A new survey by global intelligence company Morning Consult found that most of American consumers have changed their eating and drinking habits because of the rising costs of living.
Around eight in ten people have now cut back on their trips to restaurants and bars, and a vast majority said they have also changed their shopping habits, cutting down on meat purchases.
Others who reported changing their eating habits also said they were buying more pre-packaged or frozen food to mitigate higher costs, with over half reporting that they stopped buying organic produce.
Consumers are likely to cut their restaurant spending in response to high inflation. They have also changed their supermarket habits, according to Darren Seifer, a food and beverage industry analyst.
U.S. inflation hit a 40-year high in May with prices increasing 8.6 percent compared to last year. According to the Bureau of Labor Statistics, this means that shoppers who paid 2021 prices would have gotten 43 percent fewer eggs or 15 percent fewer oranges compared to the same time a year ago.
Consumers switching to cheaper, generic products
As inflation puts people in tougher economic times, consumers started cutting back by switching to store brands or generic products that are cheaper than name brands or preferring chicken over beef. They also tend to utilize coupons and deals more.
Analysts said that lower-income consumers are the ones most likely to trade down for cheaper products because they spend more of their budgets on food and energy, and therefore feel the impacts of the rising costs of those items more. However, rising prices have also taken a toll on middle-income consumers, as the retailers where they were likely to shop have increased prices as well.
Kassandra Martinchek, a researcher with Washington, D.C. think tank Center on Labor, Human Services and Population at the Urban Institute, said: “It’s important to keep in mind that the overall effect on the nutritional quality of inflation depends on how hard families are impacted by inflation, and how they cope.” (Related: Food inflation in the US about to reach a tipping point.)
Previous research has already shown that families cope with rising prices in ways that increase their food insecurity and decrease their nutritional intake, while some people simply reduce their food intake. Still, others would find cheaper options, like beans.
Martinchek shared testimony from her research in Arlington County, Virginia, from early 2022, that shows some residents already started feeling the struggle of making ends meet back in late 2021.
A mother of two reported that when there is not much money, they forgo things like meat, which has gone up in price. “That’s why sometimes we don’t buy meat. Instead, we make vegetable soup.”
More lower-income families will struggle with food insecurity in the summer, and numerous government aid programs such as the pandemic-era Universal School Meals program will be ending soon. (Related: Meat-eaters paying the most as food inflation soars.)
The annually-adjusted Supplemental Nutrition Assistance Program, or food stamps, might not be able to keep up with inflation.
Every year, the government adjusts the benefits and prices based on June inflation data, but this year’s rapid rise could result in insufficient adjustments. Low-income families, who rely on government programs to supplement their food budget at a time when increases have been persistent, also have fewer places to turn to.
American saving habits change with rising costs
The rising inflation also led to a significant change in the way that Americans are saving money. According to a recent survey, seven in 10 consumers said they are switching up their saving habits.
The survey also found that consumers are keeping more money in their checking accounts, and others choose riskier alternatives like cryptocurrency.
“Even if folks have been trying to change around their savings strategy, to compensate for inflation, they actually could start looking into savings accounts again as an option because rates have started going up,” Chanelle Bessett, a personal finance and banking expert said.
However, Bessette said it’s important for consumers to keep cash on hand in case of an emergency so that they know the best interest rate. She added that it is important to keep comparison shopping for the next several months if interest rates change, to make sure that they are getting the best return on money.
Visit FoodInflation.news for more updates about the rising food costs and how it is affecting Americans.
Watch the video below for a more detailed discussion about inflation concerns.
This video is from The Morgan Report channel on Brighteon.com.
More related stories: