Questions and concerns about inflation—specifically, how persistent and significant it's likely to be through the rest of the year—have crescendoed this week after the release of monthly consumer and wholesale price reports. Consumers heading to the grocery store already are bracing themselves to shell out more, a new report from market researcher IRI finds.
In IRI's June survey of primary grocery shoppers, 56% said they were somewhat concerned about food-cost inflation, and 28% said they were very concerned. Further, nearly one-third (32%) said they feel prices are much higher than before the COVID-19 pandemic, and about half (49%) said prices are somewhat higher.
Whether consumers' concern translates to shifts in purchase patterns remains to be seen: Late last month, the not-for-profit Conference Board reported that while consumers were expecting prices on goods and services to climb in the coming months, that expectation so far wasn't having a big impact on their spending plans.
But the fact that food prices are indeed moving higher—at grocery stores, restaurants and other retail venues—is without doubt. Meat and poultry prices at retail were up 4.8% in the first quarter of 2021 and 2.3% in the second quarter over already-elevated year-ago levels, IRI and 210 Analytics reported in their June sales summary. Moreover, meat and poultry prices are up 13.3% from the second quarter of 2019.
Fresh fruits, which saw a deflationary environment in most of 2020, have seen prices per pound climb since last fall, and prices in the second quarter of 2021 were up 10.2% vs. the year-ago period.
There is a growing gap, too, between dollar sales and volume sales in produce: While dollar sales for the fresh produce category are up 1.2% for the first half of 2021 over 2020, volume sales for the same period fell 4.8%.
Overall, across most grocery categories and subcategories, both dollar sales and volume sales are up vs. the prepandemic 2019 period, with dollar sales outpacing volume gains. Because food prices are rising across retail venues and at restaurants, too, IRI team lead for fresh Jonna Parker noted, buying from grocery stores and eating at home still remains competitively appealing for value-seeking, price-conscious consumers.