“Inflation is certainly impacting consumer behavior, but the financial constraints caused by inflation should not be expected to impact all purchases, especially those that have deep emotional connections,” said Jorge Abram Barraza, an assistant professor of consumer psychology at USC Dornsife. “The price of a turkey varies substantially, but a 7% increase translates to only a few dollars more for a bird. It is hard to believe that a few dollars will get in the way of tradition and nostalgia.
“In fact, what we should expect is that grocers will be willing to absorb a bit of that increase in order to strengthen consumer relationships and bring more holiday shoppers into their stores. Walmart, Aldi and a few others have already mentioned they are keeping prices at 2021 levels or lower than inflation.
“Where we might expect consumers to be hit are those that wait longer to get a bird. If costs do not lead to a drop in consumer demand and supply is not keeping up with demand, there will be many families seeking alternatives for the holiday. That can result in a break in tradition. Since traditions are similar to habits (behaviors we do without much deliberate thought), many families may start to move beyond the turkey this holiday season.”
Pent-up demand expected to spark consumer interest, though product availability will be uneven
“With consumers worried about inflation, there will probably be considerable pressure on retailers to make good deals available to consumers,” said Lars Perner, an assistant professor of marketing at USC Marshall. “Many retailers committed to large order quantities a year or more ago, and may even have locked in prices, since manufacturers often give retailers large discounts for ordering so far in advance.
“Availability of different types of products may be uneven, so shoppers who are more flexible in their choices will likely be more successful. With a lot of pent-up demand from last year, when supply chain problems limited the assortment of gifts available, there may be considerable consumer interest in holiday gifts this year.
“In post-pandemic times, more consumers who liked to shop in person before will have come into the habit of shopping online. It is likely that sales will continue to start earlier and earlier, with Amazon already having a second Prime Day earlier this fall.”
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