Inflation is coming for middle-class households as higher prices hit big-box stores. Will they cut back on discretionary purchases?

 

After years of being the only group that didn’t feel the impact of rising grocery prices, middle-income consumers are now starting to feel the pinch. According to a report by data company Numerator, middle-income consumers now account for the majority of those affected by the rising prices.

While rural and urban consumers have experienced higher grocery prices, suburban consumers have also experienced the same rate of inflation. As a result, low-income families have been the most affected by the rising prices. They are usually the ones who spend the most on food, housing, and energy.

The gap between the lower and middle income groups started to close in the week of May 29. During that period, middle-income consumers experienced a 15.2% increase in their grocery prices. On the other hand, lower-income consumers experienced a 14.6% increase in their grocery prices.

According to a food and beverage analyst, the rising prices can pose a significant challenge to middle-class households.

According to Seifer, the rising prices can pose a significant challenge to middle-class households. They might not be able to afford to make the necessary purchases due to their income levels. Also, they might be too high to qualify for programs such as the Supplemental Nutrition Assistance Program (SNAP).

As a result, middle-class households might have to make tough decisions regarding their food and beverage purchases. They might also reduce their restaurant usage and look for other savings measures.

A survey conducted by CNBC in April revealed that more middle-class households would feel the impact of persistent inflation by cutting back on their dining out and other expenses. The survey was conducted on a sample of households with incomes between $50,000 and $100,000, as well as higher incomes that earnings over $100,000.

A report released by data company Numerator on Thursday revealed that the higher prices were mainly caused by the impact of the big-box stores. It analyzed the purchase data of over 10,000 people who used its app, Receipt Hog, to collect their receipts. The company found that the average spend per product was significantly higher for households with higher incomes.

According to a company spokesperson, middle-income consumers might have experienced higher grocery prices due to the price increases at major retailers such as Target and Dollar stores. New research also revealed that middle-income households tend to spend more at dollar stores and big-box stores.

In the first quarter of 2022, Target and Walmart reported significant drops in their earnings due to the rising costs. The companies noted that they would pass on some of these costs to their consumers. However, in response to the rising prices, Walmart said it would also lower the prices of general merchandise to make up for the lost revenue.

The data collected by the company revealed that middle-income households tend to spend more at dollar stores and big-box stores. They also spend more on groceries compared to other income groups.