June 26th, 2023, Kineree Shah
In the economic landscape, the phenomenon known as "greedflation" is gaining significant attention. This term is applied when businesses increase their prices due to inflation and do not lower them even when their costs fall, effectively locking in higher profits. It is also relevant when a company's operating costs remain steady, yet they raise their prices simply because others are doing so. To comprehend the breadth and implications of greedflation, a recent YouGov survey asked 1,191 US consumers to identify the categories in which they have noticed this phenomenon over the past six months (since January 2023).
Three in five Americans (58%) say they have observed greedflation in the food and beverage sector – the most across all categories listed. In clothing (34%), automobiles (32%), and healthcare (32%), approximately a third of consumers have perceived a persistence of high prices while a quarter have noticed it in travel (28%) and streaming subscriptions (25%). Over a fifth of consumers have detected greedflation in tech products (21%), cosmetics (20%) as well as in cell phones or network carrier services (19%). Compared to other categories Americans have noticed greedflation the least among video games and financial and investment products (12% each).
But how is this phenomenon influencing American purchasing decisions? Switching to less expensive brands or alternatives was the most common response across categories. This trend was strong among medicine and healthcare products (38%), food and beverages (37%), clothing (35%), and cosmetics (35%). In contrast, tech and cell phone services saw a little less than a third (31% each) of their consumers shifting to more economical options.
Almost a quarter of consumers who noticed greedflation in clothing, cosmetics and beauty products, healthcare, tech, and travel stopped buying certain products or services altogether (21-25%). This proportion rose slightly for automobiles (26%), streaming subscriptions (27%), and video games (29%). Consumers who observed greedflation in financial and investment products (32%) were mostly likely to cease buying them compared to other categories.
As for reducing the frequency of purchases, around a third of consumers reported doing so for cosmetics and beauty products (33%), and clothing (32%). For food and beverages, and air travel and hotels, this trend was observed among three in 10 Americans (31% each). Over a quarter (29%) of consumers who noticed greedflation in medicine and healthcare products also reported a decrease in purchasing frequency.
The percentage of Americans reporting that greedflation has not affected their purchasing habits remains small across most categories (ranging from 4% to 6%). However, one in 10 consumers who noticed greedflation in cell phone/network carrier services stated that they haven't altered their purchasing habits, emphasizing the growing significance of it in the daily lives of Americans.
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Methodology: YouGov Surveys: Serviced provide quick survey results from nationally representative or targeted audiences in multiple markets. This study was conducted online on May 2023 with a nationally representative sample of 1,191 adults in US (aged 18+ years), using a questionnaire designed by YouGov. Data figures have been weighted by age, gender, education, region, and race to be representative of all adults in the US market (18 years or older) and reflect the latest US population estimates. Learn more about YouGov Surveys: Serviced.
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