Grocery inflation continued reaching new heights in the month of May.
According to monthly inflation insights from Numerator, overall, grocery prices continued a steady growth trend in May 2022. For the four-week period ending May 29, 2022, grocery prices rose at a record-breaking rate of 14.2% compared to the year-earlier period. The year-over-year (YoY) grocery inflation rate has steadily increased from approximately +7-8% at the beginning of the year.
For the four-week period ending May 29, grocery inflation continued to be highest in the online and dollar channels (+22.5% and 19.5% YoY, respectively). Both channels have seen significant YoY growth in inflation rates in 2022, compared to the mass (+13.7%), food (+12.9%), and club (+8%) channels.
It is interesting to note that as 2022 inflation rates markedly increased in all other tracked grocery channels, club stores have maintained grocery inflation rates between +6.9% and +8.2% YoY. While middle-income consumers are seeing the highest grocery inflation rates at 15.2% YoY, high-income consumers overtook low-income consumers in terms of inflationary impact for the first time in May 2022.
Examining grocery inflation trends by key demographic groups, Numerator found that Gen Z consumers significantly pulled away from other generations in May, jumping from +14.3% YoY growth at the beginning of the month to +19.8% by the end of the month.
Black consumers continue to face the highest YoY inflation levels (+14.8%) across ethnic groups, although white/Caucasian (+14.7%) and Hispanic/Latino (+14.5%) trail by less than one percentage point.
Consumer sentiment findings
Gen Z continues to show the lowest levels of financial confidence. Just over one in three surveyed Gen Z consumers (35.5%) reported their financial situation as “good” or “very good” – trailing Millennials and Gen X by 14 percentage points and Boomers and older generations by 17 points.
Urban households face financial squeeze. Nearly one in four (24%) surveyed urban consumers said they did not have extra cash in early June, an increase of two percentage points since early May. In the same timeframe, the percentage of surveyed urban consumers who said they would put extra funds into savings dropped by two percentage points to 32.5% from 34.5%.
All ethnic minority groups saw recent upticks in financial insecurity. More than one-quarter of surveyed Asian consumers (25.8%) say they do not have spare cash, and this number grew throughout May among both Hispanic/Latino (24.9%) and Black consumer survey respondents (23.9%). The percentage of surveyed white/Caucasian consumers saying the same has remained flat throughout the past six months (22.1%). Black consumers are significantly more likely than other ethnicities to say they would put extra funds in savings (40.4%) or pay down debts (37.5%).
Travel intentions are highest among millennial consumers. More than one in four (27.3%) surveyed millennials say they would use extra funds for travel, surpassing both Gen X (26.4%) and Boomers and older generations (26.1%) in May.
Early June financial optimism leveled off and pessimism increased. Surveyed consumers rating their financial situation as “good” or “very good” leveled off at 48.8% – down from 52.3% in early April. Those rating their finances as “poor” or “very poor” rose from 11.6% to 14.9% in the same timeframe.
Changes in Numerator's Price Pulse are calculated at a category level. The average price per item within a category is based on verified purchase data from over 100,000 Numerator panelists, and the average price from the past four weeks is compared to the same period one year ago. The Price Pulse includes a cross-channel view of prices, as well as channel-specific views and cuts by consumer demographic groups. Numerator’s Financial Outlook Tracker leverages an ongoing survey that collects approximately 10,000 responses from active shoppers each week. Consumers are asked to rate their current financial situation in addition to sharing spending intentions. The tracker has additional breakouts by ethnicity, generation, income level, and urbanicity.