Posted: Jan 26, 2009
Upper Saddle River, NJ - (Jan. 26, 2009) -Supermarket and restaurant chains saw their patrons buy less physical product at the end of 2008, year over year, according to the Food Institute's exclusive Prices Indexes. The Food Institute, based here, found that in December alone "deflated" sales at grocery stores fell 4.7%, after allowing for inflation, while eating and drinking places saw their "deflated" sales drop 6.6%. – among the largest declines the Food Institute has recorded since it began tracking this information two decades ago.
"The impact of higher food prices on both U.S. supermarkets and restaurants is painfully apparent when looking at sales and inflation data from 2008's final quarter," commented Brian Todd, President & CEO of The Food Institute. "While people have to eat, they are opting to do so less often at restaurants, and are carefully traversing supermarket aisles in search of bargains and more economical meal solutions."
Even though there was some slight easing of food-at-home price inflation in the final months of last year, consumers cut back even more sharply on their expenditures at both food stores and restaurants. Operators saw growth in their business plummet to only about 3% in the final quarter as the government's Consumer Price Index for food-at-home hovered above 7%.
Food Inflation last year was at a 19-year high, and, while it is expected to ease somewhat this year, could still top 4%. "Budget conscious consumers, however, will likely be the norm for the foreseeable future, and will continue to look for values," added Todd.
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