Affordability is the “defining challenge” when it comes to economic mobility, according to a new report by the McKinsey Institute for Economic Mobility and the W.K. Kellogg Foundation.
The survey of 30,000 Americans across income levels found that 90% of those polled cited groceries and food prices as a top cost concern, even over other key expenses, such as housing and healthcare.
“We face a common challenge, and that is the rising cost of living,” said John-Paul Julien, a partner at McKinsey & Co. and co-founder of the McKinsey Institute for Economic Mobility. “Although people are experiencing the economy differently, there is this shared feeling that rising costs are making it difficult to get ahead.”
Consumer pricespulled back in June, but food costs edged higher once again, bringing the year-over-year gain to 3%, according to the latestconsumer price index.
Food at home, a measure of price changes at the grocery store, also increased from a year earlier.
The Bureau of Labor Statistics is set to release the next CPI reading, with July data, on Aug. 12.
Some Americans take on debt to buy food
A separate Urban Institute analysis released in mid-July found that many families used credit and savings to pay for groceries in 2025, and many showed signs of strain.
About 35% of adults paid for groceries with a credit card and paid their bills in full at the end of the month. Another 20% used a credit card and paid less than the full balance but still made the minimum monthly payment, according to the Washington-based think tank, while 8.7% did not always make the minimum payment.
The report is based on data from the Urban Institute’s December 2025 Well-Being and Basic Needs Survey, which polled more than 10,000 adults.
Cardholders who pay their bill in full every month can maximize rewards while avoiding interest charges. Borrowers with revolving balances pay annual interest rates of more than 20%, on average, on their debt.
“There’s no doubt that there’s pressure in terms of affordability in this country,” said Marshall Lux, a visitingfellowwith the Psaros Center for Financial Markets and Policy at GeorgetownUniversity’s McDonough School of Business. However, “like everything else, it’s complicated.”
With grocery purchases mixed in with other credit card spending, it’s difficult to pinpoint what’s causing some consumers to fall behind on their payments, he said: “It’s hard to draw a straight line.”
A more “perennial” problem is the increased use of buy now, pay later for everyday expenses, Lux said.
Nearly 1 in 10 adults used buy now, pay later to pay for groceries; and among those who relied on installment payments, about 35% missed a BNPL payment, according to the Urban Institute. Generally, missed BNPL payments incur late fees, deferred interest or other penalties, depending on the lender.
A separate March survey from LendingTree of more than 2,000 adults found that 29% of buy now, pay later users said they’ve used these short-term loans to buy groceries — up from 14% two years ago.
Customers check out at a supermarket on August 12, 2025 in New York City.
Liao Pan | China News Service | Getty Images
With food-at-home prices up about 25% over the past five years, “families experience this as a cumulative increase,” said Kassandra Martinchek, a public policy expert at the Urban Institute and co-author of the study.
As a result, households are under “sustained pressure,” she said — leading to larger debt burdens that are harder to pay down. “We know that access to credit is a crucial lifeline for families, but relying on credit can lead to future financial instability,” Martinchek said.
Although low- and moderate-income households experienced more repayment challenges compared with high-income households, even some adults with higher incomes struggled with repayments, the report also found. That “suggests this challenge is broad-based across a lot of consumers and families,” Martinchek said.
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