ARLINGTON, VA. — Rising grocery store prices continue to be a major hurdle for consumers in 2023 as more than two-thirds of shoppers report they are spending more on groceries than one year ago, according to recent data from FMI – The Food Industry Association.
The association’s 2023 US Grocery Shopper Trends report also found increased food costs have become consumers’ primary concern, now ranking above gas, clothing, housing and restaurant prices.
Among shoppers who expressed concern about grocery prices, 94% said they have changed their spending habits as a result. While prices were unlikely to cause a consumer to shift entirely out of a product category, nearly 70% of consumers reported changing their meal plans or choosing an alternative item in response to increased product prices.
Just over 60% of consumers also cited comparison shopping, either online or in-person, as a popular method to get their preferred products as expenses increase. Younger shoppers were significantly more likely than older groups to change their primary stores due to higher prices, with 27% of Gen Z reporting they had changed stores versus 3% of baby boomers.
Private label offerings also have become popular amid financial pressures. Private label sales rose 11% to $229 billion in 2022, and 41% of consumers said they purchased more private brands since the pandemic began. Additionally, almost 80% of consumers already buying private label expect to purchase even more in 2023.
“Shoppers are becoming increasingly savvy, flexible, very creative and also very prudent when it comes to their food purchases,” said Steve Markenson, vice president of research and insights for FMI. “However, they’re not just focused on getting a good deal or their cheapest price, necessarily.”
Mr. Markenson explained that price and quantity historically had been the main metrics of value, but now consumers hold a nuanced perception influenced by multiple variables. The new value equation focuses on quality, along with incorporating factors like food sources, convenience, health and nutrition, freshness and sustainability. Others in the industry also have taken note of consumers’ changing definitions of value, with market research firm Innova naming it their No. 1 trend heading into 2023.
“The notion of value itself has become an increasingly more complex and subjective, even individual, calculation,” Mr. Markenson said.
The change in value proposition is largely being driven by preferences among millennial and Gen Z consumers. For instance, 52% of millennials and 42% of Gen Z shoppers are willing to buy the highest quality items regardless of price, compared to 22% of baby boomers. These younger consumers are also more concerned with ethical considerations of value than their older counterparts. Roughly half of Gen Z and millennial consumers choose to shop at stores that treat their employees fairly, versus 29% of baby boomers, and nearly 45% of the younger groups shop with sustainability in mind compared to 14% of baby boomers.
Despite these differences in value considerations, there are some common preferences among all shoppers. For example, almost 90% of shoppers said that getting good value, however they may define it, is important in their purchasing decision. Additionally, 59% of all shoppers are looking to eliminate food waste by only purchasing food they need.“Beyond the budgetary benefits of minimizing or eliminating food waste, this priority reflects greater intentionality as shoppers consider utility and trade-offs between needs and wants for both themselves and others in their households,” the report said.