States Where People Spend The Most & Least On Groceries – Wallethub Study

With grocery prices having risen more than 25 percent over the past five years, the personal-finance website WalletHub released its report on the States Where People Spend the Most & Least on Groceries to offer insight into where Americans are having the most trouble affording food.

WalletHub analyzed the prices of 26 common grocery items in each of the 50 states, then added these costs together and compared them to the median household income in order to determine where people are spending the greatest percentage of their income on groceries.

To view the full report and your state’s rank, please visit:
https://wallethub.com/edu/states-where-people-spend-the-most-least-on-groceries/144275

Key takeaways and WalletHub commentary are included below in text and video format.

Chip Lupo, WalletHub Analyst, said, “While grocery prices have gone up tremendously in recent years, the states in which people spend the greatest percentage of their income on groceries actually aren’t those with the highest prices. Instead, the median incomes in these states are quite low, so even with reasonable grocery prices, residents end up shelling out a higher percentage of their earnings than people in states with more expensive products.

“People in Mississippi spend the most on groceries, which have an average cost of 2.6 percent of the median monthly household income, the highest percentage in the country. Interestingly, grocery prices in Mississippi are actually relatively low – the ninth-cheapest in the nation. The main problem lies in the fact that Mississippi has the lowest median annual household income in America, at just $52,985. So even with relatively low grocery prices overall, Mississippians are spending a higher percentage of their income on groceries than people in any other state.”

What tips do you have to help people avoid overspending on groceries?
“Reducing your spending on groceries starts by generating a specific menu for the week. This includes meals, snacks, etc. When choosing your weekly menu, you can save by selecting recipes or meals that are more affordable. For example, substitution of ingredients is one simple way to save. Or you might skip an expensive ingredient that is not essential to the meal. Probably the best way to save money is to plan around weekly promotions offered by your grocery store. If canned tomatoes are 25% off this week, plan a meal with canned tomatoes. Smart shoppers take advantage of weekly promotions. Another way to reduce expenses is digital/physical coupons. Consumers who take the greatest advantage of in-store discounts and coupons do considerable planning…Finally, we know that when consumer budgets are stressed due to macro events (job uncertainty, gas prices spike) they tend to ‘trade down.’ Instead of eating out at restaurants twice a week, they go out once a week and the other meal is at home. Instead of buying the highest quality brand, that is typically more expensive, they trade down to a less expensive brand with good quality,” said Eric T. Anderson, Professor and Chair in Retailing, Northwestern University.

“If we are going to consider tips for lowering our grocery bills … we can do all those simple and off-the-cuff things like: make a list and stick to it; buy non-perishables in bulk …; no-impulse buying; and apportion out meals according to actual portion sizes … But when that still doesn't work … we need to as we say in Economics ‘move to a different curve, not move along the same curve.’ So what's that curve? Think through what we actually need, why we need it, what to avoid, and what to maintain. In short, the slow thinking, what I will call mindfulness in decision-making allows us to leave those purchasing biases behind and focus … on what is needed with an eye to inexpensiveness, less waste, more nutrition, and real needs satisfied,” said Mario J. DiFiore, PhD, Senior Assistant Dean; Chairman, SMF Investment Fund; Finance and Business Economics Faculty, Fordham University

How do you think the current social and economic environment is influencing household spending on groceries decisions?
“While consumers tend to trade down, they also are reluctant to cut corners everywhere. They will often carve out affordable items and treat themselves – even when times are tough. Cosmetics and personal care are often given as examples,” Anderson said.