Conagra CEO notes 'hunkering down' behavior in grocery shoppers

foxbusiness.com:

Driscoll's of the Americas President Soren Bjorn discusses how food inflation is impacting business and the American consumer on 'The Claman Countdown.' 

The head of Conagra Brands on Thursday revealed a «likely temporary» behavioral shift the company has observed from grocery shoppers in recent months.

During Conagra’s fourth-quarter earnings call, CEO Sean Connolly noted that some consumers were «hunkering down» and «buying fewer items overall,» a move they had done rather than engaging in «trading down» to a less-expensive brand. He did so while he described some headwinds that the food giant expected for the beginning of its fiscal 2024 year.

«Food companies are starting to wrap pricing in the year-ago period, and dollar sales are coming down as expected, but the rate of improvement in volume recovery is lagging. That suggests new consumer behavior shifts beyond the initial elasticity effects that occurred when pricing actions were initially taken,» he told analysts and investors. «We have seen this dynamic since just after Easter, and it has been broad-based across many categories and competitors.»

Connolly pointed to consumers trying to make their overall financial budgets go further as a likely driver of the «hunkering down» behavior.

In June, the price of food overall as measured by the Consumer Price Index experienced a 0.1% increase from May and a 5.7% one over the past 12 months. For food at home, inflation stayed the same month-over-month but has gone up 4.7% year-over-year, according to the Bureau of Labor Statistics.

JUNE INFLATION BREAKDOWN: WHERE ARE PRICES RISING AND FALLING THE FASTEST?

The summer «being more travel-intensive» than 2022’s was one potential explanation that the Conagra CEO mentioned