Shoppers choose cheaper brands to escape inflation: Breyers, not Ben & Jerry’s

An employee wears a mask as he stocks produce items at a market.
Though shoppers are choosing lower-priced options, inflation has done little to damp consumers’ appetite for either travel or goods and services.
(Brian van der Brug / Los Angeles Times)

Credit-card executives have started to see U.S. consumers shift their spending to lower-cost products as they grapple with inflation at its highest level in 40 years.

Overall volume on credit cards soared 20% to $1.1 trillion at the country’s largest lenders in the second quarter, with many of them reporting record spending for the period. Executives said the recent surge in prices has done little to damp consumers’ appetite for either travel or goods and services.

“They’re continuing to spend very rationally, they’re continuing to pay us back,” Synchrony Chief Financial Officer Brian Wenzel said in an interview, adding that rising prices seem to be leaving customers deciding, “I may not be getting Ben & Jerry’s ice cream, I may get Breyers ice cream.”


Inflation hasn’t been this high in decades. We compiled a snapshot of prices at ten grocery chains in the L.A. area. How does your local store stack up?

July 7, 2022

Before second-quarter earnings were announced, investors worried how U.S. consumers were handling myriad head winds, from including soaring inflation and rapidly rising interest rates as well as the persistent coronavirus pandemic. But, one by one this week, credit-card executives said consumers seem to be holding up well.

“While there may be clouds, they’re far enough out there,” Roger Hochschild, chief executive of Discover Financial Services, said in an interview. “Consumers in our segment remain in good shape.”

Heading into the year, U.S. consumers had amassed $2.5 trillion in excess savings, which they’ve used to continue to pay down debt and keep up with their bills. Net charge-off rates at the country’s five largest credit-card lenders dropped to an average of 1.9% in the second quarter from 2.6% a year earlier.

“I’m struck by, though, the strong starting point for consumers as we look into the potential head winds of inflation and more economic trouble,” Capital One Financial Corp. CEO Richard Fairbank said on a conference call with analysts. “I would contrast this, of course, to the Great Recession or the Great Financial Crisis, where the consumer was in a much weaker position going into that.”

American Express Co. said Friday that spending on travel and entertainment surpassed pre-pandemic levels for the first time in April, a surge that helped boost worldwide billed business to a record $340 billion in the second quarter. The firm’s shares surged as much as 7.1% in intraday trading after reporting second-quarter results and ended the day up 1.9%.

“When you look at the bookings that are further out three to six months, they’re as strong today as they were back in May,” AmEx CFO Jeff Campbell said in an interview. “The pent-up demand is not going to go away anytime soon.”