The new price reality: Why 84% of consumers have seen rising costs and how brands must respond

There is a rapid shift in consumer behavior, driven not only by inflation fatigue but also by increased price sensitivity, declining optimism, and a strong focus on seeking value. This shift is evident in the comparison of consumer sentiment from November 2024 to May 2025.

For CPG brands, the key to success is mastering smart pricing and compelling promotions, as failing to do so may result in their products being removed from consumers’ shopping carts.

The Changing Perception of Prices

Consumers are not only feeling the impact of price increases but are also anticipating further hikes. The statistics paint a clear picture:

• 84% of consumers have noticed price increases on essential items, marking a 16% increase in just six months.
• Expectations for future price hikes have also risen, with 66% anticipating further increases compared to 47% in November.
• However, only 12% believe prices will decrease, down from 33% previously.

This surge in pessimism regarding prices signifies a significant shift in consumer spending behavior, as individuals are not just reacting to current prices but are actively preparing for continued financial pressure.

Stabilizing Supply Chains Amid Rising Uncertainty

While there has been improvement in supply chain stability, with a decrease in out-of-stock experiences from 42% to 31%, consumers remain skeptical about future disruptions. 46% believe that supply chain challenges will persist or worsen in the near future.

This discrepancy between the improving reality and consumer expectations is likely fueled by uncertainty surrounding tariffs, trade policies, and economic instability. Brands have a limited opportunity to capitalize on stocked shelves amidst consumer anxiety.

The Emergence of Value-Conscious Consumers

Consumers are not only more price-sensitive but are actively seeking value in their purchases. Nearly all consumers, 96%, indicate that promotions influence their buying decisions.

• 37% are highly likely to act on a good deal
• 19% make immediate purchases in response to the right offer

This value-seeking behavior is strategic, disciplined, and increasingly digital:

• 72% actively utilize retailer promotions
• 65% search for manufacturer coupons
• 34% leverage third-party cashback apps for additional savings

Previously overlooked, digital promotions now hold significant importance, with 83% of consumers actively engaging with them rather than ignoring them.

Key Strategies for Brands

The current landscape necessitates strategic actions rather than mere survival tactics. The data highlights three primary focus areas:

1. Centralize price strategy as a proactive approach. With increasing inflation expectations, brands must redefine how they deliver and communicate value, avoiding a race to the bottom and demonstrating the worth of every dollar.
2. Elevate promotions from tactics to a strategic imperative. Promotions are no longer short-term boosts but integral to consumer planning and budgeting. Well-timed and well-placed promotions can significantly impact sales at digital points of purchase.
3. Design for the discerning shopper. Today’s consumers are astute, skeptical, and selective, requiring promotional content that is practical rather than gimmicky. Transparency, simplicity, and timing are paramount in engaging consumers.

The Final Verdict

Price sensitivity is a prevailing trend that is here to stay, representing a permanent shift in consumer behavior rather than a temporary response to economic pressures.

Successful brands will not be those with the most aggressive marketing campaigns but those that offer the most strategic pricing, clear value propositions, and compelling deals precisely when consumers are ready to make a purchase.

Access The SmartPulse report for comprehensive insights, along with tailored promotional strategies to transform price-sensitive consumers into loyal patrons.