What trade-offs are consumers willing to make to increase their food budget?
August 24, 2022
A new survey reveals that 76% of American consumers say their family has changed the way they buy food with rising prices.
The investigation from NCSolutions, taken in mid-June, found that 43% were buying only essential groceries, given their inflation and recession problems. To offset the price hike, shoppers are looking for cheaper brands (45%) and stocking the pantry (27%) or freezer (26%).
60% plan to seek out cheaper alternatives when their favorite brands fetch a price above their budget, 46% plan to dispense with their favorite brands, and 43% seek sales to offset the cost.
Other surveys have also explored whether grocery shopping behavior would revert to patterns typically seen in tougher economic times or whether unique patterns would emerge amid the highest inflation rates in 40 years. Food-at-home prices climbed 13.1% in July on an annual basis.
“Consumer Inflation Sentiment” from PYMNTS studybased on a July survey, found that due to rising grocery prices, consumers are switching to cheaper merchants (45%) and choosing lower quality products (37%) .
A morning consultation investigation taken in June concluded that inflation causes consumers to eat out less often (84%), buy less meat (72%), buy less alcohol (68%) and avoid organic products ( 52%).
Second quarter results show food sales remain strong for Target, walmartAlbertson and grocery store with so-called bearish trading behaviors.
About the Albertsons quarterly callVivek Sankaran, CEO, said he sees two trends around inflation.
One is a consumer who “clearly downsizes” certain categories, citing rice, beans and oils. He said: “The good news is that they’re turning into a lot of our own brands on that front.”
Second, some consumers “who have money but are very value conscious” reduce their “everyday needs” but are willing to pay for certain items. He cited the strength of store-made sandwiches, convenience foods, organic meats and premium beer. Mr Sankaran said: ‘We see this behavior where people are value-conscious but are willing to spend on the things they care about.’
DISCUSSION QUESTIONS: Do you think Will grocery shopping behavior follow the patterns seen in recent downturns or will escalating food prices and other factors misalign it? How might downtrends differ from previous downturns?
“What’s different this time is the quality and variety of private labels, which have become brands in their own right.”