Kraft Heinz’s (KHC) latest quarterly report shows that as companies are raising their  prices, shoppers are pulling back in response to the higher prices.

The producer of Velveeta, Oscar Mayer, and Jell-O, reported that net sales increased in its second quarter 2.6% after it raised prices. However total volumes decreased 7% year over year.

The company forecasts that volume trends will improve in the second half of 2023, and that will continue into 2024.

The results of Kraft Heinz are emblematic of a larger trend among the producers of consumer staples which chose to increase prices as inflation began to erode their bottom line. Despite largely hitting their targets for their top and bottom lines, their absence of growth in volume would indicate that consumers, hit hard by inflation themselves, are trading down to house brands, in response to price increases, or they are reducing their own overall consumption.

The CEO of Coca-Cola (KO) recently observed that consumers, confronted with the effects of inflation on their own buying power as economists are talking about a possible recession coming down the line, were increasingly becoming more cost-conscious across the globe.

During the second quarter earnings call for his company, CEO James Quincey said, “They’re looking for value and stocking up on items on sale.” 

He added, “We have seen some willingness to switch to private-label brands in certain categories. Across the sector, consumers are increasingly cost-conscious.”

Coca-Cola has raised the price of its beverages, as costs increased due to inflation. As a result, the company reported that price/mix, a measure combining price, package size, and product, increased 10%.

As a result, Quincey noted, “Volume was flat, and after a slower start, it sequentially improved, with June being our strongest month in the quarter.”

Procter & Gamble (PG) recently posted results which exceeded expectations as a result of higher prices. However at the same time, global shipment volumes fell 1%.

Jon Moeller, the CEO of P&G, said in an interview of his company’s decline in volumes, it was a “very, very modest decline, which you would expect with the level of pricing that we’ve been taking.”