Yahoo Finance Survey Reveals Increased Intent to Slash Budgets From Apparel to Travel This Summer
The latest edition of KPMG’s consumer pulse survey focuses specifically on summer, capturing more than 1,000 U.S. adult consumers’ sentiment on topics including inflation, spending, shopping preferences (including apparel), direct-to-consumer, paid memberships and data collection. The findings underscore the ongoing pressure felt by consumers who seek to find balance as they restrict budgets from cutting spending on select essentials to reevaluating the price of experiences.
“Consumers are tightening their belts another notch as they hunt for discounts, and even some essentials are being impacted,” said Duleep Rodrigo, U.S. consumer and retail sector leader at KPMG. “We have already seen a few retailers lower prices, as they look to maintain the balance between their margins and demand. 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.”
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As consumers consider summer budgets, only about one in five survey respondents said they expect to spend more on personal care products this summer — a drop from findings in the company’s 2023 survey which found about a third of consumers expected to spend more on the category.
When asked about budgets around apparel, 36 percent of consumers said they typically shop for apparel at discount stores, thrift stores and outlet stores — compared to 31 percent in 2023. And while an increased interest in shopping secondhand certainly speaks to cultural shifts as young shoppers strive to be more conscious of sustainability about their purchases, the change also reflects an emphasis on wanting to spend less.
Notably, the percentage of U.S. consumers planning to spend less on apparel in 2023 was the same as those planning to spend more, however, this year’s survey found that while 34 percent of U.S. consumers expect to spend less on apparel this summer compared to 21 percent of consumers who plan to spend more. On average consumers reported that they expect to spend 7 percent less each month on apparel this summer.
Moreover, results from the survey found that the expected online apparel spending closely matches overall spending projections with 31 percent of respondents saying they plan to spend less online this summer and 19 percent planning to spend more. Consumers are split when it comes to intent to shop online directly from a brand’s website with 51 percent reporting that they “frequently” do so and 49 percent reporting that they “rarely” do so.
Experiences are also under scrutiny, according to the report. Despite previous reports showing that consumers, especially younger consumers, have been more likely to spend on experiences like concerts and travel, consumers are seeing a need to pull back.
With the report revealing that a majority of consumers plan to spend less on travel and vacations, the authors of the report note that the results are the “opposite of last year’s survey findings.” On average, consumers will reduce their monthly spending on restaurants by 9 percent, entertainment and media out of the home by 8 percent and travel and vacations by 7 percent.
Sentiments around paid memberships and subscriptions varied across generations. Millennials said they were most likely to use a paid service for convenience and improved quality or services, while cost savings came out as the top benefit for both Gen X and Baby Boomer consumers. Gen Z consumers said they are most attracted to the improved quality when considering paying for memberships or subscriptions.
Overall, consumers across all generations showed a similar level of concern about companies collecting personal data, though over half said they are “willing to trade personal data for financial incentives.” Notably, the authors of the report surprisingly found that Gen Z consumers are the “least aware that companies gather data about their online activity to target them with personalized offerings” (60 percent). Across consumers of all generations, those who are aware of companies’ online tracking activity for personalized offers almost half (47 percent) are uncomfortable with the idea of companies using Gen AI to analyze their data.
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