A recent Federal Trade Commission report found major grocers nationwide are overcharging customers for groceries. Retailers’ revenues were 6% higher than their total costs in 2021, and then jumped to 7%, despite an easing of pandemic-related supply-chain disruptions.
Massachusetts residents struggling to pay high food prices are acquiring a growing amount of debt to pay their bills, according to a new report.
The Urban Institute found 60% of adults reported using credit cards to buy groceries but only 20% managed to pay the minimum monthly payment.
Kassandra Martinchek, senior research associate at the Urban Institute, said nearly 25% of families have dipped into savings to keep everyone fed.
“Some families are really struggling to even meet their basic needs and are taking riskier financial strategies that could leave them less capable to cope with a future financial shot,” Martinchek pointed out. “Something like losing their job.”
While U.S. inflation slowed last year, the average Massachusetts household continued to spend more than $270 a week on groceries with Boston ranking in the top 20 cities with the highest grocery prices.
The report shows adults with very low food security were also more likely to experience challenges in repaying their debt compared with those with less severe food hardship. For families taking advantage of “buy now, pay later” options, 37% reported missing payments on their loans.
Martinchek emphasized missed debt payments during a time of price hikes could have long-lasting effects.
“They could have constrained access to affordable credit options and struggle to take advantage of different wealth building opportunities,” Martinchek noted.
Martinchek added it is especially the case for historically disadvantaged households. The report suggests policymakers strengthen social safety nets to help families as pandemic aid expires, and to bolster credit counseling and debt-management services.
