Although frustrated by high prices, most Americans feel grocery prices are “somewhat” or “very” fair while they are more likely to label prices at restaurants as unfair, according to results released on Monday. Fast food restaurants got the lowest ratings and 52 percent of respondents said they cut back their trips to fast-food outlets because of high prices.
“Although measures of inflation have cooled, the cumulative impact of high food prices continues to strain consumers,” said analysts from the University of Illinois and Purdue University. In a survey in May, half of participants said food was affordable, down by 10 percentage points from early 2022 when food prices were accelerating. Food inflation peaked at 11.4 percent in August 2022 and has declined steadily to an annualized rate of 2.1 percent last month.
But the inflationary surge casts a long shadow. Four out of every 10 people surveyed in May for the Gardner Food and Agricultural Policy Survey said they expected food inflation would worsen during this summer. A separate Purdue survey found consumers pegged the current food inflation rate at 6.2 percent, nearly three times higher than it actually was.
“Most consumers felt grocery store pricing was at least somewhat fair,” wrote Maria Kalaitzandonakes and Jonathan Coppess of the University of Illinois and Brenna Ellison of Purdue at the farmdoc daily blog. “This was especially true of dollar stores and discount grocery stores, where over a third of participants indicated they were going more often due to price increases.”
Eight of 10 consumers said prices at dollar stores and discount grocers were fair. Online stores and club stores rated nearly as high. Supermarkets scored around 55 percent for fair prices.
By contrast, “we find that consumers were generally split on whether prices felt fair” at restaurants, with roughly half saying they were fair and half saying they were not, said the analysts. “Consumers seem most frustrated by pricing at fast food restaurants, where 53.1 percent thought prices were unfair – more than any other restaurant type.” Fast food restaurants also had the largest share of respondents saying their prices were “very unfair,” 18.8 percent.
Around half of respondents said they reduced their patronage at restaurants because of higher prices; the largest percentage, nearly 52 percent, said they frequented fast food outlets less often. Grocery shoppers said they looked for lower-cost stores.
Customers were three times as willing to accept higher grocery or restaurant prices due to increased ingredient costs and higher wages for employees than for higher profits for the owners. “And about 15 percent thought there was no acceptable reason for price increases,” said the analysts.
The Gardner survey, conducted every three months, questions around 1,000 consumers on their views about food and farm issues. Participants are recruited to match the demographics of the U.S. population.