Companies need to rethink their strategies and stop taking consumers for fools if they want to navigate the increasingly challenging landscape in grocery aisles, said Bob Vergidis, chief vision officer at Point-of-Sale Cloud. Simply put, most consumers are fed up with high food prices.
In an interview with The Food Institute, Vergidis discussed some of the mistakes companies are making that trigger consumer backlash – and the answer isn’t simply higher prices.
With the inflation rate at 3.8% and indications it will go higher in coming months, the landscape is especially treacherous.
What some companies have forgotten in the push to maintain profit margins in the immediate future is that they need to take a longer perspective that convinces the consumer the product is worth the asking price. Product, placement and promotion are what should be determining price.
“I think the human mind always evaluates value, right? So, we look at what we give and we compare it to what we get as a result. And then our brain is highly biased. It has an anchoring bias on what it knows,” Vergidis said.
“So, if we paid X for this product in the past … and now this product is two times X, we notice the difference, and then we check to see if the value we’re getting is twice the value.
“If our calculus in our head tells us that we’re being taken advantage of or the value is no longer there, then it destroys the trust that we put in a brand.”
And once that trust is broken, it’s difficult for companies to win it back. This is especially true of legacy brands, which have a nostalgia factor and built-up emotional response among consumers.
Reese’s Reversal Shows Transparency is Key
The recent flap over Reese’s Peanut Butter Cups is a prime example of consumers’ frustrations these days. After the grandson of Reese’s founder criticized the company for using cheaper ingredients, the company announced it would go back to the original recipe.
The consumer “can instantly tell the difference [when a company moves to cheaper ingredients]. And that’s one of the mistakes companies are making,” Vergidis said. Brands then compound that mistake by raising prices and/or shrinking sizes and not explaining themselves to consumers. “They’re taking for granted that consumers will show up,” Vergidis added.
Marty Bauer, e-commerce and retail expert at Omnisend, agreed.
“More than higher prices, customers can’t stand being taken for a fool. If you’re honest and straightforward about it, they typically tolerate price increases. Especially if the reasoning is legitimate (price hikes of materials, logistics costs, etc.). However, as soon as they feel deceived, it all changes,” Bauer said.
Price Hikes Hit a Wall
Shikha Jain, the lead partner for consumer at Simon-Kucher, the commercial growth and global pricing consultancy, said consumers generally are OK with a 5% price increase, but begin to look at a product more closely when the price shoots up 10%.
Restaurants are better at navigating the situation because they have the ability to create value through experience – creating lounge areas for people to hang out while waiting for takeout orders, for example.
Take the case of the $6 doughnut.
“There are companies out there that sell a single donut for $6; there’s one in Las Vegas that does that. And it’s packed. There are people out the door,” Vergidis said. “There are people trying to sell doughnuts for $6 for a dozen and they cannot sell one. And this company is selling one for $6 and they have a line out the door. And that’s because they made a special doughnut.”
The Food Institute Podcast
At SIAL Canada 2026 in Montreal, Food Institute VP of Content and Insights Chris Campbell sat down with Mathieu Brisson, Global Sales Lead at Prestige Maple, to discuss how the company is transforming maple products for a rapidly evolving global food and beverage market.
