The FINANCIAL –Even though payroll taxes were a hot button early this year, less than one-in-four households say they’ve been affected by the recent payroll tax hike, according to the Nielsen Company.
In looking at the array of rising costs, most say they’re feeling greater pain at the grocery store and gas pumps than elsewhere. Further, rising utility/energy bills and escalating health care costs are weighing on consumers more than increased payroll taxes, the Nielsen Company says.
It’s probably not a big surprise to see a diverse reaction to the higher payroll taxes from households across the income spectrum, but the lowest- and highest-income households have been less affected than the average consumer. Lower-income households have also struggled to adjust to other rising costs, as nearly seven-of-10 low-income households say they’re influenced by rising food and gas prices, compared with less than four-in-10 of the most affluent households, according to the Nielsen Company.
Rising health care costs are also affecting a disproportionate percentage of low-income households, while over half (56%) of households with incomes above $200k indicate they are not affected by these increased costs of living. Ultimately, increased costs of living lead to tighter budgets and decreased consumer spending. So in the face of rising expenses, many consumers are taking action. Four-out-of-five households say they're reducing shopping trips and conserving gas when gas prices rise; and nearly two-thirds of consumers seek deals as food prices rise. Buying fewer unnecessary things is a common tactic for coping with financial headwinds, and consumers can take this approach across most categories—gas being the main exception, according to the Nielsen Company.
Last year’s warm first quarter led to growth in warmer weather categories like lawn and garden, insecticides and repellents, ice, frozen novelties and charcoal. But with a colder, snowier climate this year, sales for those categories are off substantially, according to the Nielsen Company.
Retailers and manufacturers serving consumers feeling greater pain from financial headwinds can either sit on the sidelines and feel the pain too or take steps that align with consumer coping strategies and minimize the impact on your sales. Companies serving consumers feeling less pain shouldn’t sit idly by either. There are always ways to maximize marketplace success by closely examining the consumer base and addressing what matters most, the Nielsen Company said.
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