Inflation is changing the grocery shopping habits of 95% of Americans as they turn toward discount stores, cheaper private labels, and frozen foods

Advertisement
Inflation is changing the grocery shopping habits of 95% of Americans as they turn toward discount stores, cheaper private labels, and frozen foods
Business Insider/Hayley Peterson
  • Grocery inflation is at its highest point since 1979, causing shoppers to change their habits.
  • Over half of consumers say they are shopping sales and using coupons.
Advertisement

Inflation is changing everything about how Americans grocery shop, from what stores they visit to the brands they buy and how frequently they shop.

Approximately 95% of US households said they are making changes to purchasing habits to account for rising prices, according to a Numerator survey of over 10,000 consumers in April. About half of those surveyed said that in recent months they've stocked up on essentials when they were on sale, and searched for coupons and discounts. In both cases, an even higher percentage of consumers said they plan to adopt those behaviors in upcoming months.

Here are other ways Americans are shifting their shopping habits.

Grocery lists are shrinking

Grocery prices are skyrocketing at the fastest rate since 1979, and shoppers are feeling it. The rate of price increases month-to-month have increased since the beginning of 2022, and prices for food at home — a category which includes groceries — have risen 11.9% in May year-over-year, according to the Consumer Price Index. Milk and dairy prices have gone up at even faster rates, with meat and fish up 14.2% and eggs up 32.2% over May 2021.

As a result, over one-third of Numerator survey respondents said they are purchasing fewer items than they have in the past and 54% said they plan to cut spending, citing non-essential food as one of the top categories they intend to slash.

Advertisement

While households have different definitions of "non-essential," reductions often translate to trading down from pricier meats like beef to cheaper options like chicken, and buying half gallons of milk instead of full gallons.

According to a May survey from the Food Industry Association (FMI), 21% of consumers are buying less meat, and 14% are buying less produce. Some shoppers are swapping out those pricier purchases for more frozen and canned meat, they told FMI, with a higher percentage of shoppers with household income under $40,000 making the switch.

Inflation is changing the grocery shopping habits of 95% of Americans as they turn toward discount stores, cheaper private labels, and frozen foods
A Costco worker arranges meat in a display at a Costco Warehouse store March, 2, 2006 in Richmond, California. Costco Wholesale Corporation, the nation's largest warehouse club operator, reported an 11 percent increase in quarterly sales, beating second quarter estimates.Justin Sullivan/Getty

Membership clubs and discount stores are benefitting

Rising prices are pushing customers to change where they shop. Discount grocery chain Aldi is seeing "significant spikes" in traffic, the company's US vice president of national buying Scott Patton told Insider. The chain added 2.5 million new customers in May, with the greatest increases among middle-income and high-income households, Patton said. Independent foot traffic analysis from Placer.ai confirmed this growth.

Aldi's highest-growth categories reflect categories with the highest rates of inflation, meaning customers are flocking to the budget store to buy the priciest items. Aldi had lower prices than Walmart in most grocery categories, and in a recent price comparison from Insider, the discount chain won out on produce, pantry staples, and eggs. The biggest difference was in meat, with potential savings up to 60 cents per pound on some items.

Meanwhile, Sam's Club, Costco, and BJ's — which operate with membership models where customers must pay an annual fee to shop at the store — are also all having an exceptionally good year. They're benefiting from the same trends pushing customers towards discount stores like Aldi. And while membership clubs aren't up as much as Aldi, 46% of consumers told Numerator they're making fewer, bigger trips, which fits with the bulk buying nature of these stores. and 21% of grocery shoppers told FMI that they've switched to buying in bulk.

Advertisement
Inflation is changing the grocery shopping habits of 95% of Americans as they turn toward discount stores, cheaper private labels, and frozen foods
Kate Taylor/Business Insider

Private-label brands see an uptick

Many grocery shoppers are opting for the cheapest brands on shelves — 31% of consumers told Numerator they are switching to less expensive brands — which are often private-label brands sold by grocery stores.

This is showing up in data from grocery stores, too. Aldi told Insider that 90% of its offerings are private label. Walmart noted increased penetration of its private-label brands in a May earnings call. The deli, meat, and dairy sections are seeing the greatest movement into private-label brands, John Furner, CEO and president of Walmart US, told investors on the call.

And while Costco's Kirkland private-label brand is already huge, making up around a quarter of the membership club's revenue, the company reported that private-label sales were up slightly in a recent earnings call.

{{}}