The upcoming fall and winter holidays are highly anticipated events for most Americans. However, the soaring prices of gas, essential items, and especially groceries, threaten how we celebrate this year. As we are in the thick of inflation, consumers and retailers are challenged with how to balance expenditures versus cash flow.
As expected, retailers are honing their strategies throughout the holiday rush in light of the current economic realities. On the other hand, consumers are focused on buying food items that bring them value as they carefully recalculate how much they should spend on holiday meals and other favorites without foregoing the season’s spirit.
Thanksgiving and Christmas are around the corner. With the lingering effects of the pandemic and continuing challenges of surging prices and supply chain difficulties, will this year’s holiday season be better than the last?
Food Spending Pattern
Consumers at this time are becoming more cautious about what they buy, focusing especially on picking food items where they can save money and stretch their dollar spend. Inflation will curb holiday shopping habits as 94% of shoppers are concerned about increasing food costs according to IRI (a leading global technology, analytics, and data provider). That is why consumers buy fewer snacks/treats, eat out less, and spend more on home-based meals. With price increases, being felt in most grocery departments, traditional, fresh holiday staples are expected to be heavily affected.
Changes in Consumer Buying Behavior
Consumer concerns over rising food prices are beginning to overtake their worries about the pandemic. COVID-19’s impact on how consumers celebrate their holidays this year has become secondary to inflation to many. As consumers are expected to travel, gather, and celebrate the upcoming holidays, they are more cautious about how they spend their dollars in grocery stores. Many consumers will be shopping earlier to avoid out-of-stock shelves, looking for early deals and discounts, taking advantage of sale items, and preparing meal favorites at home.
What Can Food Retailers Do?
With the ongoing supply chain issues, and now the rising prices of foods, this year’s holiday season will be one of the most challenging that retailers have had to face. Food retailers need to be strategic with their grocery store operations, strengthening their in-store and online promotions to target high-spending consumers, and using the right merchandising strategies to attract holiday shoppers — all while they focus on saving cost and reducing energy. As retailers are aiming to increase foot traffic back to pre-pandemic levels, they need to attract customers by bringing value to what they offer this holiday season to consumers without hurting their pockets.
Successfully navigating the holidays this year will require smart planning by grocers while pulling out all the stops to make the festivities great for everyone. Although consumers are modifying their holiday shopping behaviors and budgets based on these inflationary times and realities of the economy, the fact remains that we are all very much looking forward to the holidays as a respite from the challenges we have endured the last few years.