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Grocery Shoppers Turn to BNPL

Rising Food Costs Lead Consumers to Buy Now, Pay Later Options

Posted on March 22, 2024
Writer: James Miller

Amid ongoing food inflation, Americans across all income brackets increasingly turn to Buy Now, Pay Later (BNPL) services to manage grocery and takeout expenses. Last year, an estimated 15 million consumers, representing 6.5% of the U.S. population, utilized BNPL plans for food purchases. This is a trend that is expected to continue as food prices remain elevated.

The use of BNPL for essential purchases like groceries signals a broader challenge faced by consumers grappling with higher living costs. While BNPL options offer a temporary solution by allowing payments to be spread over time, they reflect many are experiencing financial strains. The service has attracted users from a wide income range, including those with annual earnings above $100,000, highlighting its appeal beyond traditionally low-income shoppers.

Despite a stabilization in food prices for certain items, food costs remain significantly higher than pre-pandemic levels, forcing households to adjust their spending habits. Many are opting for more affordable retailers or compromising on the quality of food purchased. The use of BNPL for everyday necessities underscores a shift in consumer behavior towards more flexible financial solutions in times of economic pressure.

However, experts caution against overreliance on BNPL services. While convenient, they can lead to debt accumulation if not managed carefully. Attorney and personal finance expert Erika Kullberg emphasizes the importance of responsible BNPL use to avoid financial pitfalls. As consumers navigate the challenges of inflation, BNPL services offer a lifeline, but with the caveat of potential financial risks if not used judiciously.

For more insights on this trend, read the full article on Yahoo Finance.

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