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Inflation Tracker Shows Price Increases Slowing But Still High

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IRI has released a new report, November 2022 Price Check: Tracking Retail Food and Beverage Inflation, offering new insights into food inflation and its impact on consumer shopping behavior.

The report leverages point-of-sale data for November and includes data across U.S. food channels, including grocery, drug, mass market, military commissaries and select club and dollar stores, as well as e-commerce. Overall food inflation grew 13.2 percent versus one year ago; however, monthly increases compared to one year ago have leveled off over the last four months.

Consumers are utilizing a range of strategies to reduce spending, such as switching to private labels, trading out of expensive food categories and trading down to mainstream and value brands, as well as consuming more at home versus away from home.

“The pace of food inflation is leveling off but remains at a robust 13 percent level versus one year ago,” said Krishnakumar “KK” Davey, president of thought leadership for CPG and retail.

“IRI anticipates consumers will continue their trading down behavior over the December holidays and into the new year. However, in some segments, consumers will splurge to celebrate the holidays. Retailers and manufacturers with an in-depth understanding of consumer strategies have an excellent opportunity to build loyalty by offering products, price points and package sizes that provide good value.”

Key insights from November’s inflation report include:

  • Within the store, inflation has moderated. Perimeter areas, including produce and deli, have seen inflation moderate to 8.2 percent versus one year ago, while inflation within center store, which includes snacks, frozen meals and other frozen foods, has leveled off in November at 14.9 percent versus one year ago.
  • Several product categories had price declines in November versus October. Categories with the largest month-over-month price decreases included root vegetables, bacon, butter/margarine/spreads and chocolate candy.
  •  Inflation varied across the store. Fresh meat, seafood and beverage alcohol segments rose just 4.3 percent versus October and 6.3 percent versus one year ago. However, other categories rose, such as dairy and bakery.
  • Food inflation did not diminish Thanksgiving celebrations for most American households. Inflation for the typical Thanksgiving meal was up 14.2 percent versus one year ago, driven by pies, side dishes and baking, while main dishes were up 11.8 percent versus one year ago.
  • Thanksgiving volume sales saw an uplift in 2022 of 72 percent (versus pre-Thanksgiving weeks), an increase of 6 percentage points versus year-ago Thanksgiving, suggesting that overall, Thanksgiving celebrations were not impacted by inflation.
  • About 44 percent of Thanksgiving sales were sold on deal, which is similar to 2021. Fifty percent of main dishes and 54 percent of pies sales were sold on promotions.

The details of these and other findings are included in IRI’s November inflation report, published here.

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