Why toothpaste choices could be a sign of a recession – as customers skimp on everyday essentials

Americans are skimping on everyday items like toothpaste and toilet paper, which is a worrying sign for the US economy and major manufacturers, financial experts have warned.

Personal hygiene products have taken a hit — with units of toothpaste, laundry detergent and toilet paper selling up three to four percent in the year through June 24, according to data from NIQ, Bloomberg reported.

Americans are also turning to cheaper brands and budget stores to fight inflation, which is a blow to manufacturing giants like Procter & Gamble and a boost to companies like Dollar General.

That’s according to the latest inflation figures from the Bureau of Labor Statistics, which were released on Wednesday as annual inflation slowed to three percent, price from personal care products is up seven percent in the past 12 months and the cost of dental, shaving and hair products increased by 8.5 percent year-on-year.

Units of toothpaste, laundry detergent and toilet paper sold fell by three to four percent in the year through June 24, according to NIQ

“People just say, ‘I’m going to buy less because it’s gotten too expensive,'” Mike Leiser of consultant Prophet told the outlet.

“We are in a very precarious position. Not only the health of the consumer, but also the health of the economy.’

Hollie Ernst, a 48-year-old single mother of two, said how she recently traded for cheaper Colgate toothpaste from Crest in the face of a looming rent increase for her Oak Park, Illinois, apartment.

A 4 oz tube of Colgate costs just $2.49 from Walgreens, while a similar sized Crest tube costs about $4.99.

She said she’s also stopped buying shaving cream — and plans to use bar soap instead — and replaced the more expensive Aveeno lotion with petroleum jelly.

“Cash doesn’t go as far as it used to,” said Ernst, who is an event coordinator at a law firm.

Even with her cuts, she said she still has to use a credit card to make ends meet. “I just accepted that it is,” she added.

Experts have also warned that changing habits could spell bad news for consumer-facing companies.

Shipment volumes are reportedly down over the past four quarters at Procter & Gamble — which makes Crest toothpaste — and Kimberly-Clark, which owns Andrex, Cottonelle, Huggies and Kleenex.

Kimberly-Clark said earlier this year it expects price increases to ease in 2023 as consumers switch to lower-priced store brands.

“You have to find a way to grow your business other than price because consumers are being tapped,” NIQ’s Carman Allison told Bloomberg.

“More people are living paycheck to paycheck.”

Purchases at budget store Dollar General rose six percent between April and June from the same period a year ago, the outlet said.

Target’s transactions, meanwhile, fell 7.2 percent over the same period, implying that consumers are increasingly turning to cheaper stores.

It comes after Costco executives warned shoppers were changing their spending habits in preparation for a recession.

One customer said she swapped toothpaste brands to save costs

Costco bosses shared insights into what their members trade in their baskets — and what gets left behind

Costco is ditching higher-end beef products and high-priced items like refrigerators and televisions to match consumer spending

CFO Richard Galanti told investors last month that shoppers at the members-only store are increasingly dropping higher-end beef products and high-priced items like refrigerators and televisions.

Instead of beef products, according to Business Insiderthey prefer cheaper meats such as chicken and pork.

Galanti said this behavior is a telltale sign that a recession is on its way, as shoppers have behaved similarly during previous economic downturns.

Experts are divided on whether the US is heading for a recession, or if it could weather the financial storm to some extent. Some have predicted that the country could slide into a ‘rolling recession’, meaning individual sectors will contract in turn rather than all at once.