As inflation bites, new research reveals dramatic shifts in customer behaviours

A long-looming threat is now an established reality

After months of discussion about the potential consequences of skyrocketing food inflation, people around the world are finding out first-hand that the raw cost of living is now higher than it was 12 months ago – and dramatically so in some locations.

Ever eager to understand the impact of macroeconomic shifts such as these on shopper behaviours, we conducted a survey of almost 10,000 grocery customers across 25 markets in order to find out more about their response to rising inflation. In addition, using data from previous studies, we were able to chart changing behaviour over a year-long period. Here’s what we learned.

We spoke to 18,000 grocery shoppers during the last year, while inflation raged at 40-year highs, and shoppers replied with rage to match. Americans are struggling and changing behaviours to cope, and the grocery sector is once again the main stage on which these changes are playing out.

Financial worries – both personal and general – are mounting

One year ago, in a separate piece of research, we asked shoppers around the world to tell us their thoughts on both the state of their national economy, and their own personal finances. At that time, around two-thirds (63%) of those we spoke to said that they felt the economy was weak, while less than half (47%) felt the same way about their own financial situation.

Today, that outlook is far less optimistic. Fully three-quarters (75%) of respondents believe that the economy is “not so good” or “poor”, with concern about their personal finances following suit (57%). The tipping point for economic worry has been hit, with the majority of customers now holding a broadly negative perception about the state of their finances.

More than 9 out of 10 people say that food is now more expensive than a year ago

While there’s still some variation in terms of personal finance perspectives, that’s not the case when it comes to the cost of food. Shoppers hold an almost unanimous belief that they’re paying more for food than they were 12 months ago, with an overwhelming 93% stating that the cost of groceries has risen over the past year. Only 2% believe that food prices have fallen during that time.

Shoppers believe that food inflation is higher than it is – but the gap is closing

Asked how much they felt food prices had increased by, the average response was around 27% – significantly higher than the average global rate of inflation at 14%. Nonetheless, while shopper perceptions about the rising cost of food might outstrip the reality, there are clear signs that the two are coming gradually closer together.

In February, another dunnhumby study showed that shoppers felt food prices had increased by some 19% over the past year. That means that the perceived rate of inflation has increased by around 45% between then and now. The actual global rate of food inflation for countries in the study, meanwhile, has risen by 177% during that period. Shoppers may still be overestimating when it comes to rising food prices, but reality is quickly catching up.