High Prices for Snacks Are Pushing Shoppers Away

Despite America’s love of snack food, it seems inflation is adding just a bit too much salt for consumers’ tastes. Snack food purchases are on the downswing, according to a recent survey of 1,000 shoppers and reports from big food producers.

Research firm NIQ recently asked consumers about the snacks they are buying. Most significantly, 42% of survey participants said they aren’t buying as many snacks due to high prices.

Data analyzed by research company Circana found a 0.3% drop in both salty snacks and cookies purchased in the past year. The information suggests consumers could be spending grocery budgets on food essentials instead of minor indulgences.

“Consumers are cutting back on non-essentials and stretching the value they get out of every dollar. That’s hitting snacking,” NIQ’s vice president, Chris Costalgi, told CNN.

Major Food Brands Report Weaker Demand for Snacks

Campbell, which owns both Goldfish crackers and Synder’s of Hanover pretzels, reported a 2% decline in snack revenue in its most recent quarter. Frito-Lay parent company PepsiCo noted that “salty and savory snack categories underperformed” in its latest quarter, announcing a 3% drop in the segment. Citing “cautious” and “selective” shoppers, JM Smucker saw a 5% decrease in the snack category.

Even though the numbers seem to show Americans skipping snack time altogether, that is not necessarily the case. Many consumers are simply switching from brand-name snacks like Doritos to private-label store brands to save money.

“People still have their snacking occasions, whether they are working from home or watching a sporting event,” Melissa Myres, insights director with 84.51˚, told Store Brands. “With price the No. 1 thing they’re thinking about when shopping, consumers are also looking for options that differ from what they have been buying and are also looking for products offering a better value.”

Often referred to as “shrinkflation,” the big food companies often try cutting costs by reducing package size but still charging the same price. During times of high inflation, companies use the tactic to avoid customer backlash often received when prices are raised.

Yet, the strategy can backfire. Last year, when Pepsi tried to quietly downsize some snack packages, shoppers rebelled. The resulting negative publicity generated from customer complaints prompted the company to add 20% more chips to “bonus” bags of Ruffles and Tostitos but sell them for the same price as standard bags.