Global data provider IRI has shared new insights on recent food inflation, leading to increased private label grocery sales.
IRI data shows that inflation has had a persistent impact on at-home food prices. Prices rose 14.4% as of July 31, 2022 compared to the same month last year. From June to July, overall prices rose 1.2%, the same percentage increase from May to June of this year. June 2022 saw food prices rise13.7% compared to the same month in 2021.
“Consumers are responding to rising prices by shopping promotions, prioritizing value options, and trading down to avoid going without,” said Krishnakumar (KK) Davey, President of Thought Leadership for CPG and Retail at IRI. “We are advising our manufacturer clients to deploy all levers of strategic revenue management, prioritize strong in-market execution, and invest in retailer partnerships to ensure that the right products are available in the right places at the right times. Additionally, retailers must have the tools to quickly adjust to changes in consumer preferences to ensure they are offering the right assortment at price points that appeal to price-sensitive shoppers as well as their most valuable customers.”
Davey delivered the keynote address at the recent Store Brand Industry Forum on Sustainability, which can be viewed on-demand here.
Categories that saw the largest price increases from June 2022 to July 2022 included refrigerated eggs (+5.9%), frozen dinners and entrees (+3.5%), butter and margarine (+3.2%), frozen pizza (+2.8%) and center store bread (+2.8%). Only two categories saw prices decrease by more than 1%: Fresh citrus fruit fell by 2.4% and bacon fell by 1.4%
As expected with ongoing inflation, private label sales increased in July 2022. Private label share grew in several categories: Fresh eggs (+6 percentage points), sugar (+5 percentage points), sour cream (+4 percentage points), shortening and oil (+3 percentage points), butter/butter blends (+3 percentage points), flour (+2 percentage points), frozen meat (+2 percentage points) and bottled water (+4 percentage points).