Exclusive Q&A: Kroger's 84.51° data group provides inflation insight

Inflation is affecting how consumers shop, but there are steps retailers can take to minimize the impact.

Chain Store Age recently sat down with Alex Trott, director, insights, at 84.51°, Kroger’s  data analytics subsidiary, to discuss how consumers are dealing with inflation and how retailers can ensure they still attract customers in an era of higher prices and more cautious spending.

How concerned are consumers about inflation?

In April 2023, 84.51° surveyed 400 shoppers on this topic. We found that 65% of shoppers are highly concerned with inflation still. In the preceding few years, COVID-19 was a top concern and inflation was not as big of an issue. Those lines have completely crossed and COVID-19 is no longer that big of a concern.

When you break that down by generation though, consumers between the ages of 18 and 34 are actually a bit more optimistic about the inflationary outlook, and they think that inflation might only last a year or less.

When you look at shoppers 55 years and older, they think that inflation will last for two years or more. In terms of how this is affecting consumer behavior, there are three main behaviors that customers are engaging in more frequently.

How is inflation affecting consumer shopping habits?

First of all, 70% of shoppers report that they are looking for sales deals and coupons more often. Secondly, consumers are cutting back on non-essentials.

The third thing, and something really to watch out for, is over half of customers are reporting that they are switching to lower cost brands more often, both owned brands and lower-priced national brands.

I’ll also note that Kroger has seen a 92% increase in year-over-year traffic on the digital coupons page on our programmatic promotions and the Kroger app. Customers are searching and surfing for digital offers and adding coupons.

What can retailers do to counteract some of these inflationary impacts on their shoppers?

Retailers can invest in programs like personalized coupons and offers, but also should invest in offering deals at the right time. Ensure that your items are on sale at the right time where it makes sense, and that you are meeting that shopper with the deals during the seasons where it makes sense for your brand.

We are seeing the largest growing segment for online shopping. Digital grocery shopping at Kroger is happening with very price-sensitive households. These households are very much aware of the prices of the items they're purchasing. That was Kroger’s fastest growing segment online.

There is also a component of making sure your online experience as a brand is also really crisp. This means three things. You need to have the same products in store that you have online. Have these items at the same prices online as they are in store. Make sure you offer the same coupons and deals that you have in store online. Customers also report they are becoming less prone to impulse purchasing.

It's really about making sure that you have that online experience and have really developed a clear strategy; and have put all of the right activations in place so you can attract that very price-sensitive customer online.