Higher grocery prices are reshaping the American shopper. With a smaller budget due to inflation, Americans are learning to buy less, change brands and switch stores. This is in order to get the most out of their shrinking purchasing power.
Americans Implementing Shopping Strategies Due To Higher Grocery Prices
In November, grocery prices were 6.4% higher compared to year-ago levels. This is the fastest inflation rate for food prices in over a decade.
As a result, shoppers are resorting to various tricks to manage their budgets. Families are now starting to reduce the number of items they buy during a trip to the grocery store.
They’re also trading down to less-expensive brands. Often, shoppers look at grocer’s private label brands.
Additionally, some shoppers ditch their more expensive supermarkets in favor of discount stores. Many shoppers are also reducing their trips to the store.
How high are grocery prices nowadays? Ground beef prices rose nearly a percent in November compared to the previous month. A year before, ground beef prices were 13.9% cheaper.
Meanwhile, milk prices increased by 0.9% in November and 4.5% for the year. As a result, many families are also stocking up on less expensive and longer-lasting food items.
These include beans, wheat, flour, and other shelf-stable food. For now, families will utilize their stockpiles as they endure the country’s highest rate of inflation in 40 years.
Americans Switching To Cheaper Brand Food Items
Buying cheaper food is fast becoming commonplace due to higher grocery prices. A September Numerator survey studied the shopping sentiments of more than 14,000 respondents.
20% said they will switch to cheaper items if grocery prices continue to rise. 17% will switch retailers while 10% said they will buy less frequently. Only 11% of shoppers said that they will not change their buying patterns.
As grocery prices continue to rise, retailers are also feeling the pinch. 78% of the top 100 food categories reported declines in their sales. The decline happened during the four weeks ending November 28.
Higher prices do tend to lead to declines in sales volume, as the number of actual products sold decreases.
Among the food items, breakfast meats, milk, eggs, cereal, ice cream, fresh bread, seafood, and wine reported the biggest losses in sales volume.
Buyer Patterns Changing Due to Higher Prices
During the pandemic, the majority of American families received boosts in their incomes. Many companies implemented wage increases.
In addition, the federal government introduced a number of pandemic benefits that include stimulus checks, enhanced unemployment assistance, and expanded tax credits.
However, as grocery prices continue to rise, experts find a change in buying patterns.
Sprouts Farmers Market CEO Jack Sinclair was one of those who noticed the changes. He said he saw resistance from customers on the prices of premium meat cuts. “We’ve seen some trading down” on proteins, he said.
Americans Switching to Discount Stores
Before, customers responded to higher grocery prices by buying less frequently while stocking up more. Now, more customers are switching stores and patronizing discount grocers.
These include Walmart, Dollar General, Dollar Tree, Costco, Grocery Outlet, and BJ’s Wholesale Club.
More and more Americans are now trooping to save on costs in order to manage their shrinking budgets. According to Costco CFO Richard Galanti, this level of inflation “helps us a little because of the value proposition that we have.”
As customers begin feeling the effects of inflation, they will begin looking for value in their purchases. Dollar Tree CEO Michael Witynski said that outlets like Dollar Tree are ready to receive them.
Watch the CNBC news video reporting “Why Food Is Getting More Expensive In The US”
Do you agree that many Americans are changing their buying patterns due to higher grocery prices? Do you also feel the pinch of inflation in your grocery shopping?
Let us know what you think. Share your experiences in the comments section below.