Circana: Consumers shift at- and away-from-home eating, spending behaviors as result of higher food costs
Although inflation is abating, food costs remain high.
Even with inflation currently moderating, higher food prices will continue influencing consumers’ spending and eating behaviors this year, reports Circana, formerly IRI and The NPD Group. Food will always be consumers’ priority in tough and good economic times, whether eaten at or away from home, according to Circana food and beverage and foodservice industry analysts speaking at the company’s Growth Summit, held in Las Vegas, March 20–22. When faced with higher prices, consumers will use multiple tactics to reduce or reallocate at- and away-from-home food spending, like trading down to private label, buying in bulk, using more leftovers, or choosing a quick service restaurant over a full service restaurant.
Of the $2.9 trillion in consumer retail spending Circana tracks, food and foodservice spending represents the largest share, nearly $1.5 trillion. Food inflation for the 12 months ending February 2023 was 10.2% at home and 8.4% away from home. Although the rate of away-from-home inflation isn’t as high as at home, foodservice costs are more than four times those of at-home eating occasions, with the absolute dollar gap widening. Higher food costs have had an impact on discretionary spending. David Portalatin, Circana food and foodservice industry advisor, told Growth Summit attendees that some of the declines in discretionary retail spending last year were due to the need to fund higher spending on food and beverage.