July was another month of single-digit food and beverage inflation for U.S. retail. Yet, the Circana (formerly IRI) sales numbers show little to no improvement in grocery unit and volume sales. The sustained levels of inflation, record credit card debt and low savings rates are resulting in continued subdued purchases despite an uptick in promotions.
Circana’s household engagement insights tell an interesting back story. Hyper-focused on sales specials, consumers are shopping more often and across more stores. At the same time, inflation continues to provide a small boost to the average shopping ring for most departments. However, the increase in the average basket is below the rate of inflation and has been for a while. This is caused by consumers balancing their budgets by buying on deal, switching to private brands, finding smaller packages, and above all else, buying less altogether. The average number of items bought on each trip has been on a downward trajectory for more than two years.