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Are US Inflation Trends Reflected in SafeGraph Spend?

April 14, 2022
Garrett Hoffman and Annelise Dutcher

Inflation is a complex topic, and with inflation rising to its highest in the past 40 years in February, it’s a topic being discussed a lot. Inflation essentially means the US dollar does not hold as much value as it used to because the prices of goods and services are rising. For example, Dollar Tree raised its prices 25% back in November of 2021. Although the reasons and calculations which lead to inflation are often expertly debated, there’s one thing we know for certain - it impacts each and every consumer. 

The recent conversations around inflation led SafeGraphers to ask:

  • Is inflation being reflected in SafeGraph’s Spend data?
  • How is this impacting consumer behavior?

To find out if we could answer these questions, we used SafeGraph Spend. SafeGraph Spend is an anonymized, permissioned, and aggregated transaction dataset that allows data scientists to uncover insights on how spending at individual locations changes over time. In this article, we compare consumer spending across fast food, fuel, and furniture industries from December 2020 to February 2022 to glean whether SafeGraph Spend is signaling for inflation and how the data shows consumers are reacting to it. 

Our Analysis

Fast food prices are going up

That’s right, not even your favorite dollar menu item or late night meal special is safe from rising prices. But even with the increase in prices, does that mean consumers have stopped going to grab their staple quick bite? It appears not, their bills just got a little larger.

According to SafeGraph Spend data, the average median spend per transaction at six different fast food restaurants increased by 5% or more since January 2021. The lowest increase between the six brands was at Chipotle Mexican Grill, which showed a 4.8% increase. This increase is in tandem with rising prices over the past year and even despite possible substitutions to cheaper menu items. These learnings showed us that consumers were not changing spending habits at fast food restaurants, but their dollars also weren’t as valuable as they used to be for one transaction - a reflection of inflation.

Average median spend per transaction at fast food brands

Spending on fuel is increasing across the US

Similar to fast food, fuel is a staple good for many consumers and it is difficult, if not impossible, to ignore the soaring gas prices. However, even as prices increase, consumers are often left with no other choice than to fuel up since personal vehicles have become a modern day necessity for many. 

Across counties nationwide, SafeGraph Spend shows the average per-location median spend per transaction at gas stations is increasing. 30% of counties in January 2022, and 40% of counties in February 2022, had an average increase in median transaction price of 25% or more compared to January 2021.

median spend per transaction at gas stations

Now, you may be wondering, what are consumers not spending more on as inflation rises? Fast food and fuel are both examples of inelastic goods, in other words their price does not strongly impact their demand. More money spent on those goods means less money spent elsewhere, but where? Well, let’s take a look at an elastic good - think luxury items.

Consumers are changing their behavior

Unlike fast food or fuel, furniture can be considered a luxury good, and therefore we would expect to see a stronger demand reaction to price increases. Luxury goods have higher price elasticity of demand

As furniture and home goods prices have been going up over the past year, we’d expect consumers to be putting off furniture purchases as their disposable income decreases with inflation. Using SafeGraph Spend, we found that among US furniture store locations, there were fewer customers year-over-year in January and February 2022 compared to the previous year. In percentage terms, the median location had a year-over-year decrease in customers of 40% in January 2022 and 13% in February 2022 compared to the same month in 2021. There was even a 15% decrease in customers at the median furniture store in December 2021, as inflation was beginning to reach record highs, as compared to December 2020.

Customer count density at furniture stores

But how can we be sure this is signaling that consumers are changing behavior as a result of inflation? To be sure, we completed the same analysis using a density graph for the fast food industry.

Comparing this analysis to fast food restaurants, we don’t see the same extreme decrease in customers despite the increase in prices. We see a small decrease in customers in January, and less so in February, but these customer decreases are far smaller than that of furniture stores. In percentage terms, the median fast food location had a year-over-year decrease in customers of 19% in January 2022 and 4% in February 2022 as compared to the same month in 2021. Looking at December 2021, we see more or less the same number of customers at fast food restaurants as compared to December 2020.

This is inline with our expectations for how consumer spending behavior shifts due to inflation.

Customer count density at fast food restaurants

Our Conclusion

Did our analysis show anything groundbreakingly new? Maybe not, but it did show us that SafeGraph Spend is capturing inflation’s impact based on how we’d expect consumer spending to change as a result of this period of high inflation. For a group of data nerds, we thought this was pretty cool and hope you did too.

Download a free sample of Spend data to test out the data yourself. If you think SafeGraph Spend may be valuable for your company, reach out to our data experts to learn more and receive a personalized consultation around your use case. 

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