By: Amanda Koprowski, Associate Editor | September 15, 2023
Edible and nonedible CPG sales continue to outperform general merchandise spending, according to Circana.
CHICAGO — In August 2023, U.S. retail sales revenue, including both discretionary general merchandise and consumer packaged goods (CPG), remained unchanged compared to the same month last year while unit sales declined 2 percent.
[Read more: Foodservice Customers Increasingly Dine Out on Deals]
According to Circana, discretionary spending declines continued with a 5 percent decline in dollar sales and 7 percent drop in unit sales compared to August 2022.
CPG spending gains slowed slightly from the previous, with 3 percent growth in food and beverage, a 2 percent increase in nonedible revenue compared to last year. Demand levels held steady from July across CPG, with unit sales falling 1 percent and 3 percent respectively in edible and nonedible segments.
“The purse strings are tightening and shifting when it comes to retail spending,” said Marshal Cohen, chief retail industry advisor for Circana. “Inflation is easing, but consumers continue to feel the pinch of still-elevated food and beverage prices. Impacts of higher prices, lower demand, and weather disruption may be starting to extend beyond discretionary spending.”
For food and beverage spending, households continued to look for deals and switch to lower-cost options to save money, though some specialty stores continued to see benefits in shifting spending habits.
When recent trends in discretionary general merchandise, food and beverage, and nonedible CPG are viewed together, a picture of changing consumer priorities emerges. Over the past two years, Circana found the once minimal gap in spending changes has varied. A year ago, spending on food and beverages rose above both nonedible CPG and the general merchandise segment. Now, slowing growth activity has closed the gap between food and nonedible CPG, while their gains continue to outperform general merchandise, which has established a new baseline.
A previous Circana report further observed that delayed purchasing during the key back-to-school season aligns with overall shifts in how and when consumers prioritize spending.
“Manufacturers and retailers need to adjust to and align with the consumer’s priorities in order to maximize purchase opportunities through this year’s remaining shopping holidays and into the year ahead,” said Cohen, “Consumers are spending on their needs and on their schedule.”
[Read more: SNAP Households Cut Back on Food & Discretionary Spending]
Chicago-based Circana serves as an advisor on the complexity of consumer behavior. Through advanced analytics, cross-industry data and subject matter expertise, Circana provides insights and research that helps clients unlock business growth.
Source: Convenience Store News