More Consumers Shopping at Dollar Stores as Confidence in the Economy Shrinks
The Biden administration keeps trying to make the economy sound strong and bright, but reading between the lines shows a different story.
Consumer spending has increased, but with many changes to lifestyles and choices.
More Americans are turning to dollar stores and discount grocery places as food prices increase monthly while salaries and hourly wages barely budge:
Phoenix Kamlo, 41, has been relying on the Family Dollar for an increasingly large share of groceries for his family of five.“Everything in there is super-duper sweet,” he says, citing the high sugar content of goods from tea to canned fruit. “But it’s nearby, and it’s cheap.”Income from his Wichita, Kan., tailoring and alterations business has gone down in recent months, he says. He suspects his longtime customers are more focused, like he is, on affording enough to eat.
Dollar General has fresh produce in about 2,300 out of the 18,000 stores in the country.
Dollar Tree, owner of Family Dollar, has many food options like produce, eggs, and milk in almost all of its 16,162 stores.
Bulk shopping has become more popular with a cut in name brands:
Other households are buying in bulk or making do without items they never used to think twice about spending money on. Sam’s Club membership income was up 10.5% year-over-year, according to parent company Walmart’s May earnings call.Consumer-products giant Procter & Gamble Co. just posted its largest sales gain in 16 years. Still, the company is predicting its slowest sales growth in years as consumers cut back on household staples like the company’s Tide detergent and Pampers diapers.Elayna Fernandez, a 45-year-old single mom of four, has taken on the role of shampoo-and-conditioner police, making sure her longhair daughters don’t use more than they need.“I am very conscious about not using a lot of those products,” says Ms. Fernandez, who runs a digital-marketing company and parenting blog. She recently purchased a Sam’s Club membership to buy more in bulk, and switched to store-brand versions of almond milk and granola bars.
Unilever and Kraft Heinz also “reported lower volumes in their latest quarters.” Customers want more “low-cost laundry, cat litter and other products” from Church & Dwight, maker of Arm & Hammer.
The Consumer Price Index (CPI) continues to increase with inflation:
The all-items Consumer Price Index (CPI), a measure of economy-wide inflation, increased by 1.4 percent from May 2022 to June 2022 before seasonal adjustment, up 9.1 percent from June 2021. The CPI for all food increased 1.0 percent from May 2022 to June 2022, and food prices were 10.4 percent higher than in June 2021.The level of food price inflation varies depending on whether the food was purchased for consumption away from home or at home:
- The food-at-home (grocery store or supermarket food purchases) CPI increased 1.0 percent from May 2022 to June 2022 and was 12.2 percent higher than June 2021; and
- The food-away-from-home (restaurant purchases) CPI increased 0.9 percent in June 2022 and was 7.7 percent higher than June 2021.
The USDA Economic Research Service predicts that “food price increases are expected to be above the increases in 2021 and 2022.”
Eight food categories went up by at least 1%. Three of those categories went up by 2%:
In 2022, all food prices are now predicted to increase between 8.5 and 9.5 percent, food-away-from-home prices are predicted to increase between 6.5 and 7.5 percent, and food-at-home prices are predicted to increase between 10.0 and 11.0 percent.
- Beef and veal declined between May 2022 and June 2022, but other meats went up by 1% and 16.7% from July 2021 to June 2022.
- Poultry went up 1.5% between May 2022 and June 2022 and increased 17.3% between July 2021 and June 2022.
- Eggs went went up .3% between May 2022 and June 2022 and increased 33.1% from July 2021 and June 2022.
CLICK HERE FOR FULL VERSION OF THIS STORY