Center store sales were up 11.1 percent and perimeter category sales were up 6.3 percent in Q4 2022, according to the Impact of Inflation on Consumer Behavior report from the recently merged IRI and NPD group, data analytics providers. During this period, inflation was up 13.2 percent compared to the year before.
The report also found that inflation varied dramatically across the grocery store. In the last quarter of 2022 compared to the same period the year before, alcohol was up 5.4 percent, bakery was up 18 percent, dairy was up 23.2 percent, and center store was up 15.3 percent.
Additionally, shoppers are currently seeking value and convenience, a factor as to why ecommerce, dollar stores, and club stores are growing faster than the food channel. For example, at the end of 2023, the report found that online sales grew 16 percent, while the food channel only grew by 7 percent.
“The CPG space has proven to be less volatile and more resilient during economic downturns than other sectors,” said Alastair Steel, executive of client engagement at IRI, in a statement. “However, shoppers are feeling the impact of high prices and are shying away from discretionary purchases. Multiple tactics are being used to reduce spend and manage budgets, with value channels performing well.”
In the hunt for value, private labels and promotions are seeing more success than premium purchases. The impact of inflation has facilitated private label growth in 75 percent of food and beverage categories. This has also caused premium products’ growth to slow, losing 0.6 share points for the 12 weeks ending November 27, 2022.
Related: Inflation Continues to Cool; Americans Believe Inflation is Worse Than Reality