June 2024
Value shop ‘til you drop
Younger consumers are trading down to value grocers to offset more life-stage expenses and the rising costs of housing and autos.
Key takeaways
- According to internal Bank of America data, consumers are spending more on groceries with inflation-adjusted growth in early 2024 positive for the first time in nearly three years. But Consumer Price Index (CPI) data shows grocery prices were still up nearly 30% in April 2024 compared to January 2020 levels, and we find that some consumers may be looking for ways to offset their relatively high grocery bills
- Using Bank of America internal data we find that Gen Z and Millennials, faced with high grocery prices and rising costs for other necessities, join Gen X and Baby Boomers with increasing shares of grocery spending at value-tier stores.
- Notably, the percentage share changes for grocery tiers are relatively small, indicating that reports of large-scale trading down to value-tier grocery stores may be overstated. However, as long as prices remain high, in our view, consumers will search for opportunities to trade down, particularly younger cohorts as they age into more value shopping.
Read our full analysis for a more in-depth look at these trends.
