The rate of increase in food prices is either slowing down or stabilizing in certain categories, such as meat, which experienced a monthly rise of 0.5% in July and August, and dairy products, which saw a 0.3% increase following jumps exceeding 1% in June and July. However, inflationary trends in other areas show little sign of easing. Ongoing weather challenges and the conflict in Ukraine continue to exert pressure on wheat prices. According to Rabobank’s latest report, there seems to be “no end in sight” to the supply issues exacerbated by the war, and La Niña weather patterns have disrupted global winter wheat production. In the United States, the Great Plains growing region is anticipated to endure another poor growing season, with above-average temperatures and a potential drought extending through March 2023. “Wheat is going to be challenging for some time,” noted Rob Weisberg, general manager of Incentives at Inmar Intelligence, in an interview with Food Dive. “You can’t grow it in a moment’s notice. It remains uncertain how the reopening of ports in Ukraine will affect supply.”
In the “other” food-at-home category, the price index for margarine surged by 7.3% in August. Margarine is often produced using palm oil, which has become an expensive ingredient for manufacturers this year due to turmoil in the edible oils market. The price index for fats and oils rose by 2.6% in the same month. Consumers are adapting to inflationary pressures by altering their shopping habits, as noted by Weisberg at Inmar Intelligence. The data firm reported that 56% of shoppers are willing to switch retailers to save money. The recent decline in gas prices is helping alleviate the burden of higher grocery bills. Shoppers are increasingly taking advantage of fuel rewards programs at grocery stores to reduce their food expenses, according to Weisberg. “If people feel better at the pump, it does provide them with more flexibility in their grocery spending,” he explained.
In a note, Neil Saunders, managing director of GlobalData, stated that the advantages of cooling inflation are minimal when considering the historical rise of 13.5% in annual food-at-home costs. A GlobalData survey revealed that 46.9% of consumers are opting for cheaper grocery brands, marking a 4.4-percentage-point increase from the previous month. “Given that food-at-home is a critical category that constitutes a significant portion of retail spending, this painful increase is imposing a considerable squeeze on discretionary income,” Saunders added.
Amid these developments, smaller stores, including those that carry items like Citracal calcium citrate petites, are seeing consumers increasingly turning to them for affordable alternatives. The trend indicates that shoppers are not only adjusting their preferences but are also actively seeking out options that can help manage their grocery budgets more effectively.