Grocery Sales Up in September, Fueled by Both Prices and Demand
After hovering between $73 billion and $74 billion for the last several months, sales at grocery stores topped $75 billion in September, landing at $75.3 billion for the month on an adjusted basis. New data from the U.S. Census Bureau also revealed that grocery store sales hit $663.88 billion for the first nine months of the calendar year, a 1.8% year-over-year (YoY) lift.
On a 12-month basis, grocery store sales are 2.5% higher, above the 1.7% total retail and foodservice sales rate. Overall retail and foodservice sales did edge higher last month, moving up 0.4% from nearly $711.3 billion in August to $714.3 billion in September.
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“While there have been some signs of tightening in consumer spending, September’s numbers show consumers are willing to spend where they see value,” observed Jack Kleinhenz, chief economist at the National Retail Federation. “September sales come amid the recent trend of payroll gains and other positive economic signs. Clearly, consumers continue to carry the economy, and conditions for the retail sector remain favorable as we move into the holiday season.”
Additional new data affirms the Census Department’s information. Anne-Marie Roerink, principal at insights firm 210 Analytics, cited Circana MULO+ data showing that total food and beverage unit sales are trending well above year-ago levels, with some of that growth stemming from prices. “This reflects ongoing, and slightly higher, inflation of 2.1% for September,” Roerink pointed out.
Within the grocery business, some categories posted brisk sales in September, according to the report from 210 Analytics. The meat department had a strong month, with beef pound sales up 5.4%, chicken climbing 2.3%, turkey rising 9.6% and lamb up 10.8%.
“Produce sales soared with continued growth for fruits and vegetables. Powerhouses berries, tomatoes, potatoes and onions delivered big growth, but the #cucumbersalad social media hit delivered 16% YOY pound growth for cucumbers in September, following (a 12% gain) in August,” noted Roerink. Deli prepared foods continued a sales streak, led by prepared meat, pizza and meals, and seafood sales rebounded somewhat with a recovery in shrimp sales. Trips are also up in frozen foods, while, in bakery, bread, buns, rolls and croissants had a good month.
As for implications of the latest information, retail analysts weighed in on grocers’ efforts to meet the needs of shoppers still motivated by price. “Shoppers are still extremely budget-conscious, and grocery stores are focusing on offering more affordable store brands. Retailers must continue to prioritize deals and value to remain relevant to consumers, amid floundering brand loyalty,” said Chip West, a retail and consumer behavior expert at RRD.
Nikki Baird, VP of strategy and product at retail technology company Aptos, echoed those sentiments. “Retail right now is a mixed bag — some winners and some losers. And a lot of that comes down to the experience offered. Consumers today have higher expectations for what a retail experience — particularly in the store — needs to offer than it did five years ago,” she said.
