CHICAGO — Consumers have long memories, which means sales and promotions at grocery stores and restaurants don’t seem like bargains right now because prices are 30% higher than they were five years ago.

“It's almost like the elephant memory where no one's forgetting what the prices used to be. Therefore, when they go into the stores expecting to find the prices they used to pay, they're not there,” said Sally Lyons Wyatt, global executive vice president and chief advisor, consumer goods and foodservice insights, Circana.

She was part of a panel discussion “How Rising Food Prices Create Challenges and Opportunities” at IFT First, the annual food science and innovation expo held July 14-17 in Chicago.

“Promotions have not seen the same kind of lifts in the last 18 months,” Lyons Wyatt continued. “They don't feel like a deal because you're starting at that 30% or more higher prices. There's got to be a recalibration in the consumers’ mindset.”

The topic is a timely one as brands are feeling the cutbacks by consumers, said panel moderator Dale Buss, contributing editor, Food Technology. He mentioned recent headlines from Frito-Lay North America, Plano, Texas, and Conagra Brands, Chicago, reporting declines in sales because of cutbacks from cost-conscious consumers.

As consumers seek out cheaper alternatives to their favorite brands, foodservice and food manufacturers are looking for ways to bring customers back.

“McDonald's and Wendy's and Starbucks for the first time that I can remember in my history are coming out with some bundled deals to try and get consumers back in the door,” Lyons Wyatt said. “At the same time, you have Walmart and Target and other retailers reducing some pricing.”

The panelists agreed that premium products as well as innovation is a way to get consumers excited and boost sales.

“Food is an affordable luxury compared to other things,” said panelist Jeff Grogg, founder and managing director, JPG Resources. “I can’t buy the house I want to buy. I can’t buy the car I want to buy, but I can invest that extra 20 bucks and have a better experience … I’m going to go out less, but I want it to be better. You need to deliver on the premium. You can’t just price it there, you need to deliver there.”

Lyons Wyatt talked about how social media can play a role in boosting sales, but brands need to be smart about it.

“Those can help educate, those can help gain excitement, those can help influence what consumers buy, whether it's from an influencer or a well-known name or the marketing person in your organization,” she said. “Just getting the word out in education, that is one of the biggest roles it can play. But on top of that, probably the top three is generate excitement — generate a buzz — educate and really embrace the consumer with what they're trying to do.”

Panelist Ken Harris, managing partner, Cadent Consulting Group, talked about some of the companies he’s seen doing well despite the challenging environment.

“The better companies that are weathering the storm are the ones that are investing in innovation, are working with revenue growth management and are working on different pricing and sizing to be able to withstand some of these things and then therefore executing well,” he said.