Groceries not strong indicator of consumer stress, spending: Kearney

What consumers say and what they actually do aren’t always aligned, and new data from the Kearney Consumer Institute examines how consumers are both stressed about—and spending—money.

Kearney’s Consumer Stress Index surveyed 24,000 consumers across 12 countries using five categories, including consumer wallet and finances and geopolitics and government, and found that consumer behavior can be more accurately measured using consumers’ personal situations rather than their feelings about the economy.

Soaring grocery prices have dominated headlines over the past few years and have recently become a highly politicized issue. Per Kearney’s research, 85% of consumers said that they feel the impact of prices the most in the grocery category. Still, more than three-quarters of consumers said affording food “is generally not a concern or occasionally concerning,” and 61% have bought the same products over the last six months despite recognizing the prices had gone up.

Consumers are benefiting from the myriad of options available to them in grocery today, including private label products, so even high-income consumers are looking to get the best deals and “optimize their everyday spending,” per the report.

Kearney analysis of Census data on spend of food as a percentage of income peaked at 7.3% during the onset of the pandemic in 2020, but has since come down, hitting 6.6% in 2024. Meanwhile, the median household income has risen 21% from 2019 to 2024, while food prices have similarly increased 20%.

While some may be facing “sticker shock,” Kearney noted, they’ll likely get used to elevated pricing and stop thinking prices ought to be much lower than they are.

“Consumers’ perceptions of ‘fair’ prices are outdated,” KCI’s lead Katie Thomas said in a statement. “If inflation stays roughly where it is now for the foreseeable future, consumers will slowly begin to let go of their outdated notions of ‘fair’ pricing and acclimate to ‘new-normal’ prices.”

Ultimately, the report found that while 26% of consumers say their annual vacation is a “must-have,” only 17% say the same for their favorite snacks—which Kearney said indicates consumers are working on getting more bang for their buck for “needs” like groceries and focusing more on “wants” like dining out, hotels, and recreation, which are “more holistic barometers of consumer spending,” Thomas said.