Buy Now Pay Later Groceries Surge: How 30% of Americans Are Raising Prices for All

Buy Now Pay Later Groceries Impact on Retail Prices

In the checkout lane of a typical U.S. supermarket, roughly one in three shoppers has already tapped an app such as Klarna or Affirm to finance staples—produce, dairy, eggs. This buy now pay later groceries trend is not a fringe habit; a recent LendingTree poll of 6,000 consumers shows ↑ 20% adoption since 2021, with 29% reporting BNPL use for groceries, up from ↓ 14% two years earlier.

Researchers at Washington University in St. Louis, led by supply‑chain professor Panos Kouvelis, built an economic model that captures both shopper willingness and retailer profit calculus. Their analysis, soon to appear in Management Science, finds retailers embed the merchant‑fee cost into shelf prices, effectively shifting the expense of financed purchases onto cash‑paying customers.

“Retailers, as a result of accepting these kinds of payments, they are going to increase prices, which basically means that all of us are going to pay for these practices,” Kouvelis told Reuters.

The fee pressure is acute for low‑margin categories like groceries, unlike high‑margin discretionary goods where the cost can be absorbed. As BNPL spreads, some stores may trim SKU assortments, limiting consumer choice.

Beyond pricing, the unregulated nature of many BNPL platforms raises credit‑risk concerns. Users often carry multiple small‑ticket loans—sometimes five to ten simultaneously—without reporting to traditional credit bureaus, creating a shadow “phantom debt” pool. According to LendingTree, 47% of BNPL borrowers missed a payment in the past year, though the average balance is modest at $135.

For policymakers and investors, the signal is clear: a financing model born for furniture is now reshaping essential‑goods markets, echoing financial strains first observed during the pandemic. Monitoring the ripple effects on inflation and consumer solvency will be essential, as highlighted by a recent Bloomberg report.

Analysis by Victor Hale (Equities & Market Dynamics Analyst).