Americans Get Creative in Stretching Food Budgets Amid Inflation

Americans are becoming increasingly creative in their efforts to stretch their budget.

Many are also responding to inflation by just going without, Bloomberg reported Thursday (July 13).

Sean Connolly, CEO of Conagra Brands, said during an earnings call, per the report: “Importantly, where we see it, it is usually not a trade down to lower-priced alternatives within the category; rather it’s an overall category slowdown.”

The report also cited consumer data from NIQ that shows that certain grocery categories are feeling the effects of this change in behavior more than others, with overall units sold down 2% this year and the biggest declines in frozen meals, fruit juice and soup.

“We’re spending more, but we’re buying less,” Carman Allison, vice president thought leadership, North America at NIQ, said in the report. Allison added that people are likely using up the goods they already have in their home.

Connolly believes the pullback began shortly after the Easter holiday in early April. He told Bloomberg in an interview: “The consumer is very creative and very crafty in terms of finding ways to stretch their budget. One of the ways they make that happen is they just cut back temporarily on the stuff that they buy in order to be able to fund other expenses.”

The results from Conagra Brands reflect what many consumer-focused companies have been experiencing; with a 7.7% drop in volume in the quarter ended May 28, yet revenue increasing by 2.2% due to higher prices, according to the report.

PYMNTS research has found that as food prices continue to rise, consumers are doing everything in their power to save where they can.

One of their strategies is cutting back. Fifty-seven percent of consumers surveyed by PYMNTS in April reported having cut down on nonessential grocery spending, according to “Consumer Inflation Sentiment Report: Consumers Cut Back By Trading Down.”

The report also found that 36% of grocery shoppers purchase cheaper alternatives of the same products. Some of the top grocery categories where consumers have started seeking cheaper alternatives include snacks, housekeeping supplies and personal care products; 32%, 35% and 33% of these shoppers have switched to less expensive versions, respectively.