Looking for a deal on seafood, or breakfast, or dessert? You may be in luck. A new report says price promotions in those grocery categories are on the rise, and others may soon follow, as your local grocery store’s skimpy sales circulars become a little more robust in the year ahead.
That’s one of the findings in the market research firm IRI’s latest “Impact of Inflation on Consumer Behavior” report.
“Promotions for food and beverage products, especially in perimeter departments, are increasing,” the report reads. “Look for promos to increase in 2023 as competition heats up.”
Finally, some good news that could help ease the impact of inflation at the grocery store!
There’s already some good news in several parts of the store. Promotional levels are up in more than a dozen categories that IRI tracks. Fresh shellfish, frozen breakfast food and frozen novelties have seen the largest increase in promotional levels over the past year, with bacon and sports drinks not far behind. But when compared to how frequently, and how deeply, these items were on sale pre-pandemic, we still have a long way to go.
Pork, fish and rice are the only categories in which promotions have actually increased since the end of 2019. But every other category has yet to catch up to normal, or at least what we considered normal a few years ago. Even though sports drinks are among the items most frequently on sale today, promotional levels on those products are still down more than 40% since before the pandemic. And promotions on chicken and frozen dinners haven’t recovered at all. They’re among the categories that have seen the largest overall declines in promotional levels, meaning they’re on sale less frequently and at a lesser discount than any other grocery foods as compared to 2019.
But with regular prices stubbornly high, IRI predicts something is going to have to give. In the year ahead, “inflation is likely to moderate, yet will remain relatively high,” IRI predicts. And without more coupons and promotions, more shoppers are likely to stick to money-saving behaviors they’ve adopted over the past year.
Those behaviors include changing what brands they buy, what products they buy, how they buy and where they buy.
The first category is fairly self-explanatory. More shoppers are avoiding high-priced brands that aren’t often on sale, and opting for lower-priced alternatives. “Sales of premium products, which drove growth during the height of the pandemic, are easing,” IRI noted, “while sales of private label products are increasing.”
It’s not always cheaper brands that shoppers opt for, but cheaper products altogether. IRI pointed out, for example, that sales of liquid laundry detergent have dipped nearly 10%, while less-expensive powdered detergent sales are up 8%.
Shoppers are also changing how they buy. Quick trips, with fewer purchases, made more frequently, are growing 6% over other types of shopping, like stock-up trips. And some shoppers aren’t making any grocery trips at all – IRI’s data show that more nonedible purchases of household supplies and personal products are shifting to online, “taking some food with it, too.”
Finally, more grocery shoppers are shifting away from traditional grocery stores altogether. “Value channels,” like club stores, dollar stores and big-box stores, “are performing well as shoppers try to manage budgets,” IRI notes. These stores “will continue to do well” in the year ahead.
In short, IRI concludes, the era of paying full price for your groceries may be ending, as the era of deals may be back. “Expect value shopping behaviors to continue to define 2023,” the report predicts. As a result, “promotion will likely increase, driven by increasing competition.” That said, promotions likely “will remain behind pre-COVID-19 levels of intensity in many categories.”
So don’t look for Extreme Couponing-level deals any time soon. But compared to what we’ve been paying for our groceries lately, even a slight increase in savings is better than the alternative.
Image source: H-E-B
