U.S. grocery shoppers are more confident in their ability to afford the groceries they need compared to one year ago, according to new data from FMI – The Food Industry Association reported by Food Business News.
The trade association’s “US Grocery Shopper Trends: Return to Routine” report found that 39% of shoppers said they are concerned about being able to afford the food they need, down from 42% in July/August of last year. Nearly 70% of respondents said they are very or extremely concerned with retail food inflation though, and 68% reported concerns with the prices rising for foods they prefer, up six percentage points from last year. “Across ages and income levels, shoppers report roughly the same level of concern,” FMI said. “It’s currently a broad cultural phenomenon as much as an experience of price fluctuations.”
However, consumers’ mindset on affordability may be disconnected from the reality of food price inflation. Andy Harig, vice president of tax, trade, sustainability, and policy development for FMI, explained how personal income has increased 28% on average between March of 2020 and June 2024, while the Consumer Price Index for food at home increased by nearly 25% during the same period.
Ricky Volpe, PhD, associate professor of agribusiness at California Polytechnic State University, San Luis Obispo, suggested that consumer perceptions of affordability may be due to especially volatile swings in food price inflation since the late 2000s. “The behavior of food prices in the U.S. has changed,” he said. “We’re dealing with this sort of new reality of the last 15 years or so where, on average, food price inflation has been a little bit higher year over year, and, importantly, it’s been more volatile.” Volpe also said year-over-year food price inflation is projected to reach below the historical average of 2% through the end of 2024, largely because of moderated energy and commodity prices.
“Food price inflation has moderated, it continues to moderate,” Volpe said. “It is forecasted to decrease even more going into 2025 but that doesn’t mean that we should expect food prices on average, to go down. Consumers are seeing real terms relief in their grocery spending, meaning that their dollars, their earnings, are going further in buying food. It’s not that stickers are actually going down, sticker prices aren’t going down, but food is becoming relatively cheaper in real terms.”
