DISCUSSION
Do grocers have a price perception problem?
Written by George Anderson
Food prices are rising, no doubt, but apparently American consumers think they are paying way more than price tracking statistics show is the reality.
New research from dunnhumby concludes that U.S. consumers believe that the food-at-home inflation rate has risen to 22.8 percent, nearly 10 percent higher than the 13.1 percent annual rate reported by the U.S. Bureau of Labor Statistics. The currently perceived rate is 5.1 percent higher than another dunnhumby “Consumer Pulse Report” released in February.
Americans told dunnhumby that they are hurting — 64 percent say they would have trouble covering an unexpected expense of $400. That’s up from 60 percent in April and May. Fifty-five percent say they are not able to get enough of the food they want and 18 percent report not having enough to eat. Thirty-one percent of households have reduced the sizes of meals or skipped them altogether over the last 12 months because of a lack of food.
Consumers’ concern with food costs is reflected in the finding that 37 percent are checking prices online before they shop. Thirty-five percent are buying in bulk to stretch their food dollars, and the same percentage are shopping multiple stores in search of the best deal.
The report indicates that food shoppers are trading down in a variety of ways to save money. Eighty-three percent say they are looking for cheaper alternatives in at least one category of products that they buy, with packaged goods (53 percent), household products (52 percent) and frozen foods (42 percent) topping the list.
Americans also appear to be shifting more of their food dollars away from specialty/premium stores to dollar chains. Dollar stores’ share of wallet has increased 2.1 percent since April/May and specialty/premium has dropped 1.1 percent. Shoppers have also cut back on online grocery, citing delivery and picking fees as a barrier to purchase.
Consumers are asking for consistency in pricing from food stores, with 59 percent reporting that they shop at stores with low base prices. Seventy-three percent of households with incomes above $100,000 cite low base prices as important.
“While there are signs in parts of the economy that inflation may be dampening, that has not occurred yet for food. Retailers and manufacturers need to ensure that they are putting their customers first when they are making decisions about how to respond to persistent inflationary cost pressures,” said Grant Steadman, president for North America at dunnhumby, in a statement.
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