The Economy's Impact on Snack Purchases and Changing Spending Habits

The American economy is showing signs of strain as rising prices hit even the most common indulgences. In recent months, Americans have been pulling back on their snack purchases – not necessarily for health reasons, but because these little treats have become just too expensive. Snacks like Doritos, Goldfish, and Hostess cakes have seen a drop in sales, signaling that for many consumers, even the small pleasures are feeling the pinch of inflation.

Snack Purchases on the Decline

PepsiCo, Campbell's, and JM Smucker are just a few of the food giants that have reported weak sales in their snack brands. According to the market research firm Circana, salty snack purchases declined by 0.3% during the 52 weeks ending on February 23. The same figure applies to cookies. Despite being everyday items, these indulgent snacks are feeling the impact of the higher prices across the board. So, what’s driving this trend?

While health reasons may factor into the decision to cut back on snacks, it’s clear that many consumers are primarily adjusting their spending habits due to price increases. In fact, according to a recent Tellwut survey:

• 11% of respondents reported cutting back on snacks for health reasons

• 22% cited cost as the primary reason

• 26% mentioned both health reasons and cost

• 23% said they didn’t cut back at all

• 16% said they don’t buy these types of snacks to begin with

So, have you found yourself purchasing fewer snacks lately? It seems that for many, even the smallest indulgences have become too costly to justify.

Price Increases: A Growing Concern

It’s no secret that prices have been on the rise, but the snack aisle has seen some of the most significant price hikes. Since February 2021, overall grocery prices have increased by 23%, while chips have jumped 29%, according to the Bureau of Labor Statistics (BLS). Given the rapid price growth, it’s no surprise that 70% of people surveyed reported noticing the rising costs of chips. Have you noticed the difference in prices? For many, it’s becoming more difficult to justify buying snacks like chips at their current prices.

Tellwut member JOANOFARK commented "Prices are definitely going up, and so is the amount of air that's in the bags of chips...." while Era_1880s agrees, saying "YES. I've noticed chips and cookies going up in price like crazy. So, I don't find it that hard to just stop buying them because they were fluff food anyway, just something I got for snacks or treats. Occasionally Lay's or Safeway brand chips will go on sale for $1.99 a bag and then I'll buy them."

The Rise of Buy Now, Pay Later for Food

As prices climb across the board, some consumers are turning to new payment options to manage their spending. One such trend that’s catching on is the use of "Buy Now, Pay Later" (BNPL) services. Typically used for larger purchases like furniture or electronics, these services are now expanding to cover fast food.

In a recent move, DoorDash has partnered with Klarna, a financial service that allows users to break up their payments into smaller, interest-free installments. This partnership offers consumers the flexibility to pay for their food orders in four payments, or defer them to align with their paycheck schedule. While BNPL services were once reserved for big-ticket items, this new offering highlights the growing need for consumers to manage smaller expenses in the face of rising costs.

Is Buy Now, Pay Later Encouraging Unnecessary Spending?

With more people utilizing BNPL options, the question arises: does this encourage unnecessary spending, especially on things like food? While the ability to spread out payments might seem appealing in the short term, it raises concerns about contributing to growing debt levels in the U.S.

A Tellwut survey on the matter revealed that 64% of respondents feel that offering BNPL options for food delivery could lead to unnecessary spending. It’s a debate that continues to grow as consumers navigate a complex financial landscape.

Tellwut member Caspian wrote "Absurd!This encourages more debt = more control over the people ! People need to learn how to make a peanut butter and jelly because at the rate our government is headed we will be lucky to afford that!" Jeebus44 shared their thoughts, commenting "This is one of the worst ideas I have ever heard. If you need to pay for food delivery in installments you need to seriously reconsider your spending habits.I'm not surprised that this is being offered though. It's another perfect example of a company only caring about their profits and not caring one iota about their customers ."

In Conclusion

As the economy continues to shift, consumers are becoming more selective in their purchases. Rising snack prices are a tangible sign that the cost of living is impacting even the smallest indulgences. The rise of BNPL services for everyday items like food reflects how people are adjusting to manage their finances, but it also raises important questions about long-term spending habits and the potential for debt.

What are your thoughts? Are you cutting back on snack purchases due to rising prices, or do you think BNPL services make it easier to manage everyday expenses? Share your opinions on these growing trends.