Grocery spending skilled a lower in momentum because of a deceleration in inflation.

May 18, 2023

Grocery spending skilled a lower in momentum because of a deceleration in inflation.


Spending at grocery shops rose 3.7% in April in contrast with the identical interval final yr — the slowest year-over-year tempo since July 2021 — in response to estimated knowledge launched Tuesday by the U.S. Census Bureau.

  • Grocery gross sales slipped 0.4 p.c in April in contrast with the prior month, whereas total retail and meals gross sales moved ahead at a month-to-month charge of 1.6%.
  • Grocery gross sales have been trending downward in current months as inflation has come off its peak however remained elevated by historic requirements.

Dive Perception:

The federal statistics launched this week counsel that the string of sturdy will increase in grocery spending that kicked off in mid-2021 may very well be approaching an finish.

The three.7% year-over-year improve in spending at meals and beverage shops recorded final month continues a gentle decline for the metric, which stood at greater than 8% for a lot of 2022 earlier than starting to lose steam in December.

In the meantime, the month-to-month drop in grocery gross sales in April represents the primary time that determine has been in unfavorable territory since final April, when it declined 0.1%. Grocery gross sales had been flat on a month-to-month foundation in March forward of the drop final month.

Grocery gross sales slowed month-to-month in April whilst total retail gross sales regained momentum throughout the month regardless of drops in discretionary areas like residence furnishings, electronics and sporting items.

The gross sales slowdown grocers have been seeing largely tracks the decline in grocery inflation the federal government has recorded since final summer time, when grocery costs had been leaping forward at an annual tempo that hadn’t been seen in many years. Total inflation has additionally steadily come down on a year-over-year foundation since mid-2022.

In a mirrored image of the impression inflation continues to have on buyers even because it slows, 85% of individuals surveyed by Morning Seek the advice of in April mentioned they’re nervous about how rising costs are affecting their family budgets, Claire Tassin, retail & e-commerce analyst on the resolution intelligence firm, mentioned in feedback despatched by e-mail. The determine has elevated by 6 share factors since January, in response to Tassin.

In one other signal of how inflation is impacting individuals’s spending habits, a rising variety of customers have turned to purchase now, pay later providers to assist handle their outlays on groceries.

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