Consumers Don’t Pay Attention to Month-to-Month Grocery Inflation

Even as monthly grocery inflation eases, PYMNTS Intelligence reveals, consumers are feeling the weight of the past three years of price increases when they go to the supermarket.

By the Numbers

A PYMNTS survey of more than 2,100 U.S. consumers finds that consumers estimate that they pay 23% more at the grocery store on average than they did just a year ago, while in fact prices have risen roughly that amount in the past three years.

“The ‘good news’ that monthly CPI levels are moderating isn’t what they see day to day, so many just tune it out,” PYMNTS’ Karen Webster observed in a recent feature. “A consumer who measures the annual rate of inflation by her perception of how much more things cost uses that as a benchmark for how she measures a healthy economy.” 

The Data in Action

Indeed, food brands are seeing that even as month-to-month grocery inflation normalizes, consumers are only stepping up their budgeting behaviors. 

For instance, food giant Conagra Brands, parent company of Slim Jim, Reddi Wip, Swiss Miss and many other popular brands, shared on its recent earnings call that it is seeing consumers’ need to manage their spending take precedence over their demand for convenience, observing a shift towards cooking from scratch. 

 “Within food, convenience-oriented items — typically a top consumer priority — have lagged as shoppers have turned to more hands-on food prep to get additional bang for their buck. And as they’ve done this, not surprisingly, they have shifted from meals per one to meals per many, even if not everyone is home at the same time to eat together,” Sean Connolly, Conagra Brands’ president and CEO, said on the call.

In fact, it seems many shoppers have been cutting back altogether. Food giant Nestlé observed in a presentation last month for Bernstein’s Pan European Strategic Decisions Conference that consumers have been purchasing food and beverages less in the recent past, according to a recent report.  

“People are consuming less. Are they eating less? Are they wasting less? Are they eating more out of home? Difficult to know,” Nestlé Executive Vice President and Chief Financial Officer François-Xavier Roger said at the time.