Retailers

Groceries Will Cost 14% More This Year, KPMG Survey Reveals

Consumers are expecting to spend $611 a month on average—up from $532 last year
grocery checkout
Photograph: Shutterstock

The arrival of 2022 is turning out to be a boom for grocers but a bust for shoppers.

According to a consumer survey conducted by accounting firm KPMG, consumers are now facing a 22% increase in their grocery bill compared to pre-COVID-19 prices. The forecast report is based on a survey of more than 1,000 U.S. consumers.

So, what is the outlook for grocery spend this year?

Last year, COVID-19 and its ripple effects across the economy produced large shifts in consumer behaviors around food shopping and eating. And this year, shoppers will spend $79 more each month on their groceries. Consumers are expecting to “spend $611 on average in 2022, compared to $532 in 2021,” the report said.

With the at-home trend sticking in the workforce, the report finds many consumers are still able and prefer to work from home at levels much higher than pre-COVID. In fact, the report said “62% of our survey respondents stated they are able to work from home and of those, over half suggested they work from home 100% of the time.” This trend that took hold in 2021 is now here in 2022, but with higher costs to the consumer.

With rising prices being factored into their budgets, “consumers expect their grocery spend to be 14% higher year over year compared to 2021,” the report said.

The boom in online ordering of 2021 is not going to go away either, but instead will see sales steadily increase. “The most significant growth is seen with online grocery delivery, whose spike has not subsided,” the report said.

From a mobility standpoint the report does see “increases in restaurant budgets in the upcoming months” as consumers continue to venture away from home compared with last year’s “depressed” foot traffic. The report said consumers plan to eat out about 10% of the time, use pickup about 12% of the time for their meals, and about 10% on delivery services. Not surprising, in the report was the fact that “the youngest generations are eating out more and cooking at home less.”

Trying to spotlight a positive during COVID-19, the report revealed consumers chose healthier food options, with “approximately 40% of consumers saying they have substantially changed their diet over COVID-19.” The report also said that at-home menus “increased from eight to 13.”

This at-home trend creates a unique calling for the meal kit industry “as consumers will continue to require innovation in their meal planning; will continue to buy groceries online more than prior to the pandemic; and will expect more value for money in a variety of ways, most notably through loyalty programs,” the report said.

The report said “approximately 61% of consumers anticipate increased usage of meal kits in 2022. Thirty-five percent indicated they used a meal planning service in 2021—up from 25% in 2020.

One area that consumers pay close attention to is loyalty programs, The report said that 25% of consumers find their grocery retailers loyalty program extremely important and the primary reason why they shop there even for online shoppers.

As supply chain issues wreak havoc on the grocery industry, the report said “37% of customers are very concerned about grocery shortages." Slightly less is the impact of product shortages on grocery purchasing habits, which shows “35% of customers switched brands when their favorite items are out of stock,” the report said.

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