Makena Wininger had to make some serious adjustments to deal with the rising cost of living in Tampa Bay.
She moved in with her partner’s family in Land O’ Lakes after struggling to find another affordable apartment near her job. The 25-year-old was racking up credit card debt buying gas for her new one-hour commute to Tampa. Wininger said she also changed her eating habits to save money on groceries.
“Nine months ago, I wouldn’t have stood in the aisle as long as I do now comparing prices,” Wininger said.
Tampa Bay has seen some of the biggest shifts in the cost of living nationwide during the pandemic — from skyrocketing rents to double-digit inflation. After a booming economic recovery, retail experts told the Tampa Bay Weather that consumers are affected by higher costs. Yet they still do their shopping.
“We’re focused on continuing the momentum,” said Scott Shaley, head of the Florida Retail Federation. “We came out of Covid relatively unscathed and now we see [growth] slow down this summer.
U.S. retail sales were flat in July from a month earlier, according to the Commerce Department’s latest report released Wednesday morning, but rose more than 10% from a year ago.
Inflation has been highest in areas where most people settle, according to a report by property firm Redfin, as many new residents during the pandemic have higher incomes than the local population. The Tampa Bay area saw inflation jump to 11.2% from a year ago, compared to a national average of 8.5%.
“Not everyone in the country experiences inflation in the same way,” Redfin deputy chief economist Taylor Marr said in a statement. “This is having a particularly big impact in places like Tampa and Phoenix, which are attracting the most new residents and are seeing double-digit price increases overall and even bigger increases in housing costs.”
Inflation pressures and supply chain imbalances also hit businesses, Shaley said, and prices are passed on to the consumer. While inflation in the region has slowed in the past two months (to 1.3%) from earlier highs, when inflation every two months would be the typical amount seen over a full year (2% ), it was mainly driven by lower gasoline prices while food and housing costs continued to rise.
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Rising cost pressure has fueled fears of a recession, but the National Bureau of Economic Research has yet to appeal.
The national economy as measured by gross domestic product has contracted for two straight quarters as the Federal Reserve raised interest rates to fight inflation. But a strong jobs market surprised economists, with unemployment falling to pre-pandemic levels. Florida’s unemployment rate fell to 2.8% in June, according to Bureau of Labor Statistics data, the same as January 2020. Shaley said he hopes that’s a sign that if a recession hits, it won’t be as painful.
There is also some relief for consumers, retail experts noted. Gasoline prices fell and some big box stores overstocked to avoid shortages, leading to more discounts and sales.
“There’s a disconnect right now that we’re all noticing,” said Brian Bern, general manager of retail tenant representation at Franklin Street, a Tampa-based brokerage firm. “Inflation is crazy, but consumers are still shopping.”
There are more shoppers heading to the stores, likely because there are more locals in Tampa Bay, Bern said. Some local shopping centers continue to grow while others decline. Tampa’s International Plaza saw 8.26% fewer people in the mall in July compared to a year ago, according to Franklin Street pedestrian traffic data. Foot traffic in Westfield Brandon was down 7%, while Tyrone Square in St. Petersburg increased 3% and Countryside Mall in Clearwater increased 7.1%.
While people are still shopping, the way they shop is changing.
Many customers are now more likely to experiment with other brands to seek better value, said data analyst Sean Murphy of St. Petersburg-based retail marketing firm Catalina. Even very loyal customers, whom companies generally consider reliable sales, are looking for offers elsewhere.
“We found that value seekers could account for up to 50% of sales in the most loyal customer segment. That’s a lot of buyers. said Murphy. “The concept of loyalty has been really emphasized in the changing economy.”
The store’s less expensive branded items are seeing increased sales, according to Catalina data. The same goes for prepared foods, as people avoid eating out. Sales of private label baking mixes have increased by 40%, soups by 17% and prepared foods by 12% this year.
“It’s not just one brand, but the total customer basket is also growing,” Murphy said. “Revenues aren’t growing as quickly and they’re feeling the pinch.”
Wininger, who moved from Tampa this year, said she switched from fresh produce to frozen vegetables when shopping at the grocery store. As a chef, she cooks a lot more than the average person, but said she needed to start cooking simpler. She started buying less protein and cutting out the meat from her meals at least once a week.
When Wininger first moved to Tampa in 2019 from Oklahoma, she said it wasn’t as expensive as it is today. His income does not go as far as before.
“It’s not that Tampa Bay isn’t doing well, it’s good with the stratosphere of higher income people,” Wininger said. “The lower parts of the income bracket are being forced to consolidate.”
The Tampa Bay Times has a team of reporters who focus on rising costs in our area. If you have an idea, question or story to tell, please email us at firstname.lastname@example.org.
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