Consumer behavior is rapidly evolving, driven by factors such as inflation fatigue and increased price sensitivity. Recent research comparing consumer sentiment from November 2024 to May 2025 has uncovered a market characterized by heightened price sensitivity, declining optimism, and aggressive value-seeking behavior.
For consumer packaged goods (CPG) brands, the message is clear: master smart pricing and compelling promotions, or risk losing your products from consumers’ shopping carts.
The Price Perception Shift
Today’s consumers are not just feeling the impact of price increases – they are bracing themselves for more. Recent statistics paint a grim picture:
– 84% of consumers now report experiencing price increases on grocery, home, and personal care items, a 16-percentage point increase in just six months.
– Expectations are on the rise, with 66% of consumers expecting prices to continue climbing, up from 47% in November.
– Only 12% of consumers expect any price relief, a significant drop from 33%.
This surge in price pessimism signifies a fundamental shift in how consumers approach spending on essential goods – they are not merely reacting to current prices, but actively preparing for a sustained financial squeeze.
Stabilizing Shelves, Rising Uncertainty
While supply chain challenges have improved, with out-of-stock experiences decreasing from 42% to 31%, consumers remain skeptical. 46% of consumers believe that supply disruptions will persist or worsen in the near future.
The discrepancy between the improving reality and worsening expectations is likely fueled by uncertainties surrounding tariffs, trade policies, and general economic instability. This presents an opportunity for brands to capitalize on the current stability in supply chains while consumer anxiety remains high.
The Rise of the Value Hacker
Consumers are not only more price-sensitive but are also actively seeking value in their purchases. Nearly all consumers (96%) state that promotions influence their buying decisions, with a significant portion ready to act on a good deal immediately.
This value-seeking behavior is strategic and increasingly digital, with consumers leveraging retailer promotions, manufacturer coupons, and third-party cashback apps to stack savings. Digital promotions have shifted from being easily ignored to prime real estate, with 83% of consumers actively engaging with them.
What Brands Need to Do Now
In this challenging environment, brands must make strategic moves rather than just survival tactics. Three key priorities emerge from the data:
1. Make price strategy central, not reactive. With inflation expectations on the rise, brands need to redefine how they deliver and communicate value, avoiding a race to the bottom and demonstrating why their products are worth the price.
2. Elevate promotions from tactic to strategy. Deals are no longer just short-term boosts but integral to how consumers plan and budget. Well-timed and well-placed promotions can make a significant impact at the digital shelf.
3. Design for the high-alert shopper. Today’s consumers are discerning and selective, requiring promotional content that is useful, transparent, and timely. Brands must focus on simplicity and authenticity to resonate with this audience.
The Bottom Line
Price sensitivity is here to stay and is becoming the default shopping mode for most consumers. Winning brands will not be the ones with the loudest campaigns but those with the smartest pricing, clearest value proposition, and most compelling offers delivered precisely when consumers are ready to make a purchase.
For more insights and specific promotional strategies to engage price-sensitive consumers and build loyalty, download The SmartPulse report.
