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Grocery prices prompt 'trading down' to cheaper alternatives, more awareness of food waste

Brooks Johnson, Star Tribune on

Published in Business News

More grocery shoppers are turning to store brands and frozen food as inflation forces cost-cutting and a drive to reduce personal food waste, recent surveys show.

A new Deloitte poll found more than a third of shoppers — and nearly half of rural consumers — are regularly "trading down" from name brands to less expensive private label alternatives. Private label is industry parlance for store brands, such as Target's Good & Gather, Walmart's Great Value and Whole Foods' 365.

"As price has increased in importance, people are making significant tradeoffs," said Barb Renner, vice chair and U.S. leader of Consumer Products for Deloitte. "People like to feel comfortable they can meet their family needs."

Another consumer survey from Bernstein, an investment research firm, showed 70% of shoppers are at least choosing store brands more often than they were a year ago, and many said higher prices on energy and goods outside groceries are driving those decisions.

"This is in stark contrast to a year ago when only 18% of respondents claimed to be purchasing more store brands, likely due to stimulus payments and pandemic-related savings in discretionary spending," Bernstein analyst Alexia Howard wrote. "The switch to private label is happening across all income brackets."

Jarred and canned goods, frozen vegetables and pasta are seeing the biggest private label gains, Bernstein's survey showed.

 

Food waste has become increasingly important as consumers stretch budgets and try to use all they buy.

"The focus on not throwing out food has been an interesting shift," Renner said, and it has given frozen food a new shine.

A report from the American Frozen Food Institute last week found, "79% of consumers believe frozen foods are cost-effective," even as prices on frozen options have increased faster than food overall.

As of August, grocery prices have risen 13.5% over the past year. Even amid higher prices, the Deloitte and Bernstein surveys both found consumers are still demanding health and wellness benefits from their food.

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