Weekly Updates
Weekly Updates
- One way consumers deal with rising living costs is “trading down.” The shopper achieves (more or less) the same outcome at a lower price, by finding cheaper goods or services. This happens in various ways.
- A consumer tired of outrageous increases of their mobile phone service prices may switch to a different, cheaper company. Higher-priced grocery stores may be rejected in favor of buying the same basket of goods at discount retailers. The weekly meal out may be replaced by a ready-meal at home. Organic eggs may be replaced by barn eggs.
- Economic data often assumes consumers to be creatures of habit, returning to the same stores (or mobile phone providers) automatically. Trading down is overlooked. Consumers’ real spending power may be stronger than officially reported—with judicious economies in buying one item freeing cash to spend on other items.
- Buying identical brands in a warehouse rather than a boutique might change the pleasure of the shopping experience, but the quality of the goods bought is unchanged. The complication is that a consumer “trading down” in other ways may receive lower quality. Substituting a ready-meal for a meal out or buying different eggs means the consumer gets less for their money, even if the money spent is less.
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