Prices change the way people shop. Prices rise; folks tighten their belts. Prices drop; they spend more. Pandemic shortages and stimulus packages rattled the system. But today, U.S. consumer spending trends are reorienting prices—especially on the grocery aisles. It turns out, shoppers have some power to control escalating costs.
Consumers are fed up with high prices. Complaints often revolve around “price-gouging,” or increasing prices on necessities to an unreasonable point.
During the pandemic years, critics say price-gouging spiraled out of control. Companies wanted to cover higher manufacturing and shipping costs. But they may have raised prices more than needed, and that hit consumers hard when many were living on less income.
Investment planner Samuel Rines says PepsiCo, Kimberly-Clark, and other food and packaged goods companies dramatically raised prices in 2021 and 2022. The companies blamed increases on supply-chain troubles and Russia’s war in Ukraine. But overcharging allowed them to boost their bottom lines too.
During those price hikes, some Americans benefitted from wage gains and government aid. The assistance made paying higher prices somewhat easier for those who kept jobs during the restrictions. But consumers also paid more because they felt desperate. (Remember the toilet paper shortage?)
It’s all too easy to fall into the sin of emphasizing profit over people. But God says loving Him and neighbors should be supreme in Christians’ minds. (Matthew 22:37-40) That means following the Golden Rule to “do unto others” (Matthew 7:12)—not taking advantage of people’s needs.
Starting late last year, many companies realized price-gouging wasn’t working.
Rines mentions consumer goods company Unilever, which makes Hellmann’s mayonnaise, Ben & Jerry’s ice cream, Dove soaps, and more. Unilever raised prices 13.3% on average in 2022. Sales volume fell 3.6% that year. In response, the company raised prices just 2.8% last year; sales rose 1.8%.
Americans overall are spending more cautiously. They’ve replaced name-brand items—those most prone to price-gouging and shrinkflation—with store brands.
Shopper Stuart Dryden of Arlington, Virginia, points out the price gaps between Kraft Heinz-branded products and their store-label rivals:
- 8-ounce Kraft’s Philadelphia Cream Cheese, $6.69; store brand, $3.19
- 24-pack Kraft cheese slices, $7.69; store brand, $2.99
- 32-ounce Heinz ketchup bottle, $6.29; store brand, $1.69
“We’re beginning to see the consumer no longer willing to take the higher pricing,” Rines says. In addition to buying more store-brand products, some shoppers switch to discount stores or simply buy fewer specialty foods (goodbye, Icelandic sea salt).
The grocery mutiny seems to be working.
Dryden tried private-label options. “The quality is the same,” he says. “It’s almost a no-brainer to switch.”
Why? Businesses must predict or respond to consumer choices in order to succeed. But good business practices put people above profits by not taking advantage of those in need.
