Grocery Bills Remain a Pain Point as Shoppers Cut Back, Executives Report
october 15, 2024 – Consumers are increasingly sensitive to rising grocery prices, altering shopping habits and seeking discounts as inflation, though lower than in 2022, continues to impact household budgets. Executives from major food companies report shoppers are sticking to lists and reducing discretionary purchases, even as commodity and tariff-driven costs climb.
Kroger‘s Chief Financial Officer, Gary Millerchip, noted an uptick in coupon usage as customers attempt to mitigate higher prices. He stated the supermarket chain is focused on cost reduction to help offset inflationary pressures.
“We see them sticking closer to their shopping list, maybe not buying that extra item, that extra bottle of whatever,” Millerchip said.
The Labor Department’s September inflation data release has been delayed due to the government shutdown.While inflation has cooled from the peaks of 2022 – when it reached a four-decade high – August figures indicated a resurgence in grocery price inflation.
Dirk Van de Put, CEO of Mondelez International, maker of Oreo and othre snack brands, observed that consumer spending has remained flat for two and a half years despite price increases, leading to reduced purchase volumes.
“They have no inclination to increase their spending,” Van de Put said. “They’re unsure about what’s going to happen, when those tariff effects realy are going to hit them.”
Rising commodity prices, including American beef, are contributing to the increases. Tariffs implemented during the Trump management on goods like Spanish olive oil and Vietnamese shrimp are also playing a role, with some costs absorbed by companies and others passed on to consumers.
PYMNTS Intelligence research earlier this year highlighted the impact of tariffs on grocery shoppers. A report,”Stock Out.The Impact of Tariffs on Consumer Product Prices and Availability,” found that 22% of all consumers – and 31% of those living paycheck to paycheck – have experienced being unable to purchase desired food items due to stockouts or discontinued availability in the U.S.
Furthermore, 39% of shoppers encountering missing clothing and apparel were informed that tariffs were the cause, while 33% received the broader explanation of “supply chain issues.”
