New Data Reveals Link Between Rising Grocery Prices, Mental Stress

As rising grocery prices continue to put the squeeze on consumers’ wallets, a new survey by Vericast finds that 50% of all consumers and 64% of millennials indicate that making spending decisions along with rising prices due to inflation is taking a toll on their mental health. More than a quarter also agree that inflation is also influencing their decision to seek appropriate care.

For the study, marketing solutions company Vericast surveyed 1,000 U.S. adults to assess consumer behavior changes during inflationary times. The company found that trying to make money last is weighing heavily, with 70% of respondents saying paying bills on time and purchasing necessities like food are challenging stress levels.

In March, consumer sentiment hit its lowest-ever levels in the past decade—59.4 on a 100-point scale, according to the University of Michigan’s latest consumer sentiment index.

And as part of its monthly survey, IRI asked shoppers about their sentiment of rising food costs. And with inflation at record highs, IRI said it's no surprise that 95% of shoppers are concerned about food cost and inflation. 

“The majority of consumers view grocery shopping as a necessity. When financial stress impacts consumers such as loss wages or, in the current economic climate, higher prices, consumers become stressed between wanting to feed themselves and their families as well as worrying about how they are going to make ends meet,” Dave Cesaro, retail and consumer behavior expert at Vericast said.

In its findings, Vericast reported that 60% of respondents found rising prices and interest rates have decreased their confidence to be able to pay monthly bills on time and for necessities such as food.

These concerns are prompting consumers to look for coupons to lesson food costs; Vericast reported that 88% of shoppers say coupons or discounts motivate them to buy something from a brand or store they haven’t shopped at before. “Coupons and discounts, especially for the items you need to buy, like groceries, are the primary way consumers look to save during financially difficult times,” Cesaro said, pointing out that the benefits of coupons are not only for the wallet, but reduces stress levels as well.

“A coupon or a discount is a great motivator for our left brain. It helps convince the other half that the risk isn’t that great. Researchers from Claremont Graduate University's Center for Neuroeconomic Studies have discovered evidence to suggest that coupons can help make shoppers happy and relaxed. The data shows that coupons make consumers happier and more relaxed, underscoring that coupons and savings help people relieve stress when shopping,” Cesaro said.

With ongoing challenges from higher operational costs, talent shortages and supply chain issues, companies are facing pressure from many directions. To support both short- and long-term growth amid these hurdles, Vericast said brands should prioritize staying top-of-mind with consumers in the moments that matter.

Offering deals keeps brands in consideration but targeting those deals at the right audience interests—as well as aligning them with product availability—is more important than ever, Vericast said.

“Our survey results reveal opportunities for brands and marketers to better engage with consumers by helping them tackle financial challenges during inflationary times,” Cesaro said. “As the dollar shrinks, consumers are getting smarter with money. Brands can build credibility and stand out among competitors by offering value in the form of discounts and deals, which can help consumers feel more in control of their mental, physical, and financial health given the fatigue of the past two years.”  

Consumers are also turning to private-label brands to lesson grocery spend. According to a report done for Private Label Manufacturers Association by IRI, private labels increased to $199 billion in 2021.

When it comes to private label, Vericast found that 72% of respondents report they are buying more store or private-label brand products to save money.

When it comes to grocer loyalty amidst the high cost of groceries, Vericast said 64% of respondents have not changed the grocery store they frequently shop at within the last six months, but 27% have changed grocery stores in the last six months to save money.

“Convenience continues to be a big determent of where someone shops for groceries. Time is a very precious commodity, especially for families with younger children. So the 64% who haven’t changed is not surprising,” Cesaro said.

But what Cesaro said was most surprising is that 27% have changed. “Chances are the new store they’ve chosen is not as close or convenient as the original, which means these consumers are shopping around, even for necessities, because saving money is that important to them.”