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Inflation causing Americans to ‘evaluate’ food choices, analyst says

Morning Consult Food & Beverage Analyst Emily Moquin joins Yahoo Finance Live to explain how inflation is still impacting Americans' wallets, particularly when it comes to grocery budgets, and how food insecurity is rising.

Video Transcript

RACHELLE AKUFFO: Fed Chair Jerome Powell has a warning for Americans-- efforts to bring down inflation will bring some pain to households. And that's showing up in the numbers already. A new Morning Consult report reveals 55% of US adults made changes to the way they ate and drank in June due to inflation.

Well, joining us now is Morning Consult Food and Beverage Analyst Emily Moquin. Thank you for joining us, Emily. So what sort of changes were people making?

EMILY MOQUIN: Persistent inflation has really caused people to evaluate their overall eating and drinking choices. And as you said, a majority say that they've made changes. And it is the second-highest category that most people spend their monthly budget on after housing. So it makes sense when you're thinking about ways to save that you might look at how many meals a week you eat out, how many meals a week you make at home, how that might impact your overall budget. And that's what we see top of the list, as you can see in that chart there, is a majority of those who said they're making changes are saying that they're thinking about eating out less to save money.

DAVE BRIGGS: Are we close to pre-pandemic levels in terms of eating out?

EMILY MOQUIN: We've been tracking since 2019 how frequently people say that they're dining out at a restaurant. And in 2019, those levels were still higher than they are in 2022 at this point. So we're seeing that consumers are still not quite back to those pre-pandemic levels, but for different reasons-- not so much concern about COVID-19 anymore as it is concern about their personal finances.

RACHELLE AKUFFO: And, Emily, I want to ask you about shrinkflation and what people are really noticing that the most in.

EMILY MOQUIN: Yes. So I've just been digging into this in some more depth. And the category that really stands out the most to consumers is snacks. And I think it's because there are a lot of packaged goods in that aisle, there are a lot of things where you can either have a smaller bag or something like a granola bar or cookie-- the product itself could be smaller. So that's a category where a majority of adults in the US say that they've noticed shrinkflation happening.

DAVE BRIGGS: One thing I've always assumed was inflation-- or rather recession-proof is alcohol. Have people cut back there and by how much?

EMILY MOQUIN: Yes. We have seen some ups and downs through the spring, I think with really high concern around gas prices, just general economic uncertainty-- across the board we saw some consumers saying that they were cutting back on drinking alcohol at all and the frequency of which they were doing that. That has come back a bit in the summer.

There's some seasonality at play here in terms of how people are spending their summer, and vacations, and so forth. But really, it's come back most with high earners. And we've seen for lower income consumers, in particular, that's a place where they've cut back because it's a more discretionary category.

RACHELLE AKUFFO: And as we look at the number of people who just aren't buying more food because they can't afford it, how disturbing is that trend? And are we seeing any sort of leveling off of that?

EMILY MOQUIN: We do track questions around food insecurity. And back in January, about 10% of US adults said that they worried about being able to get more food before they ran out of money. That's gone up about 4 percentage points to. 14% and that is those who said that was sometimes or often something they worried about. So it is up. It's not up real dramatically, but any increase there, of course, is concerning.

DAVE BRIGGS: Sure. And food inflation, generally speaking-- groceries are up more than 13%, but we don't, of course, Emily, always notice it. What do people notice the most when they are at the grocery store when it comes to food inflation?

EMILY MOQUIN: I think they're worried about the categories that they purchase the most things-- like meat, dairy, produce. So those are the categories where we are buying mostly every week in most households in the US, and more likely to notice those price increases. But across the board, just seeing pretty high concern on most categories from all US adults.

RACHELLE AKUFFO: We did have that chart up there showing that, obviously, some people choosing to buy generic brands now just really to try and save some money. A big thank you there-- Emily Moquin, thank you for joining us this afternoon.

EMILY MOQUIN: Thank you so much for having me.