Mentions of inflationary language on Yelp increased 4% in Q3 as compared to the previous quarter and 22% year over year (YoY), according to a publication from the business review platform.
- Food businesses and restaurants saw inflation mentions increase by 31% and 28% YoY.
- Inflation was also mentioned more in reviews for beauty services and spas, arts and entertainment businesses, nightlife and bars, and hotels and travel.
- In the Midwest, inflation was mentioned 26% more in Q3 2022 than in Q3 2021.
- In Q3 2022, consumers searched for affordable groceries 126% more YoY.
What this means: As inflation set in this summer, analysts noted a pivot away from retail and toward “experience-related” spending, according to our analyst Zak Stambor. But “inflation fatigue” has set in, according to Yelp’s report, and the ways people are willing to spend on experiences has shifted.
- The Yelp report confirms travel demand, specifically “revenge travel,” has increased, even as inflationary language in that category also went up by 10% YoY.
American Airlines had record Q3 revenues at $13.5 billion, and United Airlines’ Q3 revenues were $12.9 billion, both up around 13% over Q3 2019.
- Travel sales may be increasing, but the hit spend is taking on consumers’ wallets is not going unnoticed.
Inflation woes: Consumers are spending more to get less.
- In June, 59% of US adults said they were spending less on experiences like travel and dining out, according to Ipsos.
- People are buying less fresh meat, fish, and poultry. Consumers are also cutting back on small indulgences like desserts, soft drinks, and snacks.
What’s a brand to do? Consumers are moving from two dollar sign Yelp searches to one dollar sign alternatives, but they’re still spending money.
- Customer demographics are shifting as people seek cheaper alternatives. That’s an opportunity for affordable brands to court new buyers.
- People are still paying for experiences like restaurants and travel, even if they may be trading down. Loyalty programs like the one Delta Air Lines set up with Starbucks can help corner that spend.
- Inflation mentions are up across categories. Companies need to stand out, either with prices or with perks.
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