Blue Yonder has announced the results of its 2025 Global Consumer Sentiment on Grocery Inflation Survey, revealing how sustained inflation, supply chain challenges and global tariffs are influencing grocery spending and broader consumer behaviour across generations and regions. The survey, which polled consumers across Australia and New Zealand (ANZ), France, Germany, the Middle East, the U.K., and the U.S., found that 85 per cent of overall respondents are concerned about inflation’s impact on grocery prices, illustrating consumer unease and clear changes in purchasing decisions across the world.
“The findings of this survey underscore just how widespread and deeply felt the impact of inflation is on consumers’ everyday lives,” said Ben Wynkoop, senior director, Global Industry Strategist, Grocery & Convenience, Blue Yonder. “From buying fewer grocery items and cutting back on alcohol purchases to shopping at discount retailers and reprioritising spending across other categories, consumers are navigating prolonged uncertainty — and retailers must adapt accordingly.”
Inflation drivers: Tariffs, rising labour and materials costs and increased profit margins
Nearly half (49 per cent) of all respondents believe newly introduced global tariffs are the leading factor behind inflated grocery prices, followed by increased costs for raw materials (42 per cent), increased labour costs in manufacturing and food processing (39 per cent), and increased profit margins for brands and manufacturers (33 per cent).
The perceived top factor driving inflated grocery prices differs across regions. Consumers in the U.S. (65 per cent), the U.K. (56 per cent) and the Middle East (50 per cent) feel global tariffs are the leading cause of rising prices. Consumers in ANZ (50 per cent) feel that increased profit margins for brands and manufacturers is the top factor for inflated prices, while consumers in France (48 per cent) and Germany (47 per cent) believe the increased cost of raw materials is the leading cause of grocery inflation.
There is a generational divide, too. Baby Boomers uniquely believe that increased labour costs in manufacturing and food processing are the leading cause for grocery inflation (52 per cent), whereas all other generational groups believe global tariffs are the top cause of inflated prices.
“In today’s global market, tariffs are significantly impacting grocery supply chains, resulting in inventory and logistics challenges, as well as increased costs for both retailers and consumers,” said Wynkoop. “Leveraging advanced technology for AI- and ML-driven scenario planning and visibility across the end-to-end supply chain can help grocers mitigate tariff-related disruptions by increasing agility, resilience and cost savings.”
Across categories, consumers are buying less – and shifting shopping behaviours
Inflation’s grip on grocery bills is triggering global concern from consumers. Almost two-thirds of consumers (65 per cent) report they would buy fewer grocery items across categories to cope with price increases, while 42 per cent would shop at discount and wholesale stores. In addition, approximately one-third would prefer shopping based on promotions and discounts (36 per cent) and switching to private label brands (34 per cent). Alcohol is facing the biggest budget cuts compared to other grocery categories, with one-third (33 per cent) of consumers saying they would reduce alcohol purchases in response to inflation price increases.
“During times of economic uncertainty, consumers often look for ways to save money on essential items such as groceries, from shopping at discount stores to seeking out sales and opting for private label brands,” said Wynkoop. “As a result, retailers tend to prioritise and invest more heavily in their owned brands to accommodate these changing shopping behaviours. Sophisticated retailers are becoming more vertically integrated from production to consumer to maintain greater control over their supply chain, increase profitability and deliver more affordable products to shoppers.”
Clothing and footwear top the list of cutbacks consumers are willing to make
To offset high grocery costs, many consumers noted they would be willing to cut back on discretionary spending. More than half (56 per cent) of respondents are willing to cut back on clothing and footwear – this was also the top response by generations and regionally. Other top categories consumers are willing to cut back on include consumer electronics (46 per cent), streaming/gaming subscriptions (43 per cent), personal care and beauty (36 per cent), appliances (33 per cent), and automotive purchases (28 per cent). Only 7 per cent of respondents were not willing to reduce their other retail spending to offset grocery costs. Generationally, Baby Boomers are most likely to scale back on clothing and footwear (63 per cent), compared to Gen X (59 per cent), Gen Z (53 per cent) and Millennials (50 per cent).
Globally, consumers in ANZ are the most likely to reduce spending on clothing and footwear (67 per cent), followed closely by the U.S. (62 per cent), the U.K. (61 per cent), France (49 per cent), Germany (49 per cent), and the Middle East (47 per cent). The next top category varied by country, with ANZ (60 per cent) and U.K. (54 per cent) consumers most likely to reduce spending on streaming and gaming subscriptions, followed by Germany (42 per cent), the Middle East (40 per cent) and France (39 per cent) willing to reduce spending on consumer electronics. These two categories – subscriptions and consumer electronics – were tied for U.S. consumers (54 per cent).
“With most consumers willing to adjust shopping habits in response to grocery inflation and mounting financial pressures, retailers – not just grocers – need to recognise the importance of building trust with shoppers through transparency, targeted promotions and affordability-first strategies,” Wynkoop added. “Having the right supply chain solutions can help retailers win with consumers during times of both economic prosperity and difficulty.”
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