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11/22/2021

Study shows inflation impacts grocery more than other categories

A new study from data group Numerator has tracked inflation over five categories, with the grocery sector being hit the hardest compared to last year.
Zachary Russell
Associate Editor
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According to a study from Chicago-based data firm Numerator, inflation is having a large impact on the price of most items ahead of the holidays. The new study of over 14,000 consumers provides insight into the rising prices in online, mass, food, dollar, and club channels and how consumers are responding.

Of the five tracked channels, grocery saw the highest price increases.The average price consumers paid for a single grocery item was up 7.1% in October vs. year ago and up 11.6% vs. 2019. Grocery is followed by health and beauty (+5.7%), baby (+4.0%), household goods (+3.7%), and pet (+1.5%). Ahead of Thanksgiving, inflation and supply chain challenges have already led to an increase in basic item prices, as well as shortages.

Grocery price increases are concentrated in mass, food and dollar channels. Price increases were most significant in mass (+8.0%), food (+7.7%) and dollar (+7.7%) channels, compared to club (+4.9%) and online (+3.8%).

Numerator’s data shows that consumers are already changing their buying habits in search of lower prices. Nearly nine in 10 consumers plan to change their buying behavior if prices continue to rise, while 11% of respondents claim that they will not make any adjustments to their shopping habits. One in five consumers (20%) plan to switch to cheaper brands, and 17% plan to shop at different retailers, two motivations that could increase own brand sales.

One in 10 of those surveyed will stop buying certain products due to inflation, while nearly one in five (17%) will wait to buy on promotion or with coupons. Many consumers will make cutbacks by switching package size or buying less frequently, with 8% planning to buy in bulk, 7% planning to buy smaller package sizes, and 10% saying they will buy less often. 

On average, one in five consumers (21%) say their buying behaviors for health and beauty, pet food, and baby and toddler products will not change if prices rise, and only 2% say they would stop buying. Gifts and durable goods are the most vulnerable to behavioral shifts due to inflation, especially during the holiday season. On average, 14% of toys, apparel, electronics, and home and garden shoppers say they will stop buying the category if inflation continues.

 Finally, when it comes to top retailers, it’s clear that shoppers value different things. Target, Amazon and Costco shoppers are the most likely to say they will not change their buying behavior in response to rising prices (Index 112, 108, 104, respectively, vs. all shoppers). Dollar Tree, Sam’s Club and Walmart shoppers are the least likely to keep shopping normally as they see prices rise (Index 73, 76, 89, respectively).

Target and Dollar Tree shoppers indicate the highest likelihood of shopping around for better prices (Index 108, 104, respectively), while Walmart and Sam’s Club buyers are the least likely to respond with promotion-seeking behaviors (Index 84, 87, respectively). Lastly, Sam’s Club shoppers are significantly more likely than Costco shoppers to say they will respond by buying more in bulk (Index 134 vs 106).