Budget-constrained shoppers were buying fewer items in stores and have begun to turn more to Kroger's store brands instead of name brands, according to Kroger’s CEO Rodney McMullen.
"Many customers continue to shop premium products throughout the store, including Private Selection, Murray's cheese, and Deluxe Meal Solutions,” McMullen told analysts. “For other customers, whose budget are more directly impacted by food and fuel inflation, they are actively looking for ways to save. We're doing everything we can to help this customer stretch their budgets."
"Rising inflation has consumers rethinking their shopping and eating habits," McMullen added. "We are seeing different shopping behaviors based on how individual customers are experiencing the current inflationary environment."
McMullen also announced to help consumers with rising prices, the company is expanding its Boost membership program nationwide over the next few weeks. The program offers unlimited no-fee deliveries on orders over $35 and with double fuel points with each order.
Kroger, the nation's largest grocery store chain, is the latest major operator to highlight consumer shifts in response to rising prices for food, gas, rent and other goods and services. According to Mark Zandi, the chief economist with Moody's Analytics, the typical US household is spending about $460 more every month than they did last year to purchase the same basket of goods and services.
Inflation reached 8.6% for the 12 months ending in May, according to the latest Consumer Price Index (CPI). Prices for food purchased to eat at home rose 11.9%, the largest 12-month increase since 1979, with eggs up 32.2%, milk prices increasing 15.9% and poultry up 16.6%.