Consumers may not be nearly as worried about the coronavirus as they were through much of 2020 and 2021, but new challenges have many staying indoors nonetheless.
The Hershey Company, parent company of its titular chocolate brand as well as a range of other popular snack and confectionery brands, shared on a call with analysts Thursday (April 28) discussing its first-quarter 2022 earnings results, that rising costs have many consumers behaving in ways that resemble their habits during quarantine.
“We’re still seeing a lot of interest in some of the at-home behaviors where people haven’t totally returned to some things like restaurants and some activities, frankly, not as much because of COVID — a little bit more because of some of the price pressure of inflation,” The Hershey Company President and CEO Michele Buck explained.
Moreover, pandemic concerns have not gone away. According to data from PYMNTS’ April study “The Digital Divide: The Key Factors That Drive Restaurant Choice,” created in collaboration with Paytronix, 34% of consumers reported they dine in restaurants less than they did before the pandemic. Additionally, the report, which drew from a survey of more than 2,600 U.S. adults, found that the share rises to 45% for consumers who remain concerned about the virus.
Read more: From Outdoor Seating to Touchless Payments, Dining Habits Are Changing
Moreover, last month, the share of consumers making purchases from restaurants fell slightly even as average spend rose, according to research from the April U.S. edition of PYMNTS’ monthly Digital Economy Payments report, “Digital Economy Payments: How Consumers Pay in the Digital World.”
See more: New Data Show Consumers Are Buying Less, Spending More and Changing Habits
The study, which drew from a March survey of more than 3,000 U.S. consumers, found that the share of respondents who reported having made a restaurant purchase dropped from 71% in February to 70% in March. In the same period, average spend slightly increased from $39 to $40.
The Hershey Company said it expects that the challenges posed by inflation will get worse in the months ahead but then will let up somewhat in the latter half of the year.
“As we look at our plan, we probably see the most pressure in quarter two, but then it begins to improve,” Steve Voskuil, senior vice president and chief financial officer at The Hershey Company, told analysts. “So, if I had to pick a quarter, I’d probably say quarter two would be the worst.”
A news release earlier this month regarding the latest data from the U.S. Bureau of Labor Statistics (BLS) Consumer Price Index (CPI) showed that in March, food away from home (i.e., grocery) prices increased 1.5% over February. Plus, they were up 10% year over year. Meanwhile, food away from home (i.e., restaurant) prices increased 0.3% over February and 6.9% over 2021. Hershey, for its part, is currently absorbing some of the input cost increases, but as the situation progresses, the company may need to pivot.
“Pricing is always part of our strategy,” said Voskuil. “We look at it all the time. We’re very sensitive to both the consumer and what’s happening from [an] input cost standpoint. And we’ll continue to look at that as we think about our plan for next year.”
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