But that behavior has shifted. Mentions from consumers depleting savings accounts are also at all-time highs.
According to the Federal Reserve Bank of St. Louis, the personal savings rate for Americans fell to 3.3% -- this is the lowest personal savings rate since the Great Recession.
You can see both trends at play in the chart below:
The bottom line: consumers are more vulnerable than they’ve been in years.
And they know it.
While they may not have capital to pay off credit cards or re-fill savings deficits, consumers are making strategic purchasing decisions.
Average consumers are trading down for more affordable brands and products
Macro trend data reveals some interesting behavior shifts over the last year.
Deal hunting is at all-time highs…meaning many companies are forced to mark down precious inventory to get consumers to pull the trigger.
This is impacting some upper-middle-class brands with high price points.
Especially companies operating in discretionary segments, like apparel and décor.
Here are some names LikeFolio expects to continue to feel the pain in the short term…
Two weeks ago Nordstrom said weak sales and numerous markdowns hurt its results in the Holiday season, noting, “While we continue to see greater resilience in our higher income cohorts, it is clear that consumers are being more selective with their spending given the broader macro environment."
You can see this rejection of Nordstrom’s offerings in consumer purchase intent levels, down -33% on a YoY basis.
While its stock as rallied on hopes that interest from an activist investor and a potential board shakeup could re-inject life into the high-end department store brand, LikeFolio data reminds us that there are larger issues at hand…like consumer spending budgets.
Nordstrom isn’t the only high-end brand to feel the pain of tighter budgets.
Check out demand for Lululemon in the first quarter, highlighted in red:
While still very early, demand mentions have slowed drastically vs. two quarters ago.
In 22Q3, demand grew by +18% YoY. In the 4th quarter, this growth rate slipped to +4% YoY. In 23Q1, the demand growth rate is pacing -16% lower YoY…talk about a massive shift.
This slow-down makes sense.
Despite the brand’s prowess, consumers are making tough decisions, especially regarding non-essential items like apparel.
On a macro level, consumer mentions of seeking out off-brand or generic brand clothing items have increased +13% YoY.
On google trends, this phenomenon surfaces as searches for “dupes.”
Consumers hunting dupes – or lower-priced products – have risen significantly vs. prior years, and Lululemon is one of this trend’s top victims.
Consumers are curating a list of options more affordable than Lululemon and sharing it with their peers.