Food Is Back on Sale. But There’s a Catch.
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What is the main topic discussed in this episode?
This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. Washington Wise from Charles Schwab is an original podcast that unpacks the stories making news in Washington. Listen at schwab.com slash Washington Wise.
Here's your money briefing for Wednesday, October 25th. I'm J.R. Whelan for The Wall Street Journal. For the past two years, many households have been willing to pay the steadily rising cost of food. But that's changing. And supermarkets and food companies are listening.
Why are supermarkets and restaurants putting food back on sale?
They're putting food back on sale. And that can mean a number of things. It can mean buy one, get one free deals or just sales. Or maybe these products are in an end cap or a featured display in the grocery store.
We'll talk to Wall Street Journal reporter Jesse Newman after the break.
and how they may affect your finances and portfolio. Listen at schwab.com slash Washington Wise.
Food is on sale again. That's the good news. But those sale prices might still put a strain on your wallet. Wall Street Journal reporter Jesse Newman joins me. So, Jesse, over the past year, we've seen the overall inflation rate come down. But what do the numbers tell us about prices at supermarkets and restaurants?
During the pandemic, food companies all but stopped offering discounts. And now they are putting food on sale again. But consumers would be forgiven if they hadn't noticed because grocery shopping and eating out are still just far more expensive than they used to be. For example, in grocery stores, the portion of food that is being discounted has reached a level that we haven't seen since 2019 and at the same time consumers are still paying more than a third that they did then essentially sales are back but your grocery bills are still much higher
How much of grocery inventory is back on promotion compared with pre-pandemic levels?
Many food companies have said in their earnings statements that consumers were willing to pay higher prices for food. What's changed?
It definitely seems as though many consumers have reached a breaking point with food prices up more than a third. Food companies are trying to understand what has changed. But what's clear is that many consumers are feeling really stretched and that particularly for restaurants, branded center aisle cereals and crackers and your packaged food, consumers are really reacting to higher prices and pulling back on their purchases and just overall changing the way that they eat. And so as a result, overall food sales are down about 2% from levels last year.
How has the way people cook and eat at home changed?
Food company executives, they have said a number of things in recent months. They've talked about how consumers are responding to increased financial pressure by doing things like cooking more meals from scratch. They've talked about how they are really working down their pantry inventories, even from stockpiles that they had from the pandemic, and that they're eating more leftovers. They've also talked about how folks are shifting from conveniences
What consumer behaviors changed as food prices rose and promotions disappeared?
meals that they made for one person to meals that can feed multiple members of a family.
You spoke to somebody for your story. I like what she said, how she tries to play it safe when she's preparing meals for her family just to make sure that everybody likes what she's cooking.
Yeah, that's exactly right. She said that she used to try new products or new flavors, just keep her family interested in what she has to offer. And she said that she's really not doing that these days because she just doesn't want to throw away food if her husband and her four kids aren't fans of whatever she brings home.
How are food companies responding to this changing of the way that consumers are handling food at home?
They're putting food back on sale. And that can mean a number of things. It can mean buy one, get one free deals or just sales, or maybe these products are in an end cap or a featured display in the grocery store. We're seeing about 33% of food sales that are on promotion versus in 2019, that was at about 36%. So we're not quite back to pre-pandemic levels, but we're getting there.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:00–0:36
2
Why are supermarkets and restaurants putting food back on sale?
0:36–2:25
3
How much of grocery inventory is back on promotion compared with pre-pandemic levels?
2:25–3:31
4
What consumer behaviors changed as food prices rose and promotions disappeared?
3:31–5:09
5
How are food companies structuring promotions to win back shoppers?
5:09–5:57
6
How do current sale prices compare to prices before the pandemic?
5:57–6:48
7
What restaurant promotions are reappearing and how have prices changed?
6:48–7:34
8
How should households evaluate promotions to manage their grocery budgets?
7:34–8:18
Speakers
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