From the Associated Press:
“Inflation has changed the way many Americans shop. Now, those changes in consumer habits are helping bring down inflation.
“Fed up with prices that remain about 19%, on average, above where they were before the pandemic, consumers are fighting back. In grocery stores, they’re shifting away from name brands to store-brand items, switching to discount stores or simply buying fewer items like snacks or gourmet foods.
“More Americans are buying used cars, too, rather than new, forcing some dealers to provide discounts on new cars again. But the growing consumer pushback to what critics condemn as price-gouging has been most evident with food as well as with consumer goods like paper towels and napkins.
“In recent months, consumer resistance has led large food companies to respond by sharply slowing their price increases from the peaks of the past three years. This doesn’t mean grocery prices will fall back to their levels of a few years ago, though with some items, including eggs, apples and milk, prices are below their peaks. But the milder increases in food prices should help further cool overall inflation, which is down sharply from a peak of 9.1% in 2022 to 3.1%.”
KC’s View:
It wasn’t that long ago that some CPG CEOs were suggesting that they could pretty much raise prices with impunity. Nice to know that this isn’t so.
In some ways, this reinforces an attitude that we’ve always talked about here on MNB – that it is critical for retailers to both act and be perceived as an advocate for the shopper, not as a sales agent for their suppliers.
Inflation will continue to be a political football. Republicans will blame Democrats. Democrats will blame the food industry. But that doesn’t help shoppers – rather, it manipulates them in search of votes.
And so, at the end of the day, it is only consumer behavior – whether it be switching to store brands or opting out of programs that abuse their privacy – that actually can change behavior.
The post Consumers Flex Their Muscles, And Some Companies Respond appeared first on MNB.
View Original Article
