Shoppers are spending less on groceries and household goods
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Why are shoppers cutting back on groceries at Dollar General?
Discount chain Dollar General is normally a hot spot for shoppers to find groceries and basics at bargain prices, but the company's CEO has said the customers have been cutting back on their spending on food and other household expenses. For more, we turn to the KCBS Ring Central Newsline and speak with Bloomberg's Christina Peterson. Christina, thanks for the time. Thanks for having me. So what's happening? Where is it happening?
For months, we've been hearing food companies say that people are looking for bargains or looking to find a better value in a private label or cheaper product. But what's interesting about what we're hearing now is that companies like Dollar General are starting to say that people are actually just buying less food. And the reason that they are citing is because of the higher gas prices caused. by the conflict in the Middle East.
How are higher gas prices and the Middle‑East conflict affecting food purchases?
And that's really just a shift in what we have heard uh for a long time now, even though grocery prices, as you know, have been, you know, higher than normal for years at this point. But this it this does seem to be like something of a of a turning point.
I was thinking, you know, inflation, tariffs. We hear all sorts of influences on what makes people buy uh you know, what they buy and and how much of it. We're also hearing that this is happening in rural areas.
Yeah, that's right. That's what Dollar General said. They they said that the pressure has been more pronounced on customers in rural communities because they have to drive farther distances. And that can be tricky with with more expensive gas.
Where are they seeing um a a c constriction, I guess, of of of your grocery stores?
Why are rural communities feeling the biggest pressure on grocery spending?
I keep thinking that there are people who live farther w far away from a Costco, but they make it a d a day long thing where they drive to the Costco and they they pack ice and they're they're buying up all sorts of stuff and they don't have to do it for like two months.
Right. I mean I think um They didn't go into too much detail on this, but I think that that can be trickier for fresher items that you might want to buy more quickly, more frequently, that sort of thing, rather than staples. Um, that I could imagine that that would be trickier um living in a rural community. One of the things that folks have been citing on these calls um is the impact from changes to the food aid program, the supplemental nutrition assistance program, the federal food aid program was changed in the big Republican tax bill last summer, and the work requirements were expanded. And companies are saying they are starting to see the impact of of those changes, which have pushed some people out.
With the program.
Well that just kicked in, was it yesterday?
Uh did what did that kick in yesterday?
What impact are recent SNAP and food‑aid policy changes having on shoppers?
Yeah, there were some we we understand that there were the a lot of the requirements for, you know, working or volunteering or stuff like that were supposed to kick in.
Yeah, I believe that was Medicaid. The the state supplement the SNAP changes have been rolling in over a period of time. We've also seen separate state waivers on SNAP, um which are done differently in in each state that has chosen to pass a waiver, but those essentially restrict people from using SNAP funds to buy soda or candy. So we're also seeing that um make a difference for food companies though that those waivers don't lower the amount of benefits for shoppers.
So what is Dollar General or uh stores like it? What do they do?
You know, food companies are trying to offer products um at lower price points.
How are food manufacturers responding with shrink‑flation and smaller pack sizes?
Often that means a smaller product or a different, you know, variety pack that maybe instead of 15 has 10 items, like 10 smaller bags of chips that they will offer at a lower price. Because sometimes for lower income consumers, just the overall that that item might be more expensive by ounce, but the overall price is still lower. In some instances we are seeing what people call shrinkflation, you know, where they'll uh take some product out of the bag. Um but I think also it's just It's been a tough time for the packaged food industry.
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Chapters
5 chapters
1
Why are shoppers cutting back on groceries at Dollar General?
0:00–0:53
2
How are higher gas prices and the Middle‑East conflict affecting food purchases?
0:53–1:42
3
Why are rural communities feeling the biggest pressure on grocery spending?
1:42–2:46
4
What impact are recent SNAP and food‑aid policy changes having on shoppers?
2:46–3:39
5
How are food manufacturers responding with shrink‑flation and smaller pack sizes?
3:39–4:41
Speakers
2 identifiedMore from KCBS Bloomberg Tech and Business Report
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