This Friday, we’ll get a fresh look at inflation data in the United States.
But I have always suggested that we look beyond the headline number – which is an average across thousands of products – and look instead for clues into how consumers are changing their behavior in response to real or perceived inflation.
These softer indicators sometimes reveal surprising ways that consumers are reorganizing the money in their wallets and resetting their priorities. Here are two recent examples since we saw the last US inflation report in September.
𝗗𝗶𝗻𝗶𝗻𝗴 𝗼𝘂𝘁 … 𝗮𝘁 𝘁𝗵𝗲 𝗴𝗿𝗼𝗰𝗲𝗿𝘆 𝘀𝘁𝗼𝗿𝗲?
The US Food Industry Association (FMI) has reported a sharp rise in spending on prepared meals from grocery stores. More than half of Americans (53%) now create their meals by combining deli-prepared options from the grocery store with items they have at home.
Who stands to lose in this trend? Casual dining restaurants.
Deli-prepared meals have evolved from a convenient grab-and-go option to a legitimate alternative to a restaurant meal, according to the FMI. Their survey said that 28% of Americans are buying prepared deli meals at the grocery store instead of going to a restaurant. That share was only 12% in 2017.
𝗥𝗲𝘃𝗶𝘃𝗶𝗻𝗴 𝗮 𝗰𝗹𝗮𝘀𝘀𝗶𝗰 “𝗵𝘆𝗯𝗿𝗶𝗱” 𝗺𝗲𝗮𝗹
Prices for food in the US are 20% higher now than in September 2021. Beef prices have risen much more over the same period and now stand at record highs.
To stretch their dollars, some consumers are returning to a throwback staple, Hamburger Helper, which first hit the grocery store shelves in the early 1970’s. Sales of the pasta-and-spice mix have risen by 14.5% this year, according to a report in the New York Times last month.
Bucking the wave of price increases and shrinkflation, the parent company Eagle Brands said it has not raised prices or changed the package sizes since it acquired the brand from General Mills in 2022.
𝗪𝗵𝗮𝘁 𝘁𝗵𝗶𝘀 𝗺𝗲𝗮𝗻𝘀 𝗳𝗼𝗿 𝗴𝗿𝗼𝗰𝗲𝗿𝘆 𝗯𝗿𝗮𝗻𝗱𝘀
As my co-author Arnab Sinha and some of our colleagues wrote last month, consumer brands now need to shift to volume-led growth.
Why? Consumers are “financially stretched, pessimistic about their current conditions, and uncertain about the future.” They are also changing their behaviors faster than most companies can keep up with conventional means.
Revenue growth management (RGM) teams need to help their brands identify and follow these shifts. Projecting yesterday’s data into tomorrow’s actions means missing opportunities. To win more missions and occasions, RGM teams need to track subtle signals from the market and identify opportunities automatically in real time. That means two things: broader deployment of AI and better collaboration so that the brands can act on those insights.
What examples of shifts in consumer behavior have you noticed?
Original article can be found here.