Consumer Spending Trends Shift in Retail and Food & Beverage Sectors, Notes Expert Analysis

by Ella

In August 2023, a report by Circana reveals that U.S. retail sales, encompassing both discretionary general merchandise and consumer packaged goods (CPG), remained stagnant in comparison to the same period last year, with unit sales experiencing a two percent decline. The findings underscore evolving consumer spending habits, particularly within discretionary general merchandise, which has seen a five percent drop in dollar sales and a seven percent reduction in unit sales compared to the prior August.

Circana, a prominent authority on the intricacies of consumer behavior, formerly known as IRI and The NPD Group, has conducted an in-depth examination of retail sales, including the food and beverage sector, providing insights into the strategies needed by manufacturers and retailers.


Retail and Food & Beverage Spending Snapshot


According to Circana’s analysis, the growth in consumer spending on CPG has moderated slightly from the previous month. Food and beverage sales exhibited a three percent increase, while non-edible revenue saw a two percent rise compared to the previous year. Demand levels in CPG remained stable from July, with unit sales showing a one percent decrease in the edible segment and a three percent decrease in the non-edible category.


Marshal Cohen, Chief Retail Industry Adviser for Circana, commented on the evolving landscape, stating, “The purse strings are tightening and shifting when it comes to retail spending. 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.”


Within the food and beverage sector, households are actively seeking cost-effective options and deals to mitigate rising costs. Despite these efforts to economize, some areas, such as specialty stores, including tea shops, have retained pockets of indulgence. Additionally, shifts in discretionary general merchandise purchasing behavior have become evident, particularly during the critical back-to-school shopping season, highlighting changing consumer spending priorities.

The evolving landscape of consumer spending becomes more apparent when assessing year-over-year spending trends across general merchandise, food and beverage, and non-edible CPG. Over the past two years, these trends have demonstrated varying spending patterns. A year ago, spending on food and beverages surpassed non-edible CPG and the declining general merchandise segment. Presently, while the growth rate has slowed, food and non-edible CPG are still outperforming general merchandise, which has established a new baseline.

Adapting to Consumer Priorities

Marshal Cohen emphasized the need for manufacturers and retailers to align with evolving consumer priorities to maximize purchase opportunities during upcoming shopping holidays and beyond. He noted, “Consumers are spending on their needs, and on their schedule.”

Circana, leveraging technology, advanced analytics, cross-industry data, and deep expertise, collaborates with nearly 7,000 of the world’s leading brands and retailers to facilitate informed decision-making and unlock business growth opportunities.



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