According to a report, summer inflation is causing consumers heat.

Dive brief:

• Fifty-four percent of consumers surveyed by data firm Numerator say they are moderately or significantly concerned about future price increases during this summer's inflationary period.
• Fivety-five percent of respondents said that they had changed their shopping habits in the last month because of price increases. Ninety percent say they will continue to make changes if they see more rises.
• Inflation rose 5.4% in July compared to June, according to the 600-person survey. This is the highest inflation rate since the 2008 financial crisis.

Dive Insight

The survey revealed that 66% of consumers expect prices to rise in the next six-months for groceries and household products.

Moderate inflation is good news for grocers' bottom line, but rates above 5% could lead to changes in consumer behavior that will significantly impact store spending, according to Numerator survey data.

A large percentage of shoppers will switch brands and retailers in response to rising prices. Respondents said that they would switch to a lower-priced store if there is significant inflation, and 35% would prefer to do so if there was only slight inflation. Sixty-two percent said they would switch to lower-priced brands if there is significant inflation, while 49% said that they would only do this if there was slight inflation.

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Experts predict that the rate will slow in the coming months. Kiplinger recently forecasted inflation will start to fall by the end of the year, with prices 5.5% higher at the end of 2021 than a year ago. Jerome Powell, the Federal Reserve chair, told Congress this month he expects inflation to start decreasing in roughly six months, The New York Times reported. Meanwhile, Red Apple Group CEO John Catsimatidis, who owns the Gristedes Supermarkets grocery chain in Manhattan, told Fox Business he predicts the annualized inflation rate to be 6% in October.

According to Numerator's survey, how consumers react to inflation increases depends on their spending power. Low purchasing power consumers are more likely than others to trade down brands and switch retailers. Medium purchasing power shoppers are less likely to make changes in their behavior, but they also tend to be the most likely switch retailers. Unsurprisingly, those with higher purchasing power are less likely to trade down product brand names.

Consumers across all spending categories say they will reduce discretionary funding to combat inflation. 74% of respondents said that they would spend less at restaurants and bars if inflation continues. Higher purchasing power consumers say they will cut back on apparel, while lower purchasing power consumers report that they will spend less on electronics, travel and other necessities.

Discount retailers such as Walmart and Aldi, as well as those who target high-income customers, will benefit from high inflation. However, Numerator's data shows that conventional retailers can retain loyal customers and potentially even win new customers. 45% of respondents indicated they plan to search for additional discounts or promotions with slight inflation.

Catherine Douglas Moran contributed to the story.