84.51° Inflation Report: Customers Cut, Traded Down in Many Categories in 2022
Consumers at Kroger continued to cut back in certain categories, as well as buy less expensive products in others, according to 84.51° 's February 2023 Inflation Wrapped report, a positive sign for private brands.
Kroger’s retail data firm released its latest report detailing which categories shoppers say they plan to trade down in, and which they actually do end up trading down in. In 2022, consumers said they noticed the highest price increases in fresh categories like dairy, produce and deli/meat/seafood, impacting the categories they decided to switch in. However, dairy (29%), pet food (27%) and frozen foods (23%) saw the highest price increases year-over-year.
In the Inflation Wrapped report, shoppers said they would cut back on snacks/candy (66%), beauty products (57%), drinks (51%) and fresh bakery items (48%) to start 2022. In reality, customers reduced spending the most on household cleaning products (10%), drinks (10%) and pet food (9%), showing a gulf in what customers said they would cut out and what they actually did.
When it came to trading down, Kroger customers only purchased less expensive brands in pet food (+3%), baby care (+2%) and paper products (+1%). Despite the small increases year-over-year, trading down in categories such as these is providing a boost for Kroger’s private brands.
“One of the ways that the consumer is responding to inflation is by purchasing private label brands,” Barbara Connors, VP of Strategy and Acceleration at 84.51°, told Store Brands. “We’ve seen that sales of Our Brands, Kroger’s private label portfolio, grew over 10% in 2022 which demonstrates the strength of these brands and how they meet consumer needs, especially during inflationary times. Additionally, Kroger’s Simple Truth, the largest organic line in the industry, recently passed a major milestone celebrating its 10th anniversary."