MAY 1-7, 2023 32 · SBJ.NET calculus that will explain consumer behavior, as inflation has slowed for nine consecutive periods and is now at 5%, according to the U.S. Department of Labor Statistics. Still, many economists – 58% – continue to predict a recession later in 2023, according to a February survey by the National Association for Business Economics. Maybe buyers feel confused by the U.S. Federal Reserve’s eight consecutive interest rate increases and by the 3.4% unemployment rate that began the year – the lowest on record since 1969. But buyers’ perplexity is mirrored on the retail side. Economic outlook American consumers are guardedly optimistic about the direction of the economy, according to March findings by Deloitte’s State of the Consumer Tracker. That measure, an online survey conducted monthly by the research firm, found concerns are easing up for U.S. respondents, with 47% concerned about their level of savings, down from a high of 62% concerned in May 2022. Additionally, 42% of U.S. respondents said they were choosing to delay large purchases – a figure that peaked at 56% nine months earlier. Fewer consumers report feeling anxiety about the economy as inflation eases, Deloitte found, though caution remains about rising prices. Some other data of note from U.S. respondents in the March survey: • 51% have money left over at the end of the month. • 39% feel their financial situation worsened year over year. • 20% are concerned about making upcoming payments. • 24% are concerned about credit card debt. • 50% say they can afford to spend money on things that bring them joy. In an April 14 release from the U.S. Census Bureau, advance estimates of U.S. retail and food services sales for March were $691.7 billion, down 1% from the previous month but up 2.9% year over year. Retail sales were down 1.2% from February but up 1.5% year over year. Consumers worldwide view inflation as a problem. A February report by Statista found inflation topped the list of worries of respondents around the world at 40%, ahead of poverty, unemployment and crime. But locally, inflationary fears are not enough to keep people from showing up for sugar tans and painting parties – a trend Stracke hopes will continue. Unique value proposition Chris Jarratt, co-owner and chief creative officer of Revel Advertising, said the key to thriving during an inflationary period is for a brand to own its unique value proposition for customers. “The better a brand is about owning their UVP and differentiating themselves from their competitors, the better their chances will be to maintain or gain market share during this period,” he said. “It’s an authentic alignment between what your brand is and what you’re saying it is.” Jarratt said the more similar a business is to its competitors, the easier it is for customers to use price as a differentiator. “If you’re allowing the market to determine if your product or service is the right choice based on price, you lose your power,” he said. According to Jarratt, the things a business should do in a major recession are the same things it should be doing anyway – they just get away with not doing those things more easily when there is no crisis afoot, he said. Jarratt said from a global standpoint, price increases are universal, but most businesses have seen little reduction in consumer spending. While it may seem counterintuitive, he recommends businesses maximize their marketing expenditures with a UVP focus. “If you can, there’s a lot of opportunity to gain market share while everyone else is pulling back,” he said. If unique is what you seek Hakaar’s Bazaar, another C-Street business, offers vintage, retro and mid-century modern clothing and furniture, among other goods. Owner Lauren Cross said she has not seen a decline in sales. “Actually, we have been on a steady incline since 2020 – COVID times,” she said. “Everything is expensive right now, yet seemingly most people are still able to spend freely.” While some people show restraint in their purchases, others counteract that tendency, she said. “We see a lot of traffic on the weekends from folks from out of state or from bigger cities who are looking for better deals than their hometown,” she said. Vintage is in, Cross said, in both furnishings and apparel. “Fast fashion is out for a huge chunk of people, which is great,” she said. “For some, it’s nostalgia. For others, they simply realize things from 50-plus years ago are built to last, versus today’s being disposable.” At Waverly House Gifts and Gallery, which offers fine arts and crafts, owner Eunice Wallar said things have been a little slower than normal this month, though she suspects Mother’s Day will juice up sales. “Retail is such a hard call,” she said. “Everything could change next week.” She noted she had a successful show opening and open house earlier in the month, and a California jewelry artist who was present did well with a trunk showing. After the pandemic, Wallar said she was hearing that some people were no longer dressing up very much, meaning the handmade scarves and jewelry she offers were not in demand. “People are starting to go to more benefits and affairs, so that part is really changing,” she said. Wallar has been doing what she does for 35 years, and she doesn’t get rattled by ups and downs. She acknowledged she’s not selling gas or groceries in her store. “People don’t have to have what we have in here,” she said. “The last week or so it’s been pretty slow, but we have sold some significant artwork recently.” • FROM THE COVER Retailers: US retail, food sales dip 1% in March Continued from page 1 US ECONOMY BY THE NUMBERS: Economists who predict a recession in 2023 58% Americans choosing to delay large purchases 42% Those who can make purchases that bring them joy 50% Americans with money left over at month’s end 51% See their financial position as worse than it was last year 39% Source: National Association for Business Economics and Deloitte’s State of the Consumer Tracker If you’re allowing the market to determine if your product or service is the right choice based on price, you lose your power.” —Chris Jarratt, Revel Advertising HEATHER MOSLEY UNIQUE VALUE Hakaar’s Bazaar owner Lauren Cross has seen no slowing of business for her C-Street vintage outlet.
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