Retail Food & Beverage Unit Sales Dip as Inflation Hits Home

Prices for at-home foods rose 1.6 percent from the end of July to the end of August, according to IRI.
10/5/2022
Shopping Basket with food

CHICAGO — As food and beverage prices continue to rise, many consumers are seeking affordable options.

In August, data shows that prices of consumer goods remain elevated across categories. Prices for food at-home rose 1.6 percent from the end of July to the end of August, and 13.4 percent year over year through the week ending Aug. 28, according to Information Resources Inc. (IRI).

The findings are part of the company's latest report, "August 2022 Price Check: Tracking Retail Food and Beverage Inflation." The insights leverage the latest point-of-sale data for August and include data covering all U.S. food channels, including e-commerce. 

IRI recently merged with The NPD Group to create a global technology, analytics and data provider.

"We are beginning to see consumers scale back purchases both in terms of units and volume in recent weeks, as retail food and beverage prices have continued to rise," said Krishnakumar Davey, president of Thought Leadership for CPG and retail, IRI and NPD. "While retail food and beverage sales have been fairly resilient, we're seeing signs of consumer stress, particularly among low-income households. Consumers are buying less in discretionary food and beverage categories, and are shopping more frequently in search of better prices.

"At the same time, consumers are willing to pay a premium for some categories such as pasta, pasta sauce, butter and frozen entrees which are considered affordable indulgences for more cash-strapped shoppers," Davey added. 

Additional key insights from the "August 2022 Price Check: Tracking Retail Food and Beverage Inflation" report includes:

  • Persistent inflation. Food and beverage inflation continues to persist on a year-over-year basis, despite recent price moderation in other areas of the economy, such as gasoline. The carbonated beverage and fresh common fruit categories had the largest monthly price jump in August, each rising 5.3 percent compared to the end of July. 
  • Limited relief for consumers. While prices of certain food categories have begun to moderate in recent weeks, most remain elevated year over year. For example, prices in the coffee category rose less than 0.3 percent at the end of July 2022 compared to the end of June 2022, but remain more than 18.6 percent higher in July 2022 vs. July 2021.
  • Low-income households are driving the change. Low-income shoppers, who drove most of food and beverage growth in 2021, are pulling back on food purchases as inflation increases. Volume and units of several discretionary categories — including frozen seafood, candy, and snack bars/granola bars/clusters have slowed down significantly more in low-income stores compared to the overall market.
  • Consumers are responding by cutting back and indulging affordably. In response to food inflation, shoppers' overall sales volume and units are declining. Overall, retail food and beverage unit sales declined 4.5 percent compared to a year ago, and volume sales declined 4 percent. The most significant drop-offs in volume are in categories where prices have risen dramatically, including frozen dinners/entrées, cookies and coffee. However, certain snack, candy and drink categories are more resilient, with more moderate sales volume declines despite significantly higher prices. 
  • Consumers are bargain hunting. Trips to food and beverage stores are up 3.5 percent vs. a year ago for the latest 12 weeks ending Aug. 21. Quick trips are up 6.7 percent during the same period compared to a year ago, while pantry stocking trips are down 0.6 percent, suggesting that consumers are looking for deals and cherry picking stores where they can get the best value.

For the full report on IRI's "August 2022 Price Check: Tracking Retail Food and Beverage Inflation" click here.

X
This ad will auto-close in 10 seconds