June 18, 2024 – As inflation continues to pressure consumers, they expect to spend less this summer on personal care products, considered an essential, and restaurants, travel and entertainment, according to the 2024 KPMG Consumer Pulse Survey, summer edition.
"Consumers are tightening their belts another notch as they hunt for discounts, and even some essentials are being impacted. We have already seen a few retailers lower prices, as they look to maintain the balance between their margins and demand,” said KPMG US Consumer and Retail Sector Leader Duleep Rodrigo. “If consumers continue to tighten their spending, retailers will want to consider whether placing more emphasis on product sizing and the experience they offer consumers may be more effective in the long run than just lowering prices.”
The KPMG survey captures the sentiment of nearly 1,100 US adult consumers nationwide on spending, inflation, shopping preferences, including direct to consumer, paid memberships and data collection, among numerous topics.
About one in five (21%) consumers anticipate spending more on personal care products this summer. A significant drop from a year ago when about one-third (32%) expected to do so. That’s not the case for grocery spending as, like a year ago, over 50% of consumers think they will spend more on groceries this summer.
Split in online spending on essentials
Anywhere from 53% to 65% of consumers plan to maintain the same amount of online spending on essentials, but only grocery – 29% expect to spend more, 18% say spend less -- and automotive categories have a net set of consumers spending more. Personal care products and prescription medicines are expected to have net less spend online.
Experiences under scrutiny
At the same time, consumers expect to reduce spending on experiences this summer as a net set of consumers plan to spend less on out of home entertainment, restaurants and travel and vacations.
Almost three times as many consumers anticipate spending less (43%) than more (15%) on out of home entertainment. Almost twice as many consumers plan to spend less (41%) than more (21%) on restaurants. Last year, a net amount expected to spend more. A net number of consumers anticipate spending less on travel and vacations. The opposite of last year’s survey finding.
On average, consumers think they will reduce their monthly spend on restaurants by 9%, entertainment and media (both in and out of home) by 8% and travel and vacations by 7%.
Data collection findings call out lack of Gen Z awareness, cross-generation concern and GenAI discomfort
Surprisingly, tech-savvy Gen Z (60%) is the least aware that companies gather data about their online activity to target them with personalized offerings. But 75% of Gen Z are concerned about companies collecting their personal data.
- Overall, there is a consistent level of concern across all generations about companies collecting their personal data, yet more than half are willing to trade personal data for financial incentives, and 44% would do so for increased privacy controls.
- Of those who are aware companies track online activity to develop personalized offers, only 29% are comfortable with the idea of companies using GenAI to analyze their personal data. Almost half (47%) are uncomfortable.
Interest in paid memberships or subscriptions is strong across generations, with Boomers trailing, but their reasons vary.
- Gen Z is attracted by improved quality or subscriptions (57%) as the main reason to currently consider paid memberships and subscriptions over three other reasons.
- Millennials cite convenience and improved quality or services as their top reasons (59% for each); Cost savings are the top reason for Gen X (66%) and Boomers (65%)
- When it comes to making paid memberships or subscriptions more appealing, it is all about discounts, free or expedited shipping and rewards programs.
- About three-fourth of consumers are willing to pay less than $100 per month for all their memberships or subscriptions, with 45% willing to pay less than $25 a month.
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