INDIANAPOLIS — Retailers across the United States are beginning to feel the jitters as consumers aren't shopping like they used to.
Now, stores are dropping prices on thousands of products.
The markdowns come after inflation pushed prices higher for the last two years, and stores are hoping to incentivize shoppers to pull out their wallets again.
In the last several weeks, a slew of retailers announced price cuts to try and bring shoppers back into stores.
"Price cuts are a proven lever to drive sales and grab attention," eMarketer senior analyst Zak Stambor said.
Michaels, the arts and crafts store with more than 1,300 stores in the U.S., announced last month it was dropping prices on 5,000 products.
During its most recent earnings call, clothing chain H&M says they believe they'll have lower prices at the end of this year than the beginning.
Stambor said the majority of the items seeing a slash in prices are considered to be discretionary purchases — things that are nice to have, but not a necessity.
"So all the categories where it's nonessential discretionary spending, retailers are having to convince consumers to open their wallets and spend, he said.
For the last year, shoppers have pulled back as costs have risen 20% to 30% higher than they were three years ago and incomes are also failing to keep up, resulting in all types of shoppers looking for deals.
"Middle income consumers have also become more mindful about where when and how they spend their money," Stambor said.
One of the hurdles for retailers is getting consumers out of that frugal mindset.
Although spending was boosted by purchases of high-ticket items and services, like cars and travel, spending on furniture, clothing and electronics remains weak.
"There's a a real battle to capture consumers attention because consumers are thinking twice about when they spend," Stambor said.