Despite significant grocery inflation, experts see prices stabilizing in near future
Over the summer months, groceries have become one of the biggest victims of inflation, with prices continuing to rise. Beverages are seeing the largest impact according to Numerator, a data and tech company for market research. While spending remains elevated, optimism is at an all-time low as consumers switch to club and dollar stores to save.
“As the cost of everyday goods continues to rise, consumers are shopping around to find value,” said Eric Belcher, CEO of Numerator. “Many of these shifts, including high-income households trading down to dollar stores, are unexpected.”
Grocery inflation reached a new high of +15.1% — more than doubling since the beginning of the year.
Jill Schlesinger, CBS senior business editor, spoke to Dave Ross and Colleen O’Brien on Seattle’s Morning News about the state of the U.S. economy, believing the nation is not in as bad of shape as the public perceives.
“The economy’s not in terrible shape, it’s just that we feel rotten. So let’s make sure that we can sort of, first of all, pull that apart,” Schlesinger said. “The economy continues to grow. We had a strong jobs report on Friday. But more importantly, the U.S. economy has recovered very strongly from the COVID era, and with the Federal Reserve raising interest rates, and with the economy still strong, the dollar is the best bet. Just for those of you who thought the dollar was dead, and maybe threw all of your money into Bitcoin, you’re finding that out very quickly.”
Financial optimism was at an all-time low in early July. Less than half (47.4%) of consumers rated their financial situation as “good” or “very good,” down from 56.2% of consumers in July 2021, according to Numerator reports.
“Nobody is a bad actor in this. That’s what I want to be clear about, you can say I want to blame the Biden administration, I want to blame this, I want to blame COVID. But like, prices are higher all over the world,” Schlesinger said. “Prices at the pump are really higher primarily in this year, because of the war in Ukraine. So no one could have anticipated that. Things will start to readjust. We will go into what is a normal or historically normal economy. And it will not happen this year. It’ll probably be a year or two later.”
Ordering groceries online has been a way to not use as much gas and avoid the prices at the pump. But online grocery prices grew to +21.5% year-over-year over the last month.
For everyday grocery items, frozen meat (+28%), chips (+26%), poultry (+25%), water (+22%), and milk/milk substitutes (+17%) have seen the highest price inflation.
As of early, 23.6% of consumers claimed they did not have spare cash, a trend driven by rural, Gen Z, and low income households, according to reports published by Numerator.
“But I mean, what did we expect after going through a once-in-a-century pandemic, that things were just going to snap its fingers and everything’s gonna go back to normal? It just wouldn’t happen that way,” Schlesinger said.
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