According to Innova, a leading global research expert, markets worldwide experienced a hike in food prices of 18 percent in 2022. Inflation and energy price hikes impacted by the war in Ukraine are hitting consumer spending. Low to middle-income countries have been most impacted, with some experiencing a rise of up to 52 percent. The European Union and the United Kingdom have been struck harder than the USA for developed markets.
Consumer spending in the food and drink category remained the leading source of pleasure compared to other uses of discretionary spending. Recent reports by Innova suggested that food inflation had impacted this category for more than just inflated prices. Consumers are spending more on food generally. However, this isn’t solely attributed to price hikes. Instead, spending on food and drink is often used as a method of mood enhancement, a return to restaurants and the rise of delivered-in post-pandemic.
Actions to reduce spending look to increase, with two in five consumers expecting to spend less in 2023. Popular methods for appealing to consumers include looking for value, buying on promotion or buying fewer items. Cooking from scratch was another cost-saving measure for a few age groups, specifically in markets such as China and India.
The report notes that popular trends that have dominated over the last few years, such as a desire for ‘fresh’ and ‘local’, could be challenged as consumers look more frequently for savings in their weekly grocery shops.