It’s not surprising that spending at grocery stores spiked during the pandemic with people staying at home and many unwilling to go to restaurants. However, it is surprising that spending at grocery stores has remained elevated relative to the pre-pandemic period even with the economy normalizing.
While rising inflation has been a struggle for many businesses, grocery stores are an exception as evidenced by their strong earnings reports and rising margins. So far, they have been able to pass on rising costs to customers, and this trend is likely to continue given a strong labor market and rising wages, especially for those in the upper quartile of incomes.
