COLUMBUS, Ohio — Inflation is impacting consumer spending habits at the grocery store, according to a June report from data analyst group IRI.

What You Need To Know

  • Inflation is causing consumers to trade down     

  • Trading down is when consumers purchase less expensive items that will substitute or compliment what they would typically buy

  • Each week, Chuck Ringwalt and Spectrum News 1 agriculture expert Andy Vance discuss topics of concern within agriculture

Agriculture Expert Andy Vance said when prices go up, people will look for alternatives.

“If I’ve got a product that maybe I want to buy, but I realize the price has gone up, what do I do about that? You might look for another price on the shelf that is a similar product. You can substitute it like we might talk about going from pork to chicken as an example,” Vance said. “In the meat case, you’ll see a lot of times the classic examples that trading down from steak to hamburger or, more likely, from steak to pork chops or chicken. Those are some of the most common things.”

Vance said trading down does not just involve meats.

“Where it gets more challenging is maybe what do you do at the fruit and vegetable case? Are you trading out of products like brand names for store brands?” Vance said. “Although prices there are up too, but you’re definitely seeing that happen. 80-plus percent of consumers in that IRI report said they are making those kind of changes.”

Vance said he expects the trend to continue.

“Well, an economist would tell you the only cure for high prices is high prices, because when we see higher prices, we do that trading down, we look for other substitutes, so the natural laws of supply and demand, eventually we’re demanding less of a product,” Vance said. “Let’s say steak is an example. And so the prices come back down. The challenge is how quickly does that happen? I think it could be quite a while, six months, a year, maybe longer before we see any significant retracement there.”