Rising Prices Have 3/4ths of Americans Changing Grocery Buying Habits
Nearly half of Americans (45%) believe that they can’t afford their previous lifestyle and 76% said that they’ve changed how they buy food in response to rising prices. Further, two-thirds (66%) are more mindful of how they’re spending their money. These findings are part of a recent consumer sentiment survey on inflation commissioned by NCSolutions (NCS), a company that aims to improve advertising effectiveness.
Eighty-five percent of Americans are very or extremely concerned about inflation, with almost unanimously (93%) saying that this is an inflationary time. In the same vein, more than half (57%) are worried about the country's financial situation, while 47% said they’re preoccupied by their family’s financial situation. Eight out of 10 (83%) of Americans anticipate that the cost of living will grow somewhat more or much more expensive in the coming year, while 65% agreed with the statement “My income has not increased as fast at the cost of food, beverage and personal care products.”
[Read more: "Retail and Inflation: Shopper Behavior at the (New) Shelf"]
“For the second time in a little over two years, consumers are pivoting to new purchasing behaviors at the grocery store,” observed Alan Miles, CEO of New York-based NCSolutions. “Since the start of the pandemic, they’ve been swapping their favorite brands for what’s available. Today, though, value is the centerpiece more often than availability, [and] consumers are selecting brands and products to stretch their budgets as far as possible. CPG brands that meet customers where they are both in this inflationary moment and as prices ease have the best shot at keeping them for the long term.”
NCSolutions’ proprietary purchase data, which reflects the buying trends of consumers regarding CPG products, revealed a nearly 13% price increase on average. In a six-year price trend analysis, the company found that price increases in 2022 are pacing at an accelerated rate compared with other years. The survey findings affirmed this, with 58% of consumers believing that the cost of living will be much higher in the coming year and 71% feeling that the U.S. economy is in decline.
On a CPG category level, there were wide variations in percentage rises (see image above).
Compared with a year ago, six in 10 Americans believe that CPG product packaging has grown smaller but costs the same. Consumers are still experiencing the effects of supply chain issues, with 69% saying that there are fewer items of the same product on the shelves. Thirty-six percent said that there’s less variety of brands available on shelves currently, versus a year ago.
More than half (53%) of U.S. consumers said that they find basic food staples more expensive; 40% believe a recession will happen in 2023. For almost half of consumers (46%), this translates to buying fewer nonessentials in grocery stores, while for 43%, it means buying just the essentials. Seventy-one percent said that the higher price of groceries is denting their savings. For other American consumers, rising grocery prices have led to seeking out less expensive brands (45%). Other ways that consumers are dealing with higher grocery prices are loading up the pantry (27%) or freezer (26%), or shopping closer to home (24%).
Consumers have had to make difficult choices in relation to their preferred brands. Selecting various ways they react, 60% of those surveyed said that they look for less expensive alternatives when their favorite brands reach a price beyond their budget, 46% consumers plan to go without their favorite brands, and 43% hunt for sales to offset the cost.
“Though it may be tempting to pull back on advertising, a more effective strategy is to recognize and respond to consumer ‘stress-flation,’” noted NCSolutions Chief Research Officer Leslie Wood. “Brands have an opportunity now to build loyalty and attract new customers with empathetic marketing. We’re heading into a period of heavy CPG purchasing moments, such as back-to-school and the approaching holidays. Compelling, well-targeted advertising is a proven strategy for increasing brand equity and sales both in the short and long term.”
Survey respondents were asked, “When shopping for groceries, which products are most important?” The majority ranked:
- Affordable products that provide a clear value for money
- Finding food products that feed their families for several meals
- Products they know their families will enjoy eating
The online survey of 2,141 respondents was fielded June 17-20. Responses were weighted by location, education, income and other demographics to be representative of the overall population.
