Global business data firm dunnhumby has released new insights on inflation in its latest Consumer Trends Tracker, which shows that the overwhelming majority of American consumers are struggling financially.
To create the latest report, dunnhumby surveyed 2,000 U.S. shoppers in July of 2022. The report includes several highlights that show Americans are still greatly struggling with inflation.
“Seven months ago we first reported on the mismatch between consumer sentiment and reality regarding food inflation. We now we see it’s at the highest point to date, and we are also seeing that consumers are responding by changing their shopping behavior, and perhaps most troublingly, nearly a third are cutting back or completing eliminating some meals,” said Grant Steadman, president for North America at dunnhumby. “While there are signs in parts of the economy that inflation may be dampening, that has not occurred yet for food. Retailers and manufacturers need to ensure that they are putting their customers first when they are making decisions about how to respond to persistent inflationary cost pressures.”
According to the latest dunnhumby Consumer Trends Tracker, 64% of U.S. consumers report they would have difficulty covering an unexpected expense of $400 or more, compared to 60% in April-May 2022. The study found financial insecurity lowest at 42% in Wisconsin, followed by 48% in Maryland and 52% in Washington, and highest in 77% in Louisiana and Oklahoma.
Low base prices are also important across all incomes, even among affluent shoppers, many of whom have reported switching to private brands. 73% of households with incomes above $100,000 reported that low base prices are important, an increase of 7%. Shopping at stores with low base prices is the most common shopper behavior with 59% of those surveyed reporting they do this most of the time.
To meet this need for lower prices, many consumers are shifting their spending towards the dollar channel. Since April-May 2022, dollar stores’ share of wallet has increased 2.1% (17.8% to 19.9%) while specialty / premium stores have decreased 1.1% (18.7 to 17.6%).
Consumers are also trading down in a few key categories, according to dunnhumby.. 83% of respondents are looking for cheaper alternatives to the products they usually buy in at least one category. The top three categories consumers are trading down in are packaged food (53%), common household products (52%) and frozen food (42%).