Inflation and how consumers have responded to it have dominated headlines about the retail industry in 2022—nowhere more so than in coverage of grocery retailers, as year-over-year inflation for food at home hit 10% in March and has remained in double-digits since.

But beyond griping to neighbors or on social media about higher grocery prices—and foregoing those nonessentials that they felt freer to add to baskets earlier in the pandemic, when household savings were higher and inflation was lower—consumers have made meaningful shifts in 2022 in where they’re doing their grocery shopping and how they’re deciding where to buy what.

One key change: The fresh department isn’t the destination driver—the headliner—that it was pre-pandemic, says IRI Worldwide’s Jonna Parker.

“If you’re really thinking about stretching your food dollar and you have 10 items on your list, from cookies to sandwich bread to laundry detergent, you’re immediately thinking, ‘I bet those are cheaper at a supercenter,’ or, ‘I can buy those in bulk with good quality at club stores,’” says Parker. “And then when you’re there, it’s, ‘Actually, I also need some ground beef—well, that’s here, I can just pick it up here.’”

As inflation has climbed, consumers have voted with their feet and taken more of their grocery spend to mass, supercenter and warehouse/club stores, Parker says. According to IRI data, mass and club stores’ share of consumers’ spending on fresh food has climbed 2 percentage points since 2019, with general merchandisers’ gains in fresh grocery coming at the expense of spend at traditional grocers.

It’s not that fresh is no longer a star in consumers’ mind, Parker notes—but shoppers will hold out for a good deal on items they really want, whether in produce, meat or fresh prepared foods, while buying just enough of their fresh go-tos to meet weekly needs.

Consumers’ shifts in spending and store selection put an exclamation point on the need for further innovation in the fresh perimeter, Parker suggests. When the center of the store takes center stage for shoppers and they stay for the fresh department, vs. the other way around, it becomes that much more important for retailers to differentiate their fresh offering both in terms of selection and in how items are merchandised. Because if the pandemic has taught retailers anything, it’s that what goes around, comes around.

By Christine LaFave Grace

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