ALEXANDRIA, Va.—Inflation tops Americans’ list of the biggest problems facing the country, with 7 in 10 Americans saying inflation is a very big problem for the country, followed by the affordability of health care (55%) and violent crime (54%), according to Pew Research.
The consumer price index for food at home rose 10% between March 2021 and March 2022, and 7 in 10 consumers said they intentionally took steps to save money as a result of rising inflation in April, according to a Morning Consult poll.
However, despite higher prices, consumers’ reported grocery spending was 1.5% lower in March than it was the same month a year ago, and Morning Consult says that grocery demand is relatively inelastic, but higher prices are driving more consumers to opt for less costly alternatives, such as generic or store brands instead of name brands. Last month, 43% of consumers reported buying generic brands to save money, up from 36% in October 2021, when Morning Consult began tracking.
Slightly over half (51%) of those polled said they compare prices to save money (up 5 percentage points from October). Around 3 in 10 said they often use coupons, while 25% often shop at multiple stores, and 19% said they often buy fewer items overall. The amount of people who said that a sale encouraged them to purchase items they originally didn’t intend to buy increased from 49% to 55% between October and March.
Supply chain disruptions also are likely contributing to lower purchasing, according to Morning Consult, with 61% of those polled, who shopped for groceries in April, said they had difficulty finding certain items.
“Grocery spending is relatively insulated from drastic cuts, but that doesn’t mean consumers won’t change their purchasing patterns within the supermarket,” writes Morning Consult. “Economic headwinds, including elevated prices and declining consumer confidence, will continue to force tough budget choices upon consumers, as these indicators don’t appear to be turning around any time soon.
This can create opportunities for brands—especially store brands—to connect with consumers.”
Gas prices are not letting up either, causing even more stress on Americans’ wallets. The national average cost for regular gas is steadily climbing, with the national average for a gallon of gasoline now $4.52, reports AAA, which is 44 cents more than a month ago, and $1.47 more than a year ago. The increase is primarily due to the high cost of crude oil, which is hovering near $110 a barrel.
“The high cost of oil, the key ingredient in gasoline, is driving these high pump prices for consumers,” said Andrew Gross, AAA spokesperson, in a news release. “Even the annual seasonal demand dip for gasoline during the lull between spring break and Memorial Day, which would normally help lower prices, is having no effect this year.”
According to new data from the Energy Information Administration, total domestic gasoline stocks decreased by 3.6 million barrels of crude oil to 225 million barrels last week. Gasoline demand also decreased slightly from 8.86 million barrels per day to 8.7 million. Typically, lower demand would put downward pressure on pump prices. However, crude prices remain volatile, and as they surge, pump prices follow suit. Pump prices will likely face upward pressure as oil prices stay above $105 per barrel.
Meanwhile, the switch to the more expensive summer blend of gasoline, which usually adds seven to 10 cents per gallon depending on the market, is happening now. This switchover should be complete nationwide by early June.