Grocery inflation has hit a record high, but healthy and beauty products are seeing price stabilization.
Data and tech company Numerator has taken a pulse on grocery inflation, and found that it climbed to record highs in May. For the four-week period ending May 29, grocery prices were up 14.6% compared to the year prior, growing from 12.1% in early May.
This represents the steepest increase in grocery prices seen since tracking began one year ago. Prices on health and beauty products, however, are showing signs of stabilization, while household item prices were up 15.7% over the previous year, surpassing a previous high of 14.5% in February 2022.
“As inflation puts pressure on household budgets, consumers are changing behaviors by the day,” said Eric Belcher, CEO of Chicago-based Numerator. “With a faster, more holistic view of grocery inflation than has traditionally been available, Numerator provides brands the data they need to quickly react to shifting behaviors.”
For the period covered, online grocery saw the sharpest increase at 22.5%, followed by the dollar channel at 19.5%. Club stores, on the other hand, have seen stable inflation rates between 6.9% and 8.2% over the previous year.
May also saw high-income shoppers overtake low-income shoppers in terms of inflationary impact. Middle-income households are paying more than any other income group at 15.2% over the year before. Gen Z is the age demographic with the highest inflation rates, growing from 14.3% at the beginning of the month to +19.8% at the end of May.
Unsurprisingly, as inflation increases, financial confidence is seeing a steady decrease. Only 35.5% of Gen Z consumers reported their financial situation as “good” or “very good,” while 24% of urban consumers said they did not have extra cash in early June. Additionally, all ethnic minority groups saw upticks in financial insecurity, with 25.8% of Asian consumers reporting no spare cash.
Consumers are proving to be adaptable and nimble in the face of high grocery prices. A recent report from FMI - The Food Industry Association found that 86% of shoppers that are concerned about rising food prices are changing how they shop. Some 51% are looking for more deals, 35% are switching to store brands, 21% are buying less fresh meat and seafood, and 14% are buying less fresh produce.