RR Donnelley, a market research and communications company recently released the CPG+ Grocery Consumer Report reflecting the attitudes of consumers during the fourth quarter of 2024. The study included 1,80O0 respondents representing diverse generations and financial demographics and 254 managers affiliated to grocery retailers.
As expected, the report confirmed concern over the cost of food items with 86 percent of respondents registering “frustration” according to Beth Johnson, Director of Client Strategy for the research company who stated, “Rising prices, especially in the grocery sector are putting pressure on consumers across all income levels.” She added, “Price sensitivity is a collective concern presenting both a challenge and an opportunity for brands.”
The perception and actuality of high prices has changed consumer buying patterns. Shoppers are more inclined to take advantage of sales and are responsive to loyalty programs. An important conclusion from the responses was that a third of those surveyed have switched from name brands to private-label equivalents. Loyalty programs are favored and shoppers are making greater use of discount coupons.
The September 15th U.S. Census Bureau release of the advanced estimate of retail and food sales data for August confirmed a 0.1 percent rise from the revised July value and up 2.1 percent over 12 months. Food service prices were unchanged from July and up 2.7 percent over 12 months. Grocery store prices were down 0.6 percent from the revised July value and up 1.5 percent over the past 12-months.
The dissonance between actual price inflation and consumer perceptions is striking. Irrespective of data shoppers believe that post-COVID inflation persists that is not supported by reliable data. But then surge pricing, a tiny bit of opportunistic local price gouging and even the gyrations in retail egg prices do not help to dispel misperceptions