Middle class & food retailers looking for the right price

In nearly a year since the Pew Research Center documented middle-class struggles, the prices of food and other essentials have only gone higher.

The middle class is struggling financially. Not simply due to a slow recovery from the recession, but also as part of a long-term wealth distribution shift in America. In nearly a year since the Pew Research Center documented middle-class struggles, the prices of food and other essentials have only gone higher. The Pew report, The Lost Decade of the Middle Class, shares the following data: • 85% of self-described middle-class adults say it’s more difficult now than a decade ago to maintain their standard of living. • Middle-class incomes have shrunk in size over the past four decades. In the past decade alone, the middle-class median income fell 5%, but median wealth fell 28%. • The middle class includes 51% of adults who bring in 45% of the nation’s income—down from 61% in 1971 who brought in 62% of income. • 62% of middle-class Americans said they had to reduce household spending in the past year because money was tight, up from 53% who said the same in the recession year of 2008. As a result, pricing will continue to be a highly sensitive issue for food retailers. So far operators such as Aldi, Save-A-Lot, dollar stores, and clubs have dominated traditional supermarkets. And the pricing challenge will continue to mount as online food sellers bring new efficiencies and conveniences to shoppers, often for a nominal difference of delivery fees—which Millennials and time-stressed households often willingly pay. The Lempert Report urges retailers and CPG to find their own pricing sweet spots with consumers, the fair value they can charge while yielding the margins and sales growth they need.