A new survey highlights the widening gap between consumer price expectations and the realities of rising grocery costs.
Conducted by pricing lifecycle management company Zilliant, the report reveals that two-thirds of U.S. consumers have experienced increased monthly grocery bills since August 2024, with many rejecting price hikes even when tied to production costs or supply constraints.
Rising Costs Challenge Consumer Price Expectations
The survey found that the average household spends $61.49 more monthly on groceries, a strain that 37% of consumers now deem unaffordable.
Despite these increases, only 33% of respondents believe price hikes are justified when production costs rise.
This resistance underscores a critical disconnect between market forces and consumer price expectations, creating challenges for retailers who must navigate cost pressures.
“Pricing has never been more important to businesses and consumers alike,” said Pascal Yammine, CEO of Zilliant. “This report reveals a growing tension between the realities of rising costs and what consumers believe prices should reflect.”
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Dynamic Pricing and Consumer Sentiment
Dynamic pricing—adjustments based on supply, demand, and other market variables—further complicates the issue of consumer price expectations.
Key findings from the survey include:
- 47% of consumers observed price increases for high-demand items.
- 38% associate dynamic pricing with inflated costs during supply shortages.
- 42% noted price reductions for near-expiration products.
Despite its potential benefits, dynamic pricing remains poorly understood and often perceived negatively by consumers.
Transparency Key to Addressing Consumer Price Expectations
The report highlights the importance of transparency in building trust around pricing practices.
32% of respondents cited a lack of clarity about price changes as their top concern, while nearly half (46%) indicated a preference for retailers offering personalized pricing via loyalty programs or apps.
“Retailers have an opportunity to bridge the gap between market realities and consumer price expectations by improving communication and transparency,” Yammine said.
Bridging the Gap Between Perception and Practice
The survey underscores the need for better consumer education on supply-demand dynamics.
Although 47% of shoppers experience price changes tied to demand, only 15% agree such fluctuations are warranted.
Many expect prices to remain stable, highlighting a fundamental misunderstanding of market realities.
Retailers Can Build Trust Through Transparency
To align with consumer price expectations, Zilliant recommends that grocery stores:
- Offer clear explanations for price fluctuations.
- Leverage loyalty programs and personalized discounts to ease financial strain.
- Emphasize transparency around factors like inflation, demand surges, and inventory constraints.
“As this survey shows, aligning pricing with consumer expectations and building transparency is critical in today’s volatile market. By meeting these demands, retailers can cultivate lasting customer relationships,” Yammine concluded.