via Grocery surveys yield trends, warnings | Consumer Watch, clarionledger.com, 2/7/2013.
If you’re like the Moak family, you have probably noticed that an increasingly-larger chunk of your family budget is going toward groceries. The cost of many food items is up sharply over the past couple of years, much due to the increased costs involved in production and transportation of food.
In a recent study published by FGI Research, more than 4,600 consumers were surveyed about their grocery budgets. The study found that the average American household spendt $473.00 per month on groceries in 2012. A smaller, but more detailed, study by FMI Research, found average household grocery spending to be about $420.00 per week. That’s up significantly from 2006, when the figure was about $373.00. That may not seem like such a huge increase, but it amounts to about a 12 percent increase in spending. A lot of that is probably due to the Great Recession, when prices for many goods spiked considerably.
All of this means that consumers are being more careful about those decisions, and are shopping around more. The FMI study found that many consumers, who had traditionally confined their grocery shopping to supermarkets, began to diversify into warehouse clubs, discount stores, dollar stores and convenience stores. This means that grocery stores have seen their market share decrease.
Another interesting trend: use of online media. Through everything from comparison shopping to e-coupons, consumers are looking to utilize the Internet to save money. In addition, shoppers in major cities are making use of online grocery shopping and delivery. Many consumers have long-ago embraced online shopping for electronics, books, and various consumer items, some of which they would have previously bought at bricks-and-mortar stores. Even though it costs signifantly more, many consumers say the convenience is worth it. Entrepreneurial businesses which can provide online shopping services in our local communities may find a ready market for these services, especially among wealthier households.
So what’s driving these higher prices? During 2013, some forecasters have warned about food-price inflation of around four percent (it was about 2.2 percent during 2012). Much of this is due to last year’s droughts, which are primarily affecting meat and dairy prices. Drought also limited production of soybeans and corn, both heavily used in feeding beef and dairy cattle.