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To Counter Inflation, You’ll Need to Do More Than Switch Brands

To Counter Inflation, You’ll Need to Do More Than Switch Brands



People are starting to make bigger decisions to blunt the impact of rising prices.

The consumer-price index, which tracks what people pay for goods and services, hit 7% in December, marking its fastest pace since 1982. Initially, Americans met this increase by making simple changes at the grocery store or by cutting out some other, more common purchases.

But those small cuts are proving not to be enough lately, say economists, financial planners and consumers. Now, many are making much larger changes, such as scaling back their weddings or learning a new skill to save money.

Trading down in food or forgoing favorites that have risen in price is often one of the first places people look to save in inflationary times. When prices increased during the recession of 2008, consumers substituted higher-priced goods for cheaper options. Consumers sought sales, purchased larger sizes, used more coupons and opted for generic brands, said Aviv Nevo, now a professor at the University of Pennsylvania, and Arlene Wong, a Princeton University professor, in a 2019 research paper.

This time, however, inflation seems to be increasing quicker.

“Inflation has broadened out—it’s not just lumber and used cars anymore,” said Ted Rossman, senior industry analyst at Bankrate.

Kermit Mulkins’s personal inflation hedge: quitting his soda habit. The 43-year old art director in Tulsa, Okla., said he used to spend about $700 a year on soft drinks and bottled ice teas. Now, he estimates he’ll spend about $35 by making carafes of unsweetened tea this year.

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Harvey Yan


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