Easing Inflation Keeps Grocery Spending Steady

Source: U.S. Census Bureau.

Consumers’ balance of wariness and resilience continues, supported by a fresh round of sales data. In fact, the latest numbers from the U.S. Census Bureau reveal a slight but still higher-than-expected 0.1% bump in sales for a 2.1% year-over-year (YoY) lift. 

According to the Census Bureau, advance estimates of total retail and foodservice sales were $710.8 billion. Grocery store sales hit close to $74.46 billion last month, landing between the $74.13 billion in June and $74.89 billion in July. Zooming out, grocery sales are up on a YoY basis.

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The macro sales outlook and the grocery picture reflect consumers’ willingness to spend, but adjust their behavior when needed, industry observers noted. “After the better-than-expected July increase in retail sales, the U.S. Census Department of Commerce reported continued momentum with a 0.1% month-over-month increase for August. This slight rise defies many projections of a decline. A year-over-year uptick of 2.1% also materialized in August as consumers seemed to embrace falling inflation,” said Chip West, director of category strategy at RR Donnelley (RRD). “Grocery sales have seen a slight increase of 1.5% compared to August 2023. Across grocers, we’re seeing expansion among store brand offerings as consumers increasingly seek out value and great prices. Retailers that want to maintain a strong customer base need to continuously provide deals and value.”