How Rising Food Prices Change Demand

We are buying more Hamburger Helper

Our story though is about more than a meal.

Rising Food Prices

With the price of ground chuck soaring by a whopping 15 percent between last January and July, those of us whose wages rose by much less needed to stretch one pound of meat:

We are also spending more on eggs, coffee, and some fruits and vegetables. Needing more for those necessities, we have less for other foods:

Consequently, hoping to stretch pricier purchases. we’ve resuscitated the 50 (or so) varieties of Hamburger Helper like cheeseburger macaroni, spicy BBQ Heat, and Stroganoff. At the same time, we are buying more rice (up 7.5 percent) and beans, and mac and cheese. By contrast, sales are down for discretionary treats like ice cream and cookies.

Our Bottom Line: Inferior Goods

Income is a determinant that usually increases demand when we earn more and decreases it when our paycheck shrinks. The exception though is for inferior goods and services. Defined by economists as those lower quality commodities that we buy more of because we cannot afford a pricier item, inferior goods are a demand exception.

Below, each green line displays the change in demand when our real income declines. For inferior goods, our demand increases while it diminishes for normal goods:

During the past four years, we’ve seen the prices of the food we prepare at home climb by 21 percent. Meanwhile, from August 2021 to August 2025, our average hourly wage was up 18.6 percent from $30.79 to $36.53. Coffee alone is up an eye-popping 20.9 percent, year-over-year. Stepping back, we can see that our real purchasing power has not kept up with the rising food prices.

Above, the rightward shift in demand could have been illustrating the 14.5% increase in Hamburger Helper sales this year. So yes, Hamburger Helper is an “inferior” item whose demand went up as our purchasing power went down.

My sources and more: Thanks to the NY Times, Axios, and The Washington Post for documenting inferior good demand. Always handy, I also checked the St. Louis Fed’s FRED.

Our featured image is from the NY Times.