Shoppers' Grocery Carts Shrink

Americans are buying less at the grocery store as a result of inflationary pressures, reports the Financial Times. Compared to before the pandemic, shoppers have put fewer items in their grocery carts, substituting in-store purchases for online ordering, buying in bulk, and consuming less.

Despite moderating prices, many CPG brands are leveraging markdowns and promotions to get waning sales volumes up. The declines have also pressured retailers including Target, Kroger, and Walmart to offer discounts.

“Increased prices mean smaller basket sizes, and more consumers seeking to eliminate products they deem non-essential,” research firm NielsenIQ said in a recent analysis of sales of perishable goods. Analysts also said that, although customers are visiting stores more often, they are purchasing fewer items per trip, according to the report.

Wilson Sinclair, an economist at the USDA, noted that Americans on average spent 3.1 percent less on food at home in 2023 than in 2022. Moreover, domestic checkout terminals scanned 3 billion fewer items in the past 12 months than the year before, according to data from NielsenIQ. When consumers are asked why they purchase fewer grocery items, more than 75 percent cite price as the top concern, according to a McKinsey survey published earlier this year.

“You can’t keep raising prices . . . and not expect an impact,” said Nick Fereday, a food analyst at Rabobank. Full Story