Less expensive cuts of meat. Fewer nonessentials. More comparison shopping and greater interest in sales and store brands. Many consumers—especially those with low to moderate incomes, are changing shopping behaviors as a result of inflationary pressures. “We are finding there is downshifting going on,” said Krishnakumar “KK” Davey, President of Client Engagement for shopper research firm IRI, in an interview with Winsight Grocery Business.
According to IRI surveys, 90% of shoppers have noticed higher prices at the grocery store and 61% have already changed buying habits as a result. In fact, consumers are more worried about rising grocery costs, the economy, and their own household finances than they are about COVID-19, according to another study. Interestingly, shoppers are so concerned about rising prices that they are even overestimating the actual inflation rate. In reality, inflationary price increases are concentrated in the fresh categories of meat, poultry and dairy.
According to the recent U.S. Food Survey, research firm Jefferies found that 80% of 1,000 consumers polled said they were concerned about inflation and looking for ways to control grocery costs. Of those, 42% said they are purchasing less expensive foods and brands, 31% are buying more products on sale, 29% are buying more store brands, 21% are buying in smaller quantities and 20% are purchasing fewer items.
What does this mean for your grocery business?
It demonstrates that optimizing your pricing strategy—and making sure it’s dynamic, nimble, and well adapted to your unique customer base—is absolutely critical. You also need to ask yourself some important questions. Are you offering shoppers ample ways to trade down or trade up when they want or need to? Are you providing value to your customer base? Is your coupon program robust and attractive to shoppers? Consumers in all income ranges are interested in money-saving offers.
How can we help?
UNFI’s Retail Pricing team can help your store(s) make sure pricing is optimized for not only your demographics but for changing times. Our pricing services are designed to help your business maximize sales and profits and are unsurpassed in the industry. More than 95% of our retail customers utilize UNFI Retail Pricing services! Tools like our Strategic Tool to Enhance Pricing (STEP) program can help you adapt to changing times and offer value to your customer base. Our Coupon Processing program takes care of your coupons for you. You’ll be able to make sure your customers get more for their dollar while you get your coupon payments faster. Let’s talk! E-mail us at [email protected] and visit our website.
