CHICAGO — Circana, formerly IRI and The NPD Group, released its April Consumer Price Index (CPI), which revealed that while inflation rose 4.9% less than a year ago, food prices increased 7.7% between April 2022 and April 2023. Adding to the impact of high food prices are other economic factors such as increased consumer credit debt, depletion of pandemic-era savings and cutbacks on pandemic-related government credit and subsidies.
As a way to manage their food spending, US consumers are shopping at value retailers, spending less on non-food items, switching to store brands and cancelling recurring expenses such as subscriptions.
“Consumers need to eat no matter what and will adapt to higher food costs by finding lower cost options or cutting back on discretionary spending, and that’s what we’re seeing play out now,” said Darren Seifer, food and beverage industry analyst at Circana.
According to the CPI report, 78% of consumers plan to or already have reduced their spending, and 75% of those people say their reason for reducing spending is higher food costs.
In terms of food and beverage sales, revenue went up by 6%, but unit sales fell by 2%. With 86% of annual eating occasions being sourced from grocers and other retail outlets, this reflects that at-home spending remains a more significant portion, 60%, of food and beverage sales.
