According to research from the McKinsey Institute for Economic Mobility and the W.K. Kellogg Foundation, affordability represents a critical barrier to economic mobility across the United States. The study surveyed 30,000 Americans and found that food and grocery expenses dominate household financial concerns, surpassing other major cost categories. Rising living costs are widely perceived as obstacles to financial advancement, creating widespread anxiety about economic stability.
Food price inflation has remained persistent, with recent data showing year-over-year gains of 3% as of June. The trend reflects broader consumer price pressures, though general inflation moderated during the month. Data on grocery store prices specifically also indicated increases compared to the previous year, with additional analysis expected when new consumer price index figures become available mid-month.
A separate analysis by the Urban Institute found that household financial strain related to food costs has prompted significant reliance on credit. The study of more than 10,000 adults found that approximately 35% used credit cards and paid balances in full monthly, while another 20% carried revolving debt. Additionally, roughly 8.7% struggled to make minimum payments. Over the past five years, food-at-home prices have increased approximately 25%, creating cumulative pressure on household budgets.
Emergent payment methods like buy now, pay later services have gained traction for grocery purchases, with nearly 1 in 10 adults using such programs. Among those relying on installment payments, about 35% missed payments, potentially incurring fees or deferred interest charges. A separate survey found that 29% of buy now, pay later users have accessed these services for groceries, doubling from 14% two years prior.
While lower and moderate-income households experienced greater repayment difficulties, higher-income households also reported struggles, indicating the affordability challenge extends broadly across income levels. Experts note that sustained reliance on credit to manage food costs can create longer-term financial instability for households.
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