SolDias ice cream stores in the Dallas-Fort Worth area noticed that some customers had reduced the number of their orders this summer. The chain is looking to cut costs to keep prices within reach.
Courtesy of Victor Garcia
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Courtesy of Victor Garcia
SolDias ice cream stores in the Dallas-Fort Worth area noticed that some customers had reduced the number of their orders this summer. The chain is looking to cut costs to keep prices within reach.
Courtesy of Victor Garcia
With inflation near a 4-decade high, US shoppers are watching their every penny and adjusting their spending habits – and the businesses that serve them are taking notice, too.
The shift in spending is affecting retailers across the country, from giants like Walmart to neighborhood supermarkets, as they look to offer more affordable products to their customers. .
Here are four examples of what businesses across America are seeing and how they’re adjusting to the new shopping reality.
Family supermarket is promoting gas
The Tom Charley family has been selling groceries in the Pittsburgh area for four generations, experiencing a lot of economic ups and downs. Even his father, who ran the store in time high inflation of the 1970s and 80s never seen a stage quite like this.
“It was a challenge,” said Tom Charley.
The three Charley Family Shop N Save markets have long prided themselves on high-quality service, with in-store butchers and bakeries. But today, the company’s newspaper ads are more likely to highlight a yogurt sale than premium hand-cut steaks.
“Today, we’re always focused on price and making sure we get the items people care about at the best possible price,” says Charley.
That means dusting for lower prices on everything from bananas to prepackaged food wraps. Even when shoppers are trying to save money, says Charley, they still want the ease that comes with pre-cut vegetables or handmade barbecue at the market.
“Convenience is king,” says Charley. “They want it more and more every day.”
Tom Charley (left) and his family run three Shop N Save supermarkets outside of Pittsburgh. Their establishments boast in-store butchers and bakeries. But these days, their weekly newspaper ads are more likely to feature discounted items than high-end steaks.
Courtesy of Tom Charley
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Courtesy of Tom Charley
Tom Charley (left) and his family run three Shop N Save supermarkets outside of Pittsburgh. Their establishments boast in-store butchers and bakeries. But these days, their weekly newspaper ads are more likely to feature discounted items than high-end steaks.
Courtesy of Tom Charley
It’s labor-intensive for supermarkets, which employ more than 200 people. But they still have to compete on cost, especially now, when Grocery prices are climbing at a double-digit annual rate.
“We never said we were going to be the cheapest,” says Charley. “And we never said we were going to be the Whole Foods of the market either.”
Charley’s supermarkets get a lot of their money from gas station discounts through a promotional relationship with Sunoco. Customers save 10 cents a gallon on gas for every $50 they spend on groceries.
“Our customers love that promotion,” says Charley. “Everybody I know that stores in my store uses it.”
Train sets are cheaper and hunt for used models
The Smoke Stack Hobby store in Lancaster, Ohio, sells train sets, radio-controlled cars, and model airplanes. Sales boomed early in the pandemic as more people were looking for ways to entertain themselves at home. But some of the most intricate modeling kits, priced at $70 or more, are now out of reach for some customers.
“Once you cross the $50 mark, someone has to think long and hard about buying such an accessory,” said Patti Riordan, who runs the store with her husband, Don. “So we’ll still buy some of those premium ones, but certainly a lot less.”
Instead, Riordan is stocking more mid-priced models, which sell for around $35. And a growing portion of her sales come from used items that another hobbyist has sold or traded in.
“We buy a lot of collections so people can buy a model set or several wagons for their train layout for a fraction of the cost of a new collection,” says Riordan. “And that’s been a big sustaining tool for everyone this year.”
Patti Riordan runs the Smoke Stack Hobby Shop in Lancaster, Ohio with her husband Don. The store has scaled back its selection of higher-priced models to focus on more affordable items as well as second-hand.
Don Riordan / Courtesy of Patti Riordan
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Don Riordan / Courtesy of Patti Riordan
Patti Riordan runs the Smoke Stack Hobby Shop in Lancaster, Ohio with her husband Don. The store has scaled back its selection of higher-priced models to focus on more affordable items as well as second-hand.
Don Riordan / Courtesy of Patti Riordan
While finding and valuing used hobby items is a lot of work, Riordan says, it’s fun when old train cars or other items find new owners.
“It’s a nice way to recycle those things,” says Riordan. “It really allows a lot more flexibility to keep the store running. And that, I think, gives us the strength to get through some of this.”
Ice cream in smaller servings – and lower prices
Victor Garcia runs a Mexican-style ice cream company in the Fort Worth area, specializing in flavors like mango, tres lords, and tequila.
“Our whole mission is to make people happy by sharing a part of our Mexican culture,” he said.
This summer, Garcia noticed that some customers at his SolDias stores had reduced their orders, perhaps buying just one item instead of two. The average transaction dropped from $13.50 to about $12.25.
“It was the first sign that maybe a recession was coming,” Garcia said. “And we have to be a little more flexible with our budget conscious consumers.”
Customers at SolDias ice cream stores in the Dallas-Fort Worth area began dialing in their purchases this summer, sometimes buying one instead of two. The company has started offering smaller portions to keep prices affordable.
Courtesy of Victor Garcia
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Courtesy of Victor Garcia
Customers at SolDias ice cream stores in the Dallas-Fort Worth area began dialing in their purchases this summer, sometimes buying one instead of two. The company has started offering smaller portions to keep prices affordable.
Courtesy of Victor Garcia
Garcia has begun offering smaller servings at lower prices. He’s also looking for cheaper paper suppliers and figuring out if he can cut costs by moving more of the ice cream production process in-house.
“At the end of the day, what we don’t want is the customer saying, ‘That place is out of our budget. “It’s up to us for businesses to really listen and turn around and give customers the experience they want.”
Sell more hot dogs, less cold cuts at Walmart
Walmart reported quarterly earnings decrease last week, said cash-strapped shoppers have dropped deals and filled their carts with cheaper items as they become more sensitive to rising food prices.
“For example, instead of higher priced cold cuts, customers are increasingly buying hot dogs as well as canned tuna or chicken,” said John David Rainey, chief financial officer.
Shopping carts with the Walmart logo are seen outside a Walmart store in Burbank, California on Aug. 15. Walmart experienced a decline in earnings in its most recent quarter.
Robyn Beck / AFP via Getty Images
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Robyn Beck / AFP via Getty Images
Shopping carts with the Walmart logo are seen outside a Walmart store in Burbank, California on Aug. 15. Walmart experienced a decline in earnings in its most recent quarter.
Robyn Beck / AFP via Getty Images
Cash-strapped shoppers are also choosing private-label products over branded goods. And in some cases, they have to continue with a smaller package size.
So far, back-to-school sales have been strong, Walmart says. But customers are wary about spending outside the grocery aisle. That forces the retailer to offer deeper discounts on other items as it tries to remove unwanted inventory.
At the same time, Walmart says it’s seen increased traffic from higher-income shoppers, who are turning to discount chains in search of bargains.
