New insights reveal how sustained inflation, supply chain challenges and global tariffs are influencing grocery spending.
The survey, conducted by Blue Yonder, polled consumers across Australia and New Zealand, France, Germany, the Middle East, the UK, and the US.
It finds that 85% of overall respondents are concerned about inflation’s impact on grocery prices.
“The findings of this survey underscore just how widespread and deeply felt the impact of inflation is on consumers’ everyday lives,” says Blue Yonder Senior Director of Global Industry Strategist, Grocery & Convenience Ben Wynkoop.
“From buying fewer grocery items and cutting back on alcohol purchases to shopping at discount retailers and reprioritising spending across other categories, consumers are navigating prolonged uncertainty – and retailers must adapt accordingly.”
Inflation drivers
Nearly half (49%) of all respondents believe newly introduced global tariffs are the leading factor behind inflated grocery prices.
This is followed by increased costs for raw materials (42%), increased labour costs in manufacturing and food processing (39%), and increased profit margins for brands and manufacturers (33%).
The perceived top factor driving inflated grocery prices differs across regions. Consumers in the US (65%), the UK (56%) and the Middle East (50%) feel global tariffs are the leading cause of rising prices. Consumers in ANZ (50%) feel that increased profit margins for brands and manufacturers is the top factor for inflated prices, while consumers in France (48%) and Germany (47%) believe the increased cost of raw materials is the leading cause of grocery inflation.
There is a generational divide, too. Baby Boomers uniquely believe that increased labour costs in manufacturing and food processing are the leading cause for grocery inflation (52%), whereas all other generational groups believe global tariffs are the top cause of inflated prices.
Buying less
Almost two-thirds of respondents (65%) report they would buy fewer grocery items across categories to cope with price increases, while 42% would shop at discount and wholesale stores.
In addition, approximately one-third would prefer shopping based on promotions and discounts (36%) and switching to private label brands (34%).
Alcohol is facing the biggest budget cuts compared to other grocery categories, with one-third (33%) of respondents saying they would reduce alcohol purchases in response to inflation price increases.
Cutting back on other spending
To offset high grocery costs, many consumers noted they would be willing to cut back on discretionary spending.
More than half (56%) of the respondents are willing to cut back on clothing and footwear – this was also the top response by generations and regionally.
Other top categories consumers are willing to cut back on include consumer electronics (46%), streaming/gaming subscriptions (43%), personal care and beauty (36%), appliances (33%), and automotive purchases (28%).
Only 7% of respondents weren’t willing to reduce their other retail spending to offset grocery costs.
Generationally, Baby Boomers are most likely to scale back on clothing and footwear (63%), compared to Gen X (59%), Gen Z (53%) and Millennials (50%).
