More than half of consumers (54%) said that they'd cut back on desserts and candy if prices continue to rise in general.
The federal government recently reported that the Consumer Price Index increased 5.4% last month from where it was in July 2020, matching its biggest jump since 2008, and consumers are taking notice. According to Chicago data firm Numerator's Instant Survey, more than nine in 10 (95%) consumers said that they've noticed price increases in the past month.
Further, they weren't optimistic about prices coming down. Seventy-five percent of consumers expected that brands and manufacturers would raise prices if production costs go up. Nearly three in five (58%) thought that manufacturers would adjust package sizing in response, 36% expected to see fewer sales, 26% expected brands to reduce the number of products available, and 22% thought that brands would reduce product quality.
If prices indeed continue to rise in general, Numerator's survey found that consumers already know where they’ll cut back in the grocery store:
More than half of consumers (54%) said that they'd cut back on desserts and candy.
Close to half would cut back on prepared foods/deli items (47%), organic/premium items (46%) and soda/juices (45%).
Nearly one-third (31%) would cut back on alcohol; 23% on sustainable or environmentally friendly items; 23% on meat, poultry, fish/seafood; and 18% on fresh produce.
It’s not only consumers who are feeling stress about rising prices; grocers and suppliers face “unprecedented inflation” as well. The federal government reported that the food index increased 0.7% in July as five of the major grocery store food group indexes rose, with the food-at-home index increasing 2.6% over the past 12 months.
According to the Bureau of Labor Statistics, the index for meats, poultry, fish and eggs continued to increase in July. The index rose 1.5% in July, its seventh monthly increase in a row, and followed a 2.5% increase in June. The index for cereals and bakery products, which declined in June, rose 1.2% in July, its largest one-month increase since April 2020. The index for other food at home rose 0.8% in July, also the largest monthly increase since April 2020. The index for nonalcoholic beverages rose 0.7% in July, and the index for dairy and related products edged up 0.6%.
Meanwhile, Numerator’s Instant Survey found that consumers would also cut back in other areas if prices increase. The survey found that69% of consumers would reduce spend on out-of-home dining and 57% say they would cut back on out-of-home entertainment. Around half of consumers said that they'd also cut back on holiday gifts (52%) and/or upcoming holiday celebrations (46%).
Consumers were divided when it came to stockpiling in anticipation of rising prices. More than half (56%) said that they've already stocked up on products, including household goods (44%), groceries (30%), and pet care and supplies (10%).
The Numerator Instant Survey, fielded on Aug. 9 to 200 panelists from Numerator’s consumer purchase panel, was conducted to understand the impacts of inflation on consumer behavior and produce directional insights on inflation awareness and potential shifts in spending.Instant Surveys are short surveys with immediate turnaround to produce fast, directional insights.