Spending

How Americans are stocking up on groceries for winter, and what it says about the economy

"This is all a story about positive, productive health behaviors."

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In March and April, when shelter-in-place measures were deployed, many Americans started panic shopping and stockpiling toilet paper, bottled water, and boxed pasta.

This time around, ahead of a perilous winter, people are stocking up again but in a different way.

Though many Americans are still buying cheaper staples such as cow's milk, higher-priced and healthy items such as oat milk, meat alternatives, and fresh produce are experiencing significant sales growth compared to last year, and even compared to the beginnings of the first lockdown in the spring.

Shoppers are no longer in 'crisis mode'

Spikes in sales of higher priced groceries and fresh produce signal that shoppers are accepting this new normal, a mindset that was present during the spring, says Thomas Plante, an adjunct clinical professor of psychiatry and behavioral sciences at Santa Clara University, who studies health psychology.

Much of the panic shopping in the spring had to do with how little consumers knew about the virus and denial that this was going to be a "long-term process," Plante says.

"At first, people were in crisis mode or panic mode," he says. In that mindset, they were making short-term decisions. "People thought they were going to hoard toilet paper and bake all day, but, ultimately, we all adapt. We find a way to habituate."

Now, Americans are "prioritizing health and immunity boosting in their purchase habits," says Greg Doonan, marketing communication consultant at Nielsen. "Health measures are becoming integrated into all walks of life and manner of purchasing for consumers."

In the spring, oat milk sales had increased almost 300% compared to last year, according to Nielsen data. As of November 21, sales were up 148% — down significantly from April but still outselling last year. Meat alternative sales, such as Beyond Meat, were up over 55% from last year in November.

Fresh produce is also seeing a bump in sales. As of late November, lettuce sales were up 27% from last year and crouton sales were up over 23%. Nectarine sales were also up 109%, while jackfruit sales rose 68% and specialty melons, 10%.

People thought they were going to hoard toilet paper and bake all day, but, ultimately, we all adapt.
Thomas Plante
professor of psychiatry and behavioral sciences at Santa Clara University

Sales of healthier items indicate that consumers are thinking long term about how they can remain healthy while in lockdown. The same way Americans came to terms with mask mandates and social distancing, they have also accepted the fact that they need to get back to eating foods that are good for them, Plante says.

"This is all a story about positive, productive health behaviors," Plante says. "It's hard to get people to behave in a way that's for their own self interest and trying to get people to do basic behavior change."

Higher-income shoppers are driving the trend

Not all Americans are feeling the effects of the recession and pandemic the same way, says Wendy Edelberg, director of The Hamilton Project, and that's apparent from consumer behavior.

"Higher income people are actually saving a lot of money right now," she says. "Their expenses on all sorts of discretionary expenditures, like going out to restaurants, traveling, entertainment, those expenditures are way down right now. It does not surprise me that they are going to the grocery store and splurging because they are saving in lots of other aspects of their lives."

This phenomenon of high earners and financial markets doing well while low earners and the general economy struggle is known as a "K-shaped recovery."

While fresh lettuce and fruits are more broadly accessible, higher-priced groceries experiencing significant sales growth, like oat milk and meat alternatives, are not affordable to all. "Some people are just awash in financial resources right now and they are looking for things to splurge on to bring some joy to the painful pandemic," Edelberg says. "Other people, even though they are experiencing the same struggle of social distancing, are not awash in financial resources."

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