While consumers’ grocery spending habits have historically tracked with economic indicators like falling inflation and rising wages, that’s no longer the case in this current spending environment, consulting firm Acosta noted in a new report.
The price of a large basket of groceries measured by the firm increased nearly 27% between 2020 and 2026, to $366. During that same period, however, consumers’ median hourly earnings increased 29%, to nearly $31, and food inflation moderated after rapid acceleration between 2021 and 2023, underscoring consumers’ improved purchasing power since 2023, Acosta noted.
Yet consumers are still using promotions, closely scrutinizing products and showing low brand loyalty — similar to how they did in 2023, according to its report. Separate research has shown that unit sales have slowed significantly over the past year.
The results indicate that traditional economic data and models may struggle to predict consumer behavior in what Acosta called a “new affordability era.”
“Shoppers are no longer responding to rapidly changing affordability conditions,” the firm noted in its report. “Instead, they are beginning to settle into routines shaped by the lessons learned during the previous several years.”
Acosta’s report acknowledged that consumers’ spending behavior isn’t just a stubborn continuation of yearslong habits. It’s also a response to cost pressures in other areas of their lives, like healthcare and housing. Gas prices have spiked in recent months, and the national average now sits above $4 per gallon, according to AAA data.
In this environment, grocers would do well to not only address consumers’ affordability concerns but also help them feel confident in their purchases by showing them that they’re getting good quality for their money, Acosta noted.
“Affordability will always matter,” the firm said in its report. “Consumers will continue responding to changes in prices, wages and broader economic conditions. Yet the more enduring opportunity may lie in helping consumers feel confident about spending decisions regardless of the economic environment.”
Grocers seem to be hearing this message. In recent months, they’ve rolled out freshness guarantees, health initiatives and new meal offerings in addition to savings programs. Some retailers are addressing both affordability and value. Walmart recently announced a revamp of its Great Value private label brand, while grocers like Kroger have updated their loyalty programs to offer deeper rewards to frequent shoppers.
