Patrick McDonough’s Post

Inflation-weary shoppers are finally cutting back on potato chips. Frito-Lay North America reports 4% drop in sales volume, warns that consumers are looking for more deals. For the past few years as prices soared, many consumers kept buying affordable treats like Doritos and Lay’s in lieu of bigger-ticket splurges such as restaurants, concerts or travel. But now, they are limiting their spending in all areas, said Jamie Caulfield, PepsiCo’s chief financial officer. Sales volume for PepsiCo’s Frito-Lay North America business dropped 4% in the latest quarter, the company said. “There is a cohort of consumers that have become more price conscious,” Caulfield said. “They’re looking for more deals to get more for their money.” The snacks-and-soda giant reported a 1% increase in revenue and 2% drop in sales volume in the June quarter globally. Sales volume for its North America beverage business fell 3%. #inflation #retail #groceryindustry PepsiCo Conagra Brands Nicholas Miller Sally Lyons Wyatt

Costco Wholesale is raising its membership fees for the first time since 2017, less than four months after Gary Millerchip took over as its finance chief. The wholesale retailer on Wednesday said that annual fees will now cost $65 up from $60 previously for U.S. and Canada Gold Star, business and business add-on members. The company is also increasing the price of its executive membership plan to $130 from $120. The reward cap will rise to $1,250 from $1,000. The company, which currently operates 882 warehouses, said the changes will be effective on Sept. 1 and affect around 52 million memberships, a little over a half of which are executive. Costco had in the past increased prices every five years or so. The most recent price increases affected 35 million members. #inflation #groceryindustry #food Sabela Ojea Gary Millerchip

Young adults are battling sticker shock at the grocery store by supersizing their groceries. They are turning to bulk purchases, splitting their food costs with friends, roommates, family and neighbors. Shoppers in their 20s and 30s are trying to fight higher prices by joining warehouse-store giants such as Costco and Sam’s Club.  Generation Z shoppers represent the fastest-growing member group at Walmart-owned Sam’s Club, a spokeswoman says. Memberships for shoppers ages 27 and under rose 63% over the past two fiscal years. Gen Z and millennials—customers 28 to 43—now make up a quarter of Sam’s Club members. This growth is partially because Gen Zers are entering adulthood but also because they are drawn to the lower per-unit food costs, says Rupesh Parikh, a senior equity research analyst for the financial-services company Oppenheimer. They also see the warehouse stores’ huge crates of tomato sauce and gargantuan packs of chicken as a way to divide and conquer. #grocery #groceryindustry Rupesh Parikh Margot Amouyal Dave Peacock Advantage Solutions

Whole Foods is cutting prices and ditching its ‘Whole Paycheck’ aura to appeal to inflation-weary shoppers. #inflation #retail #groceryindustry Phil W. wholefoodmarket

Private-label products are gaining in quality and share in the U.S., following a playbook mastered in Europe Store-brand products have long been uninspiring—cheaper knockoffs of well-known brands with names like “Toaster Treats” in place of Pop-Tarts or “Honey Nut O’s” cereal in place of Honey Nut Cheerios. That is quickly changing, though. For example, Walmart  America’s largest retailer, launched a premium food brand in late April called Bettergoods. The lineup includes adventurous flavors such as cardamom rose raspberry jam, plant-based products such as oatmilk ice cream and single-origin coffee. Grocery conglomerate Ahold Delhaize  owner of Food Lion, Stop & Shop and other chains, announced in May a target to increase the companywide share of private-label sales to 45% by 2028, from about 38% today. Ahold’s push is also about more than value alternatives: Its own-brand portfolio includes an organic line called Nature’s Promise and a premium line called Taste of Inspirations. #retail #inflation #grocey9ndustry Jinjoo Lee

Food sales contract as inflation takes a bite out of consumers’ wallets From the bakery aisle to the dairy case, and the meat counter to the ice cream freezer, surging inflation for groceries has brought about an unexpected reality: Americans are buying less food at the store. Shoppers have put billions fewer items in their grocery carts in the past few years compared with pre-pandemic levels, resorting instead to a combination of online purchases, bulk buying — and simply consuming less, especially in lower-income households. They are doing so in response to prices that have jumped for food, but also other essentials such as housing and insurance that have taken a bite out of their wallets. Producers of consumer packaged goods were able to boost revenue by raising prices during the run of high inflation in recent years. But now, even as prices have moderated, retailers and producers are rushing to reinvigorate sales volumes with markdowns and promotions. “Increased prices mean smaller basket sizes, and more consumers seeking to eliminate products they deem non-essential,” research firm NielsenIQ said in a recent analysis of sales of perishable goods.  #inflation #retail #groceryindustry #fooNielsenIQ Wilson Sinclair Nicholas Fereday Christina Hennington Gregory Meyer Rhea BasarkarOliver Roeder Rabobank https://lnkd.in/g-4_AqsF

US grocery consumers are increasingly focused on low prices while also seeking out quality products, including fresh food offerings, and a favorable shopping experience. It’s difficult for grocery retailers to do all three well. To win greater market share, they need to differentiate themselves on at least one of these fronts—and preferably more. Flight to Value. Post-COVID inflationary effects have stretched the budgets of price-conscious US consumers. The resulting search for savings means that price-competitive retailers such as mass, club, and discount stores are winning share over national grocery chains and smaller regionals. #retail #inflation @Mintel Boston Consulting Group (BCG) Jill Wang  Travis Jackson Aftab Hussain Aileen Lee Stephanie Halgren

The rate of price increases for food has subsided in recent months, according to the latest government inflation data. However, shoppers still report feeling burdened by the prices they’re seeing in the grocery store aisles. To that point, within the past few years, 80% of Americans say they’ve felt a notable increase in the cost of groceries, Intuit Credit Karma reported last month. Since the start of the pandemic, grocery prices have risen 25%, the report also found. Some consumers have had to sacrifice necessities to afford food, the personal finance company found.#inflation Michael Lasser Lorie Konish

The price of dining out jumped in May for the seventh month in a row, despite grocery prices remaining stable, according to new Consumer Price Index data released Wednesday. The price of eating food out of the house jumped by 0.4% from April to May. The biggest jump was in full service meals, which saw a 0.4% jump, while limited service meals increased only 0.2%. #inflation

Food makers are in something of an extended slump as American consumers feel increasingly pinched. Grocery sales last year were hit by the twin shocks of inflation and the expiration of pandemic-era benefits. Many had hoped that this year would mark the start of a recovery, but it hasn’t quite worked out that way. “Some of our clients are saying we should be seeing a return to growth,” said Carman Allison, vice president of global thought leadership at NielsenIQ. He noted that although inflation has slowed, food prices are merely leveling off at record levels around one-third higher than before the pandemic. What is more, consumers are now facing hefty increases in unavoidable expenses like auto insurance and shelter costs. “There has been this compound effect as it relates to inflation over the last couple of years. I kind of think of this as the inflationary ball and chain that the consumer is still carrying around,” Allison said. #inflation #groceryindustry NielsenIQ Aaron Back Carman Allison Campbell's The J.M. Smucker Co. https://lnkd.in/gpWdA8Gw