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Food inflation's tight grip on Americans' grocery budgets

As inflation persistently squeezes consumer wallets, its impact on food security for American households is becoming increasingly apparent. Alarmingly, a study by the Urban Institute reveals that nearly one in five adults have resorted to dipping into savings intended for other purposes to cover their grocery bills.

Yahoo Finance's Brad Smith discusses the far-reaching implications of inflationary pressures within the food industry.

For more expert insight and the latest market action, click here to watch this full episode of Wealth!

This post was written by Angel Smith

Video transcript

Well, if you've been shocked by your grocery bill in the last year or so, you're not the only one.

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A new report from the Urban Institute finds that many families relied on credit and savings to meet their food needs.

In 2023 3.5% of adults used by now pay later for their groceries, and 37% of those who used B NPL reported missing payments on those loans.

Even more shocking, nearly one in five adults paid for their groceries with savings that they didn't intend to use for everyday living expenses.

And if we look closer at who is most affected, the report finds, adults with low food security were more likely to experience debt repayment challenges relative to those reporting less severe food hardship Within the food service landscape, we're seeing many fast food chains try to address the pinched wallets of consumers by offering value meals.

Wendy's, offering a $3 breakfast combo meal and then McDonald's, is running a one month deal beginning this summer for a $5 meal in Taco Bell.

They've also en cloaked a new value meal of their own.

So even as promotional offerings are being introduced from fast food and quick service restaurants.

Top brass that some of the nation's largest retailers are still monitoring the health of consumers across drive throughs and grocery aisles.

Walmart CFO John David Rainy telling Yahoo Finance the consumer has been relatively consistent, adding later, we see that wallets are still stretched and they're looking for value right now.