Inflation Fears Reach a Boiling Point: Consumers Rebel Against Rising Prices
Inflation may be cooling, but consumers’ outrage over higher prices is running hot. TikTok users have blasted Walmart for introducing digital shelf labels that allow it to quickly raise and lower prices. Wendy’s backpedaled after its CEO suggested the burger chain may start using dynamic pricing. And at some Chipotle locations, customers have filmed workers to ensure they don’t skimp on burrito bowls.
These incidents are just a few examples of the growing frustration consumers are experiencing with high prices. Many retailers, restaurants, and other consumer companies have seen sales fall as shoppers pull back their spending. Businesses are now trying to convince customers that they offer the best deals, fueling a rise in discounts, promotions, and value meals.
Consumers Feel Ripped Off
Consumers are fed up with deceptive pricing, said Jean-Pierre Dubé, a professor of marketing at the University of Chicago Booth School of Business. They’ve seen smaller items on shelves, paid tacked-on fees, and felt pressure to tip workers for things they didn’t tip for in the past.
"We’re reaching a boiling point on this," he said.
Grocery Prices Rise, But So Do Buying Power
Grocery prices have risen just 1% in the past year, but food at home prices have climbed more than 24% since May 2019, stretching consumers’ wallets and stoking anger with companies. Consumers’ buying power has also increased as inflation cools and the job market remains strong, boosting real hourly earnings for the average private sector worker, according to U.S. Bureau of Labor Statistics data.
Shrinkflation in the Spotlight
Gone are the days when consumers could trust that they were getting the same amount of product for their money. Shrinkflation, the practice of cutting an item’s size but not its price, has become a common experience for shoppers. Over the past year, the term has become a household phrase through references in pop culture and politics.
Pricing Pushback
Walmart and Wendy’s have recently felt fury from consumers concerned about getting ripped off. Walmart’s digital shelf labels have been criticized for paving the way for dynamic pricing, while Wendy’s CEO’s comments about testing features like dynamic pricing have been met with outrage.
More Price Cuts, Value Meals
But consumers don’t have to wait much longer to start seeing lower prices. As foot traffic declines for retailers and restaurants, some are leaning into value to bring back customers. Over the past couple of months, Target, McDonald’s, Aldi, and others have stepped up price cuts and debuted new deals for customers.
Conclusion
The battle between consumers and companies over prices is far from over. As the economy continues to shift, consumers will need to stay vigilant to ensure they’re getting the best deals. Companies will need to adapt to changing consumer habits and find ways to build trust with their customers.
FAQs
Q: What is shrinkflation?
A: Shrinkflation is the practice of cutting an item’s size but not its price.
Q: Why are consumers feeling ripped off?
A: Consumers are feeling ripped off because they feel like they’re not getting the same value for their money. They’re seeing smaller items on shelves, paying tacked-on fees, and feeling pressure to tip workers for things they didn’t tip for in the past.
Q: What is dynamic pricing?
A: Dynamic pricing is the practice of adjusting prices based on demand. This means that prices can go up or down depending on the time of day, season, or other factors.
Q: Will companies continue to offer discounts and promotions?
A: Yes, companies will likely continue to offer discounts and promotions to drive sales and build customer loyalty.
Q: How can consumers stay ahead of the game?
A: Consumers can stay ahead of the game by being aware of changing prices, reading reviews and ratings, and shopping around for the best deals.
Author: www.cnbc.com
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