Inflation, supply chain woes impact center store categories

Rising prices and the gradual return to pre-pandemic cooking habits are impacting the sales of products throughout center store.

As many consumers shift back to sourcing more of their meals from restaurants, the demand for ingredients from grocery retailers is softening. At the same time, however, rising prices could pressure some shoppers to shun dining out and instead look for cost-saving solutions at their local supermarkets.

“Our relationship with food continues to be complicated due to a host of factors, including a strained economy, a continued pandemic, ongoing supply-chain issues, adoptions of new technology, and how we hold ourselves accountable for our food choices and our overall approach to eating,” observed Leslie Sarasin, president and CEO of FMI-The Food Industry Association.

According to the “FMI U.S. Grocery Shopper Trends 2022” report, most consumers are planning their meals in advance, and meal preparation is getting faster. Of those polled, 74% said it takes less than an hour to prepare their meals, and 30% spend less than 30 minutes.

Health also remains a strong concern, though fewer customers are taking the initiative to shop that way. Twenty-eight percent of respondents said they they put a lot of effort into choosing nutritious and healthy options (versus 36% in 2021), while 48% report putting in some effort (versus 46% in 2021).

In addition, FMI found that the percentage of shoppers citing an increase in grocery spending rose from 37% in 2021 to 46% in 2022, in part reflecting elevated food inflation.

“We’re still cooking at home more than ever before, but our enthusiasm for doing so has waned to pre-pandemic levels, suggesting consumers are looking for fresh-prepared and ready-to-prep meal inspirations and solutions to address their inconsistent schedules and tightening budgets,” Sarasin explained.

Consumers look for something different

Despite difficult sales comparisons with 2021, some categories continued to show sales growth this year, according to IRI OmniMarket Total Store View to sales data for the 52 weeks through April 17. 

Energy drinks, indulgent snacks, frozen breakfast foods and self-care products were among the biggest sales gainers in the highest-volume subcategories. Health and beauty aids also were among the top gainers, including over-the-counter upper respiratory medicines, lip cosmetics, home health care kits, suntan products and hair spray. The 10 categories seeing the biggest declines included nine nonfood segments, with baking needs the only food category among the top decliners.

This year’s IRI “New Product Pacesetters” report, released in June, revealed that new food and beverage products with unique flavors are helping to “spice up” the food-at-home experience. In nonfood categories, while functionality remains supreme, consumers will likely explore new offerings. If products deliver on their original promise and offer a bit more, consumers are more likely to appreciate the value-add.

“COVID-19 generated trends that both helped and hindered growth trajectories,” according to Joan Driggs, vice president of content and thought leadership at Chicago-based IRI. “In-home stock-ups eased from 2020 levels, while concurrently, interest in new products representing beverages, frozen convenience foods, household goods and self-care resulted in healthy growth.”