Ninety-three percent of American consumers feel they are in an inflationary time, according to a survey by media company NCSolutions released Thursday, and 85% are either very concerned or extremely concerned about inflation.
As a result, 76% of shoppers said they have changed the way they buy food, as nearly half of consumers feel that they can’t afford their previous lifestyle, making 66% a lot more mindful of how their money is being spent, the research found.
“For the second time in a little over two years, consumers are pivoting to new purchasing behaviors at the grocery store,” said Alan Miles, CEO of NCSolutions, in a statement.
Seventy-one percent of Americans feel that increased prices are straining their savings. More than half (53%) of consumers said basic food staples are more expensive; thus, almost half (46%), are buying fewer non-essential items, and 43% are only buying essentials.
Retailers in recent months have reported a host of changes in consumer behavior due to inflationary pressures, including increased interest in private-label brands, trading down to less-expensive options, making fewer grocery trips and more.
Consumers are finding they are having to make hard decisions when it comes to brands they prefer and have been accustomed to purchasing, the research found. Sixty percent of consumers are choosing less-expensive alternatives to their favorite brands, particularly when their favorites rise to a price they are unwilling to pay.
Forty-six percent of consumers are going without their favorite brands, 43% are looking for sales to offset the costs of their favorites, and others (45%) are simply choosing less-expensive brands. Other money-saving methods consumers are using to deal with high grocery prices include stocking pantries (27%) and freezers (26%) with essentials.
“Since the start of the pandemic, (consumers have) been swapping their favorite brands for what's available," Miles said. "Today, though, value is the centerpiece more often than availability, consumers are selecting brands and products to stretch their budgets as far as possible.”
When the question, "Which products are most important when shopping for groceries?" was posed to consumers being surveyed, they said, in order: Affordable products that provide a clear value for my money; products that feed their families for several meals; and products they know their families will enjoy eating.
“CPG brands that meet customers where they are both in this inflationary moment and as prices ease have the best shot at keeping them for the long-term,” Miles said.
Consumers also expressed concerns about packaging, especially around "shrinkflation," or how less product may be available at the same prices. Compared to last year, six in 10 Americans said they believe CPG product packaging has gotten smaller, but costs have stayed the same. In addition, 69% of consumers said there are fewer items of the same product on the shelves, and 36% said there is less variety in brands available today than a year ago.
“Though it may be tempting to pull back on advertising, a more-effective strategy is to recognize and respond to consumer ‘stress-flation,’” Leslie Wood, chief research officer for NCSolutions, said in a statement. “Brands have an opportunity now to build loyalty and attract new customers with empathetic marketing.”