Consumer Morsel

December 2022

Supermarket swap

Key takeaways

  • Consumers are responding to surging inflation by changing their spending patterns when grocery shopping. Bank of America data suggests they are “trading down” (i.e. shifting spending from more to less expensive items within the same category) with the year-over-year (YoY) growth in spending at value grocery stores up more than triple than that at premium stores.
  • So who is “trading down” the most? Middle- and higher-income consumers have more scope to trade down and shift spending to less expensive versions of items, since lower-income consumers are more likely to be shopping at less expensive grocery stores already. For the higher-income consumers, spending at value tier grocery stores in October 2022 was up 22% relative to January 2019, according to Bank of America data, likely due to persistent negative real wage growth this year.
  • How might lower-income consumers react to cope with rising food prices? Bank of America data suggests they might also be cutting back on discretionary goods spending: holiday spending for this group has been consistently weak in November 2022 on a %YoY basis compared with higher-income groups.


Read our full analysis for a more in-depth look at these trends.