Grocery shoppers’ price anxieties remain as they expect another year of inflation, PYMNTS data suggests.
The Context
Grocers have been doing everything in their power to mitigate consumers’ price concerns, leveraging data to offer targeted deals and discounts, but many shoppers are still cutting back, switching to cheaper merchants and skipping unnecessary products.
For instance, even high-income shoppers have begun turning to mega-retailer Walmart to get the foods they need. As Chief Financial Officer John Rainey stated on a recent call with analysts, “We continue to see strong share gains in grocery, with nearly half coming from higher-income households.”
In fact, a Wall Street Journal report earlier this year noted that Whole Foods Market, Amazon’s premium grocery retailer, asked suppliers in a virtual meeting to lower their wholesale prices so that the chain could reduce prices for consumers.
“We know our customers are weighing the impacts of inflationary pressure on their buying choices,” Alyssa Vescio, Whole Foods senior vice president of merchandising, center store, reportedly said in the meeting.
Whole Foods declined to comment on the report to PYMNTS.
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Snack and candy giant Mondelēz International, parent company of a wide range of popular brands including Cadbury, Oreo and Trident, pushed back on calls to lower prices around the same time, arguing that, in keeping with consumers’ predictions, inflation will only get worse.
“We are not in a situation where we can say that costs are coming down,” Mondelēz CEO Dirk Van de Put said on the call. “If anything, they’re up versus last year.”
By the Numbers
Research from PYMNTS’ latest study “Consumer Inflation Sentiment: The False Appeal of Deal-Chasing Consumers,” which draws from a February survey of more than 2,100 U.S. consumers, reveals that 70% expect to see grocery prices continue to rise over the course of the next year, a greater share than the two-thirds of consumers who said the same of retail prices.
