Consumers Push Back on High Prices, Forcing Companies to Moderate Hikes

Consumers are pushing back against high inflation by shifting to cheaper store brands, shopping at discount retailers, and buying fewer discretionary items. This is forcing companies to moderate price hikes.

High prices have changed how consumers shop and behave, unlike the 1970s when high inflation became entrenched. Consumers today are quicker to alter habits to save money.

Companies like Kraft Heinz and PepsiCo exploited supply chain issues and inflation to sharply raise prices and boost profits in 2021-2022. But they've pulled back as volumes fell due to consumer resistance.

Lower income consumers in particular are struggling with inflation, running up credit card debt and falling behind on payments.

Officials say consumer reluctance to accept high prices is a key reason they expect inflation to continue falling. Companies across industries are now planning smaller price hikes this year.