85% Cut Back: How Consumer Trends Impact Your Supply Chain

Grocery price inflation is no longer just a consumer issue – it is now a direct concern for Chief Supply Chain Officers (CSCOs) managing end-to-end operations.

Blue Yonder’s '2025 Global Consumer Sentiment on Grocery Inflation Survey' paints a clear picture: shoppers across major global markets are cutting back, reprioritising spend and scrutinising brands. These shifting behaviours will have a direct impact on sourcing, stock planning, promotional strategies and margin management.

Blue Yonder commissioned the third-party survey in May 2025, collecting responses from more than 6,000 consumers across Australia and New Zealand (ANZ), France, Germany, the Middle East, the UK and the US.

The vast majority (85%) of respondents globally say they are worried about the impact of inflation on grocery prices – and this rises to 86% among UK shoppers.

In practical terms, 65% of global consumers say they are buying fewer items across grocery categories. This trend is reflected evenly across regions – 66% in the UK alone. CSCOs should expect reduced unit volumes across categories, which could affect demand planning, supplier contracts and shelf space decisions.

Some categories are being hit harder than others. Alcohol tops the list, with 33% of global consumers planning to cut back (37% in the UK). These behavioural shifts could require agile planning tools to adapt allocations, adjust seasonal buys and avoid stock overages.

Tariffs and rising costs

The findings lay out why consumers think prices are climbing – and the implications ripple across every part of the supply chain. Almost half (49%) of respondents believe global tariffs are the leading cause of inflated prices. Others cite rising raw material costs (42%), labour cost increases in manufacturing and food processing (39%) and higher brand profit margins (33%).

Tariffs are a particular concern in the US (65%), UK (56%) and the Middle East (50%). In contrast, profit margins are top of mind in ANZ (50%), while raw material costs dominate in France (48%) and Germany (47%). Supply chain leaders need to be alert to these regional differences when tailoring strategy.

Baby Boomers present a different view – 52% of them believe labour costs are the top cause of inflation. This generational divide may not affect supply chains directly but reflects diverging perceptions that could influence brand positioning and communication.

Ben Wynkoop, Blue Yonder’s Senior Director and Global Industry Strategist for grocery and convenience, explains the operational consequences: “In today’s global market, tariffs are significantly impacting grocery supply chains, resulting in inventory and logistics challenges, as well as increased costs for both retailers and consumers.”

To stay ahead, Ben suggests adopting scenario planning powered by AI and machine learning (ML) and investing in visibility tools across the supply chain to improve resilience and flexibility.

Discretionary cutbacks signal risk 

It’s not just groceries being scrutinised. To keep food bills manageable, 56% of global respondents say they are willing to reduce spending on clothing and footwear – rising to 61% in the UK. This trend is consistent across generations and geographies.

Other categories under pressure include consumer electronics (46%), streaming and gaming subscriptions (43%), personal care and beauty (36%), appliances (33%) and even automotive purchases (28%). Only 7% of respondents globally are unwilling to cut back.

ANZ consumers are the most prepared to pull back spending on fashion (67%), followed closely by the US (62%) and UK (61%). Streaming and gaming subscriptions are another common target, with 54% of UK respondents prepared to reduce spend in this area.

The lesson for supply chain leaders is clear: as consumers move spend away from non-essential categories, CSCOs must reassess inventory strategies, promotional investments and supplier agreements across multiple product areas.

There is also an emerging opportunity. As Ben puts it: “Sophisticated retailers are becoming more vertically integrated from production to consumer to maintain greater control over their supply chain, increase profitability and deliver more affordable products to shoppers.”

Private label is gaining traction too, with 34% of consumers switching away from branded items. Retailers are responding by investing more heavily in their owned brands – a strategy that requires CSCOs to rethink sourcing, production partnerships and quality control.

As shopper preferences continue to shift, those with the right supply chain tools, data insight and agility will be best placed to adapt.

From managing the impact of global tariffs to responding to inflationary cutbacks, CSCOs have a growing role to play in customer satisfaction and brand survival.

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