Continued from page 30
Figure 2
However , throughout 2022 consumers struggled to direct money to their savings accounts , likely stemming from the various COVID stimulus / SNAP payments ending then continuing as prices began to climb . 4 As consumers spent more of their discretionary income on essentials , savings were likely relied on and have not yet seen a significant recovery . In addition to consumers saving less , the number of consumers making early withdrawals from their 401 ( k ) accounts increased by 39 % from the second quarter of 2022 to the second quarter of 2023 . 5 Credit card debt as a percentage of total household debt has also continued to climb , increasing in 7 of the last 10 quarters since the beginning of 2021 . 5
While real disposable income has seen some recovery growth , consumers have been continually getting bogged down by increased debt balances and higher prices , which has led them
to allocate savings to make ends meet . As savings account balances continue to dwindle , consumers will need to cut back on discretionary spending at some point , including at supermarkets and restaurants . Since beef won ’ t see much price cushion on the supply side , a pullback in beef purchases in favor of cheaper substitutes may be looming in the future .
Spending More on Essentials — Less Leisure & Dining Out
Consumer shopping and dining habits are being adjusted as they become more cautious with their budgets and overall spending . Figure 2 shows that in the last six months , consumers indicate they are now spending more on essential items including groceries and gas but less on discretionary items such as apparel , entertainment / leisure / travel , and dining out .
To reduce costs , 40 % of consumers are reportedly having more meals at home and plan to continue doing so , with approximately three-quarters of meals being cooked at home . 6 About half of consumers say they still dine out monthly , although they are opting for less expensive restaurants or menu options when doing so .
Stretching Dollars
Consumers are also finding ways to stretch their budgets for the next six months . As Figure 3 shows , almost half of consumers say they will eat out less and look for deals or coupons , while a third plan to stock-up / freeze items and get creative with more
Continued on page 34
32 NATIONAL CATTLEMEN DIRECTIONS 2023