in January, as Americans used the first two rounds of stimulus checks to pay down debt, Federal Reserve data released this month found. Credit-card debt increased only two months in the past year. “We expect financial wellness to be a major theme in American life as our society heals in so many ways over the coming year,” said Travis Credit Union.