It feels like a contradiction: Higher prices, stable spending. It’s not. Shoppers have plenty of options to shop smarter – and even eat better – despite higher prices.

Source: Empower Personal^TM Dashboard, July 2024. 

The substitution hack

The table below, based on the Bureau of Labor Statistics’ vast database of price surveys, shows price increases for various categories of food over the three-year period from July 2021 to July 2024.²

This or that: potential substitutes for high-inflation food 

**Price increase since July 2021

**Price increase since July 2021

These alternatives aren’t equivalent, of course. Price is just one differentiator.

Time also has value. Shopping for ingredients, preparing a meal at home, and cleaning up costs more time compared to a takeaway. Most Americans believe their Time is Money, some would rather spend more for prepared meals in order to get personal time back. 

Adding the sizzle back to the steak

Hacking the CPI doesn’t have to mean buying the cheapest alternative. The rate of price increases (inflation) doesn’t factor in actual retail prices.³ As the table shows, ground beef prices have risen almost twice as much as those of steak, but steak still costs more.  Cheeses, particularly specialty cheeses, may not be the cheapest items in the dairy case, but they have become relatively more attractive because their prices have risen more slowly than other dairy items.³ For some luxury food connoisseurs, inflation trends have made it easier to stomach an expensive purchase. For example, the wholesale prices for Wagyu beef from Japan have been at a four-year low. However, it will still set you back $150 to $300 per pound, according to Nikkei Asia.

Shopping with agency

Retailers use shelf placement, product packaging, location of displays and the entire shopping environment to guide you towards higher-margin items and preferred vendors.⁴

Think about how the average local supermarket is laid out. Near the entrance are bins of fragrant, colorful fresh fruits and vegetables. Follow the perimeter past sections for fresh bakery goods and deli items. Notice which products are placed at eye level, in end-of-aisle displays and lining the path to the checkouts.

A little checklist while grocery shopping can lead you to an optimal balance among the factors you value. If you want convenience and health, inexpensive alternatives exist that are also convenient and healthy. If you want luxury, some items are a better deal than others. The trick is finding them. Savvy shoppers follow some basic rules:

1. Informed decision-making: They research prices, compare options and stay aware of market trends.
2. Mindful shopping: They make lists, stick to budgets and avoid impulse buys, focusing on needs over wants.
3. Flexibility and adaptation: They adapt their purchasing habits, such as opting for private label brands or bulk buying when prices rise.