Rising food prices have consumers rethinking Thanksgiving spending

SOUTH BEND, Ind. -- As Thanksgiving approaches, consumers are looking for ways to celebrate the holiday without stretching their budgets as food prices continue to rise.

The current inflation rate is 3.7%, while food prices have increased 2% to 3% over the past year and roughly 30% since the COVID-19 pandemic, according to figures cited in the report.

Economists say many of those higher prices are unlikely to return to pre-pandemic levels because businesses continue to face increased production costs.

“It cannot come back. Why? Because they cannot cut your wage. It is impossible to get their production cost lower,” said Tin-Chun Lin, an economics professor at Indiana University Northwest.

With the holiday season approaching, experts say consumers are becoming more conscious of their spending habits and looking for ways to cut costs.

“Consumers are much more price sensitive, so they are taking a step back on what they’re spending and what they’re planning on spending. We saw this quite a bit in our Halloween spending,” said Larissa Adamiec, an assistant clinical professor at Purdue University's Daniels School of Business.

Adamiec said consumers are beginning to prioritize holiday essentials over additional purchases, including decorations and extra food.

Instead, she said families are focusing on traditional celebrations and finding ways to make their holiday meals more affordable.

That could mean purchasing a turkey early, using ingredients already available at home and keeping family traditions at the center of the celebration.

For those planning Thanksgiving on a budget, experts recommend paying attention to when and where they shop.

Both Adamiec and Lin recommended warehouse retailers such as Costco, where consumers can purchase items in bulk and potentially save money.

However, bulk shopping may not be practical for every household, particularly those without the space to store larger quantities of food.

Looking ahead, Lin said energy prices could play a role in determining whether consumers see relief from inflation in the coming year.

“If the oil price drops, then everything price will drop. Once this war can be controlled and the price of oil can be controlled, then the inflation rate can be controlled,” Lin said.