Household financial pressure is increasingly showing up at the grocery store, where more Americans are relying on debt and savings to pay for food, according to a new Urban Institute study released Monday.

The nonpartisan think tank found that more than one-quarter of working-age adults who used credit cards to buy groceries either could not pay their balance in full or missed the minimum payment. About one in 10 adults relied on buy now, pay later loans to cover grocery purchases, and roughly one-third of those borrowers missed a payment during the past year. Around 20% of working-age adults also said they had dipped into long-term savings, including emergency funds, at least once in the previous 12 months to pay for groceries.

Grocery Costs Continue To Squeeze Budgets

The Urban Institute said grocery prices have climbed 32% over the past five years, making food affordability one of the biggest financial concerns for U.S. households. The findings are based on a December survey of 7,500 adults between the ages of 18 and 64.

“Families still need to eat. They will still need to pay for their basic needs,” Kassandra Martinchek, a public policy expert at the Urban Institute and co-author of the study, told CBS News. She added that many households now face the added burden of repaying debt, which could make it more difficult to regain financial stability.

Food prices could also remain under pressure. Earlier this year, the U.S. Department of Agriculture projected the weakest U.S. wheat harvest since 1972, with analysts warning that lower production and higher input costs could gradually push up prices for products such as bread, pasta and cereals.

The study also found that the share of working-age adults who missed a minimum credit card payment after using the card for groceries increased by 1.6 percentage points since 2023. Martinchek said that even a relatively small increase represents millions more Americans struggling to meet minimum payments, calling it a sign of growing financial distress.

Broader Signs Of Consumer Strain

The findings add to broader signs of financial pressure on U.S. households. Earlier this year, data highlighted by The Kobeissi Letter showed serious credit card delinquencies climbed to 13.1% in the first quarter, the highest level since 2010, while student loan delinquencies also reached their highest level since early 2020.

Separately, research published by the Federal Reserve Bank of New York found more households were dipping into savings to cover everyday expenses while food insecurity continued to rise, particularly among lower-income households, families with children and less-educated Americans.

The Urban Institute found financial stress was particularly severe among lower-income households. About 12% of low- and middle-income adults who used credit cards to pay for groceries missed a minimum payment last year, roughly three times the rate among higher-income consumers. Lower-income borrowers were also about four times more likely to miss a buy now, pay later payment.

The report also noted that enrollment in the Supplemental Nutrition Assistance Program, commonly known as SNAP, declined over the past year following stricter federal work requirements, with about 37 million people enrolled as of March.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by a Benzinga editor.

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