Need Vs. Want: Will Consumers Stick With Netflix?
When inflation sends costs higher, consumers start thinking hard about what they're buying, and whether it's worth the expense. Items that seemed like "must-haves" when they were cheaper start looking a lot less important. Streaming services like Netflix (NASDAQ: NFLX) now risk ending up on the list of things that consumers can live without. And while the company's already facing tough challenges from increased competition, inflation could give Netflix an even harder battle.
Netflix's current dilemma rests on the gap between the things people need and the things they simply want, which economists divide into two broad sectors.
The consumer staples sector contains companies that develop or distribute products necessary for surviving (e.g., food and beverages) or living (e.g., household and personal products). Even when they get selective in inflationary times, consumers will keep purchasing bread, lightbulbs, and toilet paper.
Source Fool.com