DEBBIE ELLIOTT, HOST:
Changes might be coming to your supermarket. People are fed up with the high cost of chips, laundry detergent, you name it. And now prices are the talk of the business world these days as a long list of household brands are reporting their earnings to investors. NPR's Alina Selyukh is here with an update. Hi. Thanks for being on the show.
ALINA SELYUKH, BYLINE: Thank you.
ELLIOTT: So you've been listening in on all these earnings calls. Give us the scoop.
SELYUKH: Well, so the companies I listen to are some of the giants like Coca-Cola, Unilever, Kimberly-Clark, Colgate-Palmolive. And one big takeaway is that companies are definitely aware that you hate their higher prices, and they are starting to feel it. They are seeing people like Ariane Navarro from Houston picking the store brands over the big names she used to buy.
ARIANE NAVARRO: We used to buy Bounty and Charmin. Now it's like it doesn't matter. We're sticking a lot to the Kirkland brand, which is a Costco brand, and the Amazon Basics.
SELYUKH: And so these giant brand conglomerates are now saying, maybe we got to cool it on the pricing thing. I don't want to say there's big talk about lowering prices for good but definitely more talk about slowing down price increases and doing a bit more promotions, so maybe like discounts or deals. You know, everyone loves - buy one get one free sort of thing.
ELLIOTT: Right. Right. So what's motivating them now to curb prices? Is it purely because of changes in consumer behavior?
SELYUKH: Well, that's the - definitely the biggest power shoppers have, voting with their wallet. And for years now, consumer brands have been raising prices, blaming their own higher costs of ingredients and wages. And it took a while for them to start noticing people meaningfully pushing back on those prices.
In fact, shoppers this year are actually buying more groceries than last year. You still have, for example, Colgate-Palmolive saying, its advertising is keeping shoppers reaching for that brand-name stuff despite higher prices. But some of the companies are seeing big cracks, people buying fewer of their items and switching to cheaper brands - like Nestle, which also owns Nescafe and Gerber baby food, Kimberly-Clark selling less toilet paper and tissue, Pepsi selling less chips and soda.
ELLIOTT: Let's shift to the big picture now. Does this shopping behavior tell us anything about the broader economy?
SELYUKH: As always, it's quite complicated. There are many contradictory signals. It is clear that people are still out shopping. Last week, federal data showed that consumer spending in the last quarter rose more than expected. And earlier this month, people spent a record amount on Prime Day sales, estimated $14 billion on appliances, electronics, back-to-school supplies.
It is also clear that all this varies by income. It's much trickier for folks with lower and middle incomes, folks putting stuff on credit cards with high interest rates. Here's how Coca-Cola's CEO, James Quincey, summed it up.
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JAMES QUINCEY: Definitely, there's a piece of the lower-income consumers which are either going out slightly less or, when they do go somewhere, looking for greater value through combo meals. Having said that, there are just as much consumers spending on more premium categories or more premium price points.
SELYUKH: Many people are going out to eat and drink a lot less. Everyone is hunting for deals, but some people are putting those extra going-out dollars toward their favorite premium brand at the grocery store. And all that adds up to a resilient economy, if you want to use that jargon.
ELLIOTT: So, Alina, what are you tracking next?
SELYUKH: So this week is a big one. We get more clues about the American consumer from McDonald's, Kraft Heinz, Procter & Gamble and Amazon. There's also the meeting of Federal Reserve officials, where they will once again discuss lowering interest rates later this year.
And all of this is connected, obviously, because few of us are watching prices with as much interest as the Fed. Its quest is to cool down inflation by slowing the economy but not too much, which, of course, means spending would slow down also. And so far, inflation has been cooling. The economy has been slowing. But how much further will it go? That's unclear.
ELLIOTT: NPR business correspondent Alina Selyukh. Thanks so much.
SELYUKH: Thank you. Transcript provided by NPR, Copyright NPR.
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