What Consumers Really Think About Grocery Inflation
Heading into fall – which is also a high-octane political season – consumers may voice concerns about the price of groceries, but are adjusting their habits to manage their budgets, largely trust food retailers and still enjoy the shopping experience. Those are key takeaways from the latest report, "U.S. Grocery Shopper Trends: Return to Routine," conducted by FMI – The Food Industry Association and The Hartman Group.
As its title suggests, even as rhetoric about food inflation garners buzz and headlines, shoppers are settling into familiar, if tweaked, habits. For example, shoppers indicated that their average weekly household grocery spending has remained steady during the past 18 months at an average of $163 and a solid 83% believe they have at least some control over their grocery spending. Two-thirds (63%) are looking for deals, and survey respondents said are working to navigate costs by buying fewer items, buying more frozen meats and seafood, purchasing fewer organic products, buying in bulk and opting for more store brands, among other behaviors.
[RELATED: Shoppers Are Splitting the Bill When Buying in Bulk]
During a webinar that delved deeper into the report’s findings, Dr. Ricky Volpe, associate professor of agribusiness at California Polytechnic State University, put inflationary pressure into perspective with a balance of empathy and pragmatism. “Aggregated price levels almost never go down. Food inflation has moderated, continues to moderate and is forecasted to decrease even more in 2025, but that doesn’t mean that we should expect food prices to go down,” he pointed out. Although many retailers are offering deals and pledging to cut prices, he added, large-scale economic factors that drive food prices, including trucking costs and wages, aren’t likely to drive prices substantially down to previous levels.
Volpe also sought to debunk the myth of runaway food inflation that has become a flashpoint. “What’s happening now is that consumers are seeing real relief in their grocery spending – their dollar and earnings are going further in buying food. It’s not that sticker prices are going down, but food is becoming relatively cheaper in real terms,” he explained.
As for current Vice President and presidential nominee Kamala Harris’ comments about price gouging, the presenters addressed the impact of the suggestion. “The use of the term ‘price gouging’ is incredibly frustrating for us. Conflating price gouging with price increases during an inflationary period is, in our opinion, irresponsible and inaccurate,” said Andy Harig, VP of tax, trade, sustainability and policy development at FMI, during the webcast. “Our recent data show that food retailers’ (profit margin) was 1.6% for 2023 – the profit margins that people are talking about are not there.”
Retailers may be heartened that consumers don’t seem to placing a lot of blame on grocers. Although 69% of shoppers say they are very or extremely concerned with retail food inflation, they rate their primary store an 8.0 out of 10 in terms of meeting their needs. Other research conducted for FMI this year showed that grocery shopper sentiment remains at a rate of 70 out of 100, with more than half of shoppers surveyed expressing positive feelings towards grocery shopping.
“Despite declining trust in other institutions, we see trust in grocers remains particularly high,” affirmed Steve Markenson, VP of research and insights at FMI. An overwhelming 90% of shoppers trust grocers to provide them with safe food, for example.
Consumers are also interpreting the notion of value in different ways, Harig noted. “While it’s important that we never forget as an industry that our shoppers are facing unique challenges, food at home is still your best choice if you are looking for affordable ways to feed your family,” he said.
