(KMAland) — Using results from the Gardner Food and Agriculture Policy Survey, University of Illinois researchers found that while they are frustrated by price hikes, most consumers feel that food prices at grocery stores are at least somewhat “fair.”
This is especially true at dollar stores and discount grocery stores, says Maria Karaitsandonakes.
“We found that while consumers are generally unhappy with high prices, they believe grocery store prices are relatively fair. This is especially true for certain types of stores, such as the discount stores you mentioned – Aldi, Ruler Foods, etc. So 37.5 percent, almost 40 percent of consumers said that high grocery prices have led them to visit these types of stores more frequently. This is true for dollar stores as well, with 35.9 percent of those surveyed saying that high grocery prices have led them to visit dollar stores more frequently.”
Restaurants, especially fast food restaurants, didn’t fare too well in the survey. A majority of consumers believe prices at fast food restaurants are unfair, with more than half saying prices have made them use the drive-thru or stop in less often. More importantly, how do consumers view drive-thrus?
“Our findings are consistent with those seen in other studies and media reports: Consumers are unhappy with prices, especially at restaurants. That means consumers are visiting fast food restaurants less frequently due to rising food prices, and they view prices, especially at fast food restaurants, as unfair. On the supply side, we’re seeing fast food restaurants respond to this trend and try to lure customers back — a trend that has been affectionately dubbed the “burger wars” — and I put air quotes on that term. But places like McDonald’s and Burger King are offering temporary discounts to reinforce the impression that they can and should get a good deal, in an effort to get customers to visit more often.”
The bottom line is that consumers are looking for better value when dining out and inside, and most importantly, they’re unhappy with high food prices. But when researchers at the University of Illinois dug deeper into the survey, they uncovered some interesting developments regarding how much price increases consumers are willing to accept.
“I thought that was the most interesting part that we found. Consumers say they are willing or able to accept price increases for a variety of reasons. So, they are relatively in favor of price increases to cover things like increased raw material costs. We found that over 55% of consumers, both in grocery stores and restaurants, understand that that’s why prices and inflation go up and feel that it’s acceptable. Same for employee wages. Consumers are not in favor of price increases to help improve profitability. This is a criticism that we’re seeing especially in the media coverage right now, but also from some politicians, that food companies and restaurants may be making too high a profit margin. And about 15% of consumers surveyed went further to say that there is no reason at all to increase food prices and that companies in the food supply chain should reduce their profit margins. So, that was a very interesting finding, and we’re looking forward to continuing to unravel this in our future research.”
If you would like to read more from the Gardner Food and Agriculture Policy Study, you can read it online now on the farmdoc Daily website. Search for “food prices” and look for titles that include the words “fair prices.”
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