ALEXANDRIA, Va.—Seventy-two percent of U.S. consumers intentionally took steps to save money because of inflation in May, according to a Morning Consult survey, which showed that the food and beverage industry is being impacted significantly by consumers’ cost-savings techniques.
Over half (53%) of U.S. adults said that they have changed their eating and drinking habits as a result of inflation last month. More than 8 in 10 survey respondents said that they are eating out less often, and roughly three-quarters are going to bars less often. Consumers are also purchasing less meat—72% of consumers say they are doing so, and the number rises to 81% among baby boomers. Sixty-eight percent of respondents reported that they are consuming less alcohol.
Demographics that earn less than $50,000 and who have children under 18 years old in the household are more likely to cut back on spending, with those in the Midwest the most likely to have made adjustments, and those in the Northeast being the least likely. Women are 13 percentage points more likely to have said they’ve adjusted their spending habits, which could reflect that women are more likely than men to identify as the household’s primary grocery shopper.
Health and wellness habits are decreasing with the increase in inflation—57% of respondents are buying less produce, while 52% have stopped buying organic produce. Twenty-two percent of respondents have stopped a specific diet, and that number jumps to 28% when looking at the millennial demographic.
“Despite this challenging environment, there is still opportunity to position offerings competitively. For instance, the share of consumers who say they’re buying more prepackaged or frozen food is nearly as high as the share who say they’re buying less,” writes Morning Consult. “For the 46% of consumers who are buying more, those products may offer solutions for busy days and nights as a cost savings compared with restaurant meals.”
A recent Numerator survey found that 95% of consumers report that inflation has impacted their finances, but the impact is four times greater for households that identified as “struggling.” Thirty-two percent of households identify as struggling with extremely tight finances and heavy inflation impact. Consumers expect inflation’s impact to worsen during the next few months, with 40% having this sentiment, and among struggling households, this jumps to over two-thirds (69%) of consumers.
Half of U.S. households are searching for coupons and promotions (50%) and stocking up on sale items (51%), but the top inflation reaction for struggling households is to cut back on nonessential spending (66%). Similar to Morning Consult’s survey, dining out tops the list of planned cutbacks for all consumers in the Numerator survey at 59%, followed by nonessential food (57%), apparel (54%), recreational activities (48%) and travel (42%).
However, 55% of all consumers report a somewhat or very positive outlook of the future.
With consumer shopping behaviors shifting in response to historic inflation, here’s what convenience retailers can do to combat price pressure and keep your customers’ loyalty. And here’s how inflation and the labor market are impacting small businesses.