Palmer, Alaska. Meat counter with various sausages in a Fred Meyer grocery store, a branch of Kroger.
Michael Siluk | Universal Images Group | Getty Images
Rising demand for sausage could be a sign that consumers need to tighten their belts as they continue to struggle with high prices.
One sausage producer saw “modest growth,” according to the Federal Reserve’s Texas Manufacturing Outlook survey released Monday in Dallas, underscoring a trend of consumers opting for cheaper products and cutting back on overall spending as cumulative inflation erodes purchasing power.
“This category tends to grow when the economy weakens,” the respondent said, according to edited comments in the Dallas Fed report. That’s because “sausage is a good protein substitute for more expensive proteins and can ‘stretch’ consumers’ food budgets.”
This anecdote, cited by the astute Bespoke Investment Group on X, comes at a time when food prices remain the most important issue for consumers. While the annual inflation rate has fallen closer to levels considered healthy by economic policymakers, the collective rise in prices compared to just a few years ago has left Americans feeling uneasy about the state of their national economy.
It also supports two themes that are emerging as hallmarks of today’s post-pandemic economy.
A growing number of business leaders, including some of the largest restaurant chains, are warning that consumption is slowly slowing, citing in particular the strain on lower-income tax brackets trying to stretch their money further.
The sausage trend also highlights a development that experts call a “trade-down.” Careless customers may opt for protein products that are usually more expensive, such as steak or chicken. Price-conscious shoppers, on the other hand, may seek out sausage or other cheaper alternatives.
Other food producers who responded to the Dallas Fed survey also expressed concern about their economic situation. One said agriculture as a whole is suffering from pressures from factors such as weather and higher costs.
Another put it more bluntly, saying it was “preparing for recession.”
