SJM - Food Giants Pivot To Discounts And New Sizes Amid Decreased Spending by Low-Income Americans | Benzinga
In light of the economic pressures on low-income households, leading food corporations are revamping their product lines and marketing strategies. This pivot aims to accommodate the changing spending habits as consumers face financial constraints.
What Happened: Companies such as Kraft Heinz (NASDAQ:KHC) and Conagra Brands (NYSE:CAG) are altering their offerings in response to the decreased spending by Americans dependent on government assistance, Reuters reported on Monday. These changes are a reaction to the persistent price increases over recent years.
Low-income consumers, typically earning below $35,000 a year, are now more inclined to cook from scratch or reduce their purchases, affecting sales volumes for major food and beverage producers. Dollar Tree (NASDAQ:DLTR) CEO Richard Dreiling emphasized the difficulties posed by reduced SNAP benefits during a recent earnings call. At Circle K stores, part of Alimentation Couche-Tard (TSX:ATD), there has been a notable 40% decline in food stamp sales year-over-year, as stated by CEO Brian Hannasch.
Conagra is set to introduce budget-friendly Banquet chicken patties in late May, marking a departure from the premium-centric approach prevalent during the pandemic.
Now food companies must "make sure they are attracting the value buyer back into the fold," said Duleep Rodrigo, U.S. consumer ...