U.S. consumers have been keenly aware of rising prices at the grocery store since late last year, but their level of inflation anxiety has escalated rapidly amid staggering climbs in gas prices and food-at-home inflation running hotter than 10%, new research from IRI finds.
Almost all consumers (95%) polled by Chicago-based IRI in May said they are concerned about rising prices, with 48% of those saying they are very concerned. More than half (55%) said they're extremely worried about higher gas prices.
And Americans' growing concern about rising prices increasingly is affecting their grocery choices, IRI found: Seventy-seven percent of consumers said they had altered their grocery purchases and/or buying behaviors in response to inflation last month. That was 6 percentage points higher than in April and 16 percentage points higher than in November.
In addition, significant shares of consumers in May reported real financial strain in their households. Nearly 4 in 10 (38%) described their financial health as strained, and 30% say they struggle to afford needed groceries. Last week, a closely watched survey of consumer sentiment from the University of Michigan found a 14% drop in consumer sentiment in May, with consumers' view of their own financial situation worsening by around 20%.
Shoppers' most popular tactics for dealing with inflation at the grocery store were looking for sales and specials (45%) and making a list and sticking to it (39%)—vs. saying yes to the impulse items they might have added to their cart without much thought a year ago.
Around 1 in 4 (24%) said they opted for private labels more often to control costs, and 23% said they purchased fewer items altogether. A desire to rein in spending affected some consumers' store choices: Sixteen percent said they shopped a wider range of stores during the month to capitalize on promotions, and 19% said they turned to dollar stores and/or low-cost grocers in an effort to save.
For retailers, May saw a continuation of recent sales trends, with volumes and unit sales in many individual categories down year over year but dollar sales up. Meat sales, for example, were down 6.1% by volume vs. a year ago and down 3.1% vs. 2019, but dollar sales were 4.5% higher than in May 2021 and nearly 22% higher than in May 2019. Once again, grab-and-go managed to buck the volumes-down-dollars-up trend, with pound sales up 2.3% year over year and dollar sales up more than 20%.