Inflation is catching up to consumers, and retailers are feeling the effects. 

Gone are the pandemic-era splurges on home goods, the promises of huge tips for service workers, and the bank accounts flush with stimulus bucks. In their place are consumer choices aimed at saving money amid sky-high inflation. 

As retailers reported quarterly earnings results over the past several weeks, they’ve highlighted some of those shifts. Here’s how shoppers have changed their habits as prices skyrocketed:

1. Shoppers are trading down to cheaper products or stores

“We do see some switching, which would include switching specifically from brands to private brands,” John Furner, CEO of Walmart US, said during the company’s first-quarter earnings call. “We see categories like deli, lunch meat, bacon, dairy, where we see customers trading.” 

This type of behavior, known as trading down, has only increased in the months since, and not just on a product-by-product basis — shoppers are also switching to value-oriented stores to save money. Chipotle has suddenly become a budget choice for rich people, higher-income shoppers have started visiting dollar stores, Molson Coors is seeing higher demand for cheaper beers like Keystone Light and Miller High Life, and McDonald’s customers have started skipping combo meals.

2. They’re spending more with credit cards — and paying them off less frequently

There’s a well-known phenomenon when the economy tightens: “Credit-card debt, delinquencies, slow pay, no pay becomes an emergent crisis,” Mark Cohen, director of retail studies at Columbia Business School, told Insider. 

Cohen described a common situation where the household bill payer will pay what they can and avoid paying what they can’t. Over time, they may stop paying altogether as other expenses remain high.

Macy’s is already seeing it happen: The company said during its second-quarter earnings call in August that it’s seeing increased balances and “early signs” of credit delinquencies and slower payment rates among its credit-card customers.

“When we look at the industry more broadly, we see that inflation is outpacing wage growth. That’s just not sustainable for the consumer,” Chief Financial Officer Adrian Mitchell said, noting that consumers are “under pressure” due to high gas prices and grocery bills.

It seems lower-income and younger shoppers are having the hardest time affording their lifestyles right now and are turning to credit cards to fill the gap — those groups saw their credit card balances increase 25% and 30% respectively last quarter, according to data from credit-score company VantageScore.

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This article was originally published on BusinessInsider on September 5, 2022.