A new McKinsey Institute for Economic Mobility and W.K. Kellogg Foundation report identifies affordability as the primary impediment to economic mobility for Americans. The survey of 30,000 people across various income brackets revealed that nine in ten respondents named groceries and food prices as their leading financial concern, surpassing worries about housing and healthcare expenses.
Recent economic data supports these findings. Food prices increased 3% on a year-over-year basis as of June, while grocery store prices also climbed compared to the prior year. A separate Urban Institute analysis released in mid-July documented how many families have turned to credit and savings to manage grocery bills, with concerning signs of financial strain emerging among cardholders. The study found that approximately 35% of adults paid for groceries using credit cards and cleared their balances monthly, while 20% carried revolving balances, and roughly 8.7% struggled to make minimum payments. Over the past five years, food-at-home prices have risen approximately 25%, creating what experts describe as cumulative pressure on household budgets.
Alternative financing methods have also gained prominence as consumers seek ways to manage expenses. According to the Urban Institute data, nearly one in ten adults used buy now, pay later services for grocery purchases, with about 35% of those users missing payments and facing late fees or deferred interest charges. A March survey by LendingTree found that 29% of buy now, pay later users reported using these services for groceries, more than double the 14% figure from two years prior.
Experts note the challenges extend across income brackets. While lower- and moderate-income households experience more acute repayment difficulties, even higher-income earners reported struggles meeting their obligations. Marshall Lux, a visiting fellow at Georgetown University’s McDonough School of Business, cautioned that the situation is multifaceted and difficult to analyze simply. Kassandra Martinchek, a policy expert at the Urban Institute, emphasized that while credit access serves as a critical safety net for families, sustained reliance on it may lead to future financial instability and larger, harder-to-manage debt burdens.
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