Recently, I read an article about consumers returning to historical purchasing patterns as it relates to food that struck a chord with me. We are slowly exiting a high inflation period but food inflation remains stubbornly high (about 8.5%). Many consumers continue to make difficult economic and purchasing decisions to stretch their food dollars. This includes trading down from premium food items to less expensive cuts of meat and cheaper store brands.
I started to think about these choices and the linkage to Maslow’s hierarchy of needs. The first two slices of the pyramid are “Physiological Needs” which relate to basic survival and “Safety and Security” which is where financial uncertainty comes into play and where our ability to fulfill our basic needs are challenged, leading to frugal behaviors. The article goes on to say that the need to trade down and the constant search for the lowest prices on weekly items has resulted in a new term for me, “frugal fatigue”.
With economic pressures starting to ease, consumers are beginning to make more discretionary purchases, starting to focus on themselves and their emotional needs. This is the climbing of Maslow’s pyramid up two steps to “Esteem” where people are seeking respect, self-esteem and status. As a result, consumers should go back to more normal spending habits, purchasing products with more premium attributes. Hopefully, food producers and ranchers will benefit from future trading up. The question will be, can supply match changing consumer dynamics?