Pushing Back on Inflation: Some Shoppers Reject Higher Prices
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Here's your money briefing for Friday, March 18th. I'm Trinae Nuri for The Wall Street Journal, filling in for J.R. Whalen. Whether you're at the grocery store or filling up your gas tank, you've seen them. Higher prices. Inflation is at a 40-year high as companies pass along increased costs to consumers. Despite some grumbling, shoppers have mostly gone along with it. But now there are signs that some people are pushing back on higher prices.
Gas prices are at an all-time high. A lot of, you know, food and staples are way up. And that's just eating into the disposable income that shoppers have.
So how much is too much? Coming up, we'll hear from our retail industry reporter, Suzanne Kappner, about where consumers are and aren't willing to pay more. That's after the break.
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From food to gas, it seems like higher prices are everywhere. And that has more consumers thinking twice before making that big purchase.
How are consumers reacting to 40‑year high inflation at the grocery store and gas pump?
This week, the Commerce Department said retail sales growth slowed in February compared to January. That's a possible sign that inflation is making people more cautious about their money. But where exactly are consumers tightening their budgets? And when are they willing to pay more? To find out, I'm joined now by WSJ Retail Industry Reporter Suzanne Kappner. Hi, Suzanne. Thanks for being here. Thanks for having me. Suzanne, during the pandemic, consumers had a lot more disposable income, which helped them meet higher inflation. But you report that recently more people seem to be pushing back on higher prices. What are you hearing from retailers about this?
Well, retailers have said they're seeing sort of select pockets of price resistance. Typically, these are on sort of either lower priced items or basic items like T-shirts. You know, whereas, for instance, Macy's tried to raise the price on a sort of entry level sofa by $100 to $599 from $499. The consumers pushed back on that. But Macy's was able to raise the price of its more expensive sofa from $2,000 to $2,200. And so, you know, the higher end shopper is still kind of willing to pay up, but you're starting to see at the lower end, you know, some price resistance there from shoppers.
All right, let's dig into that pushback a bit more. What is it about certain items that's making some customers push back on higher prices?
T-shirts are a good example. And a company I talked to, Bella Doll, a clothing maker, they tried to raise prices on their T-shirts by about $20 and sales went way down. So they had to roll back those price increases. And, you know, part of that is that T-shirts are kind of a basic item there that you can sort of find them anywhere. And customers tend to be a little more price sensitive. The same company was able to raise prices on their jogger pants. So it's not across the board. It's just sort of these select pockets. But it is a bit of a departure from what we had been seeing.
Yeah, this seems like the opposite of what we've been seeing over the past year.
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