Decisions… Decisions… Decisions: Consumer Frustrations in Inflation Laden Grocery Aisles
What foods are you willing to sacrifice to make ends meet? Will steak stay on the menu? How about your favorite snack? Or that artisanal cheese and glass of wine that makes for an enjoyable evening unwind?
If you are fortunate to have the disposable income to adapt your budget to inflation, these may not be questions you’ve had to face. But, if you are middle-income, you may suddenly find yourself facing these decisions every time you go to the supermarket. And, if you are lower income, this tug-of-war to balance decisions that satisfy the family while minimizing the financial downside is a fact of life.
Today, oscillating inflation rates are forcing more and more American consumers to make trade-offs they wouldn’t have considered in the past. It’s time to build empathy with consumers who may not match your own demographics in order to get a clear picture of what’s really happening for US shoppers.
Pocketbook Issues Over Societal Challenges
Ignite 360’s Navigating to a New Normal (N2NN) study has been following US adults since April 2020 to understand the evolving values and changes in behavior due to current events. Recently, we’ve been exploring the effects of inflation and uncovered stories of the compelling trade-offs, substitutions, and sacrifices shoppers are making.
In a September quant portion of our program, we surveyed 1,500 US Adults, 18+ about their degree of concern on 25 issues ranging from their personal pocketbooks to societal challenges. The biggest concern for consumers was food prices; it had the most people, 32%, indicating they were “extremely worried” and 72% overall were somewhat or extremely worried. This was followed by gas prices (64%) and home energy prices (63%). For reference, climate change (55%), women’s health issues (50%), and inequality and/or discrimination (43%) were significantly lower in terms of the number of people worried about them.
Pocketbook issues dominated in September and still appear to today, even though the rate of inflation has dropped, consumers aren’t feeling it in the grocery aisle. In fact, The U.S. Consumer Is Starting to Freak Out as The Wall Street Journal reporters Harriet Torry and Joe Pinsker recently chronicled. And we’ve been following this ‘freak out’ with our qual participants in N2NN as well.
What does this mean in the aisles and in the checkout lines?
“We do more specific planning of meals. We don’t go out to eat as much. We question our expenditures more,” said Jen and Joe, middle-income parents of 3 in rural South Carolina during a January N2NN check-in.
To understand how different demographics of Americans have responded to inflation, we analyzed September quant survey participants by the following segments, “General population,” “Below 40K income,” and “Parents of 0-17.” The general population is indicating that they are attempting to reduce their spending overall, with 71% of respondents indicating that rising food prices are their primary concern.
Nearly half of the people with kids 0-17 living at home indicated they were reducing their spending, which is actually slightly lower than gen pop and different income groups. This is an indication of a longstanding human truth that parents wish to maintain normalcy for their kids in times of uncertainty. Though cutbacks and trade-offs are becoming a necessity for day-to-day consumption habits across the country, one thing hasn’t changed since the pandemic– the importance of family.
We see this human truth play out further with parents who are focusing their food purchasing in favor of their children's preferences. Not necessarily just as an act of love, but also to avoid wastefulness.
Brittannie, a mother of three in Kansas City, told us that most grocery decisions as of late have been geared toward her children. She highlighted the importance of ensuring the investment at the grocery store isn’t cast aside at home: “And now for sure, I asked the kids what they wanted to eat. So, I’ll give them options. I’ll be like, ‘Okay, what do you guys want?’ And I’ll look at the sale ads [and] see if I can make it happen because I don’t wanna waste - cook this meal and the kids don’t like it…”
My Perception is My Reality
Jenika, a lower middle-income mother of two with another little one on the way has taken a similar approach to Jen, Joe and Brittannie. “I’ve noticed if I’m not careful where I used to easily be able to come in [at] $200 a week on our groceries and now, basically for the same stuff, if I’m not careful – I mean, it’ll go up to $250 easily.”
Jen and Joe went on to say, “Our food costs probably are up about 30% from this time last year.” Rising food costs have become a noticeable adjustment for many families, even though the specific increase is subjective.” While a 30% increase doesn’t align to government data on increases in food prices, perception is reality for the consumer and the point is, it costs more to eat the same amount. So while the US Department of Agriculture - Economic Research Service has reported a 9.9% increase in food prices in 2022, including an 11.4% increase in grocery prices, shoppers are feeling it even more and are taking action.
While a slush fund of discretionary dollars can absorb the shockwave of inflation, for many middle-to-low-income households, that dampener isn’t sufficient. This is forcing middle and lower-income families to prioritize planning and budgeting if they hope to keep their heads above water and keep the kids from noticing the rising water.
Finding Cheaper Alternatives
In our broader September study, more than 1/3 of each audience segment reported switching to cheaper products and at least 21% have even started purchasing store brand items.
Larry, 67, retired and living in the Bay Area recounted a recent visit to Costco, where he would typically purchase ready-made salad kits but he found that “the price is so incredible that I refuse to buy it.” He, like a lot of shoppers, have been forced to find alternatives to their favorite or preferred products. Trader Joe’s has a similar product that is cheaper so he’s buying that or even DIYs it. “The other thing that I do is just buy the greens myself. I buy a bag of spinach or bag of kale or bag of romaine and just make the salad myself.” The price truly must be right and convenience is no longer a privilege that every American can afford.
For more insights and comments from consumers, check out the video above.
What does this mean for your business?
The Takeaway: Focus on Families and Price
Kid Favorites:
With spending pressures remaining top of mind in a majority of American households, it can be said that most consumers are looking for a sense of normalcy. Normalcy, not in the pre-pandemic sense, but rather in the hopes of families avoiding disappointing their children. As a brand, empathize with parents and their desire to maintain normal. Prioritize reminding parents that their children love your products even if they can only enjoy them on occasion. Although parents may not be able to purchase these products as often, the moments when luxury permits will make the occasion even more special. One way to accomplish this is to build campaigns around children's preferences to remind parents how kid-pleasing and satisfying your product is, which leads to that satisfaction of being a good parent.
Give Shoppers a Break:
Slowing inflation is a prime opportunity to lead the pack and win consumers over by passing on savings to the customer. Be the hero to provide relief to consumers. That earned loyalty will be paid back many times over. In fact, Jaewon Kang for the Wall Street Journal reported that Whole Foods is looking to suppliers to work with them in lowering prices in this recent piece: Whole Foods Asks Suppliers to Lower Price.
Let’s Make a Deal:
Middle-ground pricing strategies could be beneficial in a market where consumers are expecting to pay more for their typical day-to-day grocery shopping. Achieving a sense of normalcy through promotions and deals that deliver relief to consumers may keep them on board with your brand while simultaneously building an expectation of what regular pricing will be once inflation subsides. This can be even more of a present for shoppers who have had to trade off their favorite name brands for store brands or cheaper substitutes. Be ahead of the curve, and create a sense of normalcy for your target consumer and that will help maintain normal for your business.
I’d love to talk further about the Navigating to a New Normal program as well as empathy in and at work. Please feel free to reach out via rob@ignite-360.com and we can set up time to talk. Or you can go direct with this calendar link…
In the meantime, here are a couple other thought pieces from Navigating to a New Normal you might find interesting…
How Consumer Insourcing is Impacting You and Your Business
The Thirst for Meaningful Change
3 Easy Steps to Get People to Care About Environmental Efforts