With most grocery manufacturers raising prices – and retailers increasingly passing those hikes on to consumers – U.S. grocery shoppers are exploring their in-store options, reformulating shopping lists, and opting for products on promotion, according to responses from grocery shoppers surveyed by Advantage Sales.
As grocery and other spending increases, nearly half (46%) of the 1,024 U.S. adults surveyed who identify themselves as primarily or jointly responsible for grocery shopping in their household say they are spending more money today, with nearly one-fifth saying they are spending “a lot more.”
“Over the past year, retailers avoided passing on the full extent of manufacturers’ price increases to their shoppers. But they did not expect manufacturers to make two, three, or more increases in the past two years,” said Kimberly Senter, executive vice president of analytics, insights, and intelligence at Advantage Sales.
According to Senter, research prepared by the sales agency shows that nine out of 10 manufacturers plan to raise prices this year, and half of the retailers say they will pass at least 90% of those price hikes onto the shelves. The executive warned that shoppers expect – and will see – even higher prices at checkout.
“At the same time, manufacturers have reduced their investments in promotions. Now that shoppers are turning to bargain and coupon-discounted products, it is time for brands-especially those positioning themselves as premium or indulgent-to reconsider,” Senter said.
The Advantage Sales survey highlights:
- Many shoppers are not just paying more for groceries; they are bringing home less. Nearly four in 10 are putting fewer groceries in their carts — almost one in 10 are buying “much fewer.”
- At brick-and-mortar stores, escalating prices are stifling opportunities for in-store impulse sales, as a full one-third of those who shop primarily at physical locations say rising retails have led to fewer trips to the store.
- As prices increase at the shelf, grocery shoppers are moving to channels with perceived lower prices. Nearly half are shopping more at a mass merchandiser or superstore (or website). One-third are shopping more at traditional grocery stores known for having lower prices (and their websites).
- High grocery prices are having an even more significant impact on what shoppers are buying. Almost half of the shoppers buy more items on sale or with a coupon, and nearly as many say “Not this time” to treats and indulgences. Four in 10 are choosing more store brands, and the same amount is buying the same types of products they usually do but opting for cheaper brands.
Advantage Sales, which conducted the survey, is a sales agency and business solutions provider focused on finding opportunities and increasing sales for consumer goods manufacturers, retailers, and foodservice operators in the United States and Canada.