Consumer Spending Expected to Plummet at Restaurants This Fall
Sep 22, 2023 ·
18m 55s
Consumer spending is the driving force of the US economy, accounting for about 70% of GDP. So when consumers start to cut back on spending, it's a big red flag...
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Consumer spending is the driving force of the US economy, accounting for about 70% of GDP. So when consumers start to cut back on spending, it's a big red flag for the economy.
That's why economists worry about a potential fall consumer spending drop. There are several factors that could contribute to this, including:
Current credit pressure
Credit pressure is the difficulty that borrowers have in repaying their debts. It can be caused by several factors, including rising interest rates, job losses, and unexpected expenses. This could have the most significant impact on restaurant spending.
Recent Savor.FM Data Trends
42% of 18-34 Plan to reduce restaurant spending this Holiday season
38% of Families are looking to reduce their restaurant visits this season
Credit pressure is currently on the rise in the US. This is partly due to the factors mentioned above, such as high inflation and rising interest rates. It is also driven by the fact that consumers have accumulated more debt than ever.
Inflation pressure
Inflation pressure is the upward pressure on prices caused by an increase in the demand for goods and services. Supply chain disruptions and other factors can also cause it.
Inflation pressure is currently at a 40-year high in the US. This makes it more expensive for consumers to buy the things they need and want. It is also putting a strain on businesses, making it more difficult for them to operate.
What to do
If you are concerned about a potential consumer spending drop in the fall, there are a few things you can do to prepare:
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That's why economists worry about a potential fall consumer spending drop. There are several factors that could contribute to this, including:
- High inflation: Inflation has been at a 40-year high in recent months, and it's eating into consumers' disposable incomes. This makes it harder for people to afford to buy the things they need and want.
- Rising interest rates: The Federal Reserve is raising interest rates to combat inflation. This is making it more expensive to borrow money, which could lead to a slowdown in consumer spending.
- Student loan payments: Student loan payments are scheduled to resume in October after being paused for nearly two years. This could put a strain on household budgets and lead to a decrease in consumer spending.
- Economic uncertainty: The global economy is facing several challenges, including the war in Ukraine and supply chain disruptions. This uncertainty could lead consumers to be more cautious about their spending.
Current credit pressure
Credit pressure is the difficulty that borrowers have in repaying their debts. It can be caused by several factors, including rising interest rates, job losses, and unexpected expenses. This could have the most significant impact on restaurant spending.
Recent Savor.FM Data Trends
42% of 18-34 Plan to reduce restaurant spending this Holiday season
38% of Families are looking to reduce their restaurant visits this season
Credit pressure is currently on the rise in the US. This is partly due to the factors mentioned above, such as high inflation and rising interest rates. It is also driven by the fact that consumers have accumulated more debt than ever.
Inflation pressure
Inflation pressure is the upward pressure on prices caused by an increase in the demand for goods and services. Supply chain disruptions and other factors can also cause it.
Inflation pressure is currently at a 40-year high in the US. This makes it more expensive for consumers to buy the things they need and want. It is also putting a strain on businesses, making it more difficult for them to operate.
What to do
If you are concerned about a potential consumer spending drop in the fall, there are a few things you can do to prepare:
- Create budget-friendly menu products.
- Focus on ways to assist the consumer in saving money in your marketing.
- Enhance loyalty programs so there is more value when they do spend.
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