72% of Shoppers Are Trading Down

72% of Shoppers Are Trading Down

The penny-pinching is extending to more discretionary purchases.

Seventy-two percent of consumers plan to look for less expensive alternatives this holiday season as a result of inflation, according to a survey of 2,200 U.S. adults by Morning Consult, a research company.

That's a lot of people. 

But not me. It's because I know better.

I'm buying zero.

That's  right, zero, as in


The US Inflation Rate has hit a delightful four decade and a half high at 8.20%, compared to 8.26% last month and 5.39% last year. This is rather comfortably higher than the long term average of 3.27%. 

Meanwhile, a rocky stock market is eroding the wealth of many.

Count me in.

Not just rocky. Innovators, the long-duration stocks of companies whose cash flows are expected well into the future, have often lost as much as 70% of their value. After all, the net present value of future cash flows decreases when interest rates go up. So does the relative desirability of risk assets. 

70%, that's nothing short of a collapse. 

Add the loss of income that many are starting to experience. 

Facebook's parent, Meta Platforms, is planning to begin large-scale layoffs this week, according to people familiar with the matter, in what could be the largest round in a recent spate of tech job cuts after the industry’s rapid growth during the pandemic.

In a major revamp initiated by its new CEO, Elon Musk, Twitter has just cut half of its staff. 

That's half, as in 1/2.

I love the guy. But I'm not sure everybody's sharing the feeling right now.

And don't count on that hot pre-IPO tech, fintech, or biotech to hire anyone out of their misery. Funding has dried up. Mergers, stock and bond offerings slowed in October to their lowest level in over a decade as Fed rate hikes sucked capital out of the markets.

Food for thought then. 

With inflation at a four-decade high, consumers have been trading down to less-expensive groceries and other necessities for the better part of this year. 

Gotta eat, so I'm buying avocados.

Groceries keep going up, but avocados are down. Thank bumper crops in Mexico and a drop in demand from Europe and China, courtesy of the war in Ukraine and Covid curbs.

Guacamole anyone?