Food Purchases During Inflation: Search for Lower Prices and Selective Reduction in Demand

In a context of high food inflation in 2022, this study analyzes how household consumption behaviors adjusted in response to rising prices, using scanner data from a retail group between 2021 and 2022. The study reveals an intensification of households’ budget optimization strategies: seeking lower prices, reducing quantities, and changing the composition of their food basket. Access to a diversified retail offering amplifies these adjustments: in areas with better access to food retail stores, price sensitivity and the fragmentation of purchases are more pronounced. When the price of a product increases by 1%, we estimate that the demand for that product decreases by an average of 0.6%. The reduction in demand is less significant for essential goods and the cheapest products in their category—low-end items or those with smaller packaging—which tend to replace more expensive products. In contrast, the demand drop is greater for non-essential and storable items, such as alcohol and chocolate, and for expensive but substitutable products like meat and fish.