Shoppers in Holding Pattern Last Month
Although grocery inflation has cooled to the lowest rate since early 2020, the sales environment remains somewhat volatile as sellers and buyers appear concerned about the impact of tariffs and other issues. Fresh sales data from the federal government and other sources shows that shoppers haven’t quite loosened their grip on their physical and digital wallets.
According to the latest retail sales report from the U.S. Census Bureau, overall retail sales were essentially flat last month, ticking up a very slight 0.1% from March to April. That seemingly play-it-safe mentality during a period marked by tariff-related angst extended to the grocery sector, which saw a 0.1% sales dip in April. Advanced sales estimates came in at $75.89 billion for April versus $75.95 in March. On a year-over-year (YoY) basis, grocery sales are up 2.7%, per the government report.
[RELATED: Grocery Inflation Slows to Lowest Rate in Nearly 5 Years]
Analyst Chip West, a retail and consumer behavior expert at RRD, said that shoppers are getting used to changing their behaviors temporarily due to evolving market circumstances. "Consumers in April appeared to show caution, waiting to see how the picture involving trade and supply chains played out,” he observed.
That said, easing inflation and recent trade talks and agreements may change mindsets yet again. “Despite economic volatility and supply chain concerns, consumer purchasing power held firm — bolstered by easing inflation, low unemployment, and steady income growth,” West said. “I predict that consumer confidence will rise in the months ahead as consumers gain a better understanding of the potential impacts that may or may not materialize. When more unknown factors become known, there will be greater assuredness in consumer decision-making on what, when and how to purchase.”
He emphasized the ongoing engagement with wary shoppers. “For retailers, those that communicate promote desirable, available, and in-hand merchandise ahead of any known or unknown supply chain disruptions will win, especially in the short term. As summer approaches, retailers also have the opportunity to incentivize both essential and non-essential purchases with a solid promotional strategy leveraging the most influential media promoting value – an abating theme for today’s shoppers,” he observed.
In addition to Census Bureau data, other reports affirm that consumers have been influenced by broader market trends. According to April sales reports shared by 210 Analytics, fruit sales continued to remain strong, while vegetable sales came in flat. Thanks to a busy holiday month that included a Passover and a later-than-usual Easter, the bakery perimeter sales did well during a busy holiday month and meat department sales rose 9.8% YoY.
Heading into summer, 210 Analytics’ principal Anne-Marie Roerink agreed that shoppers last month were in a holding pattern. “Overall market patterns point to a continued worried consumer, with a record number of trips (transactions) across virtually all departments, but pressure on units per trip,” she pointed out.
Meanwhile, data from the digital marketplace indicates that online shoppers are contributing to larger piece of the sales pie. The latest grocery shopper survey from Brick Meets Click shows that e-grocery sales are up 15% YoY, with gains in delivery (+29% YoY), ship-to-home (+22.1% YoY). Pickup sales were mostly flat, according to the report.
Here, too, shoppers’ ongoing quest for value is shaping their choices. “Historically, memberships and subscriptions were considered more effective at building loyalty with regular customers, however, today we see that these programs are also attracting shoppers from rivals as households search for more savings,” said David Bishop, partner at Brick Meets Click.
Mark Fairhurst, chief growth marketing officer at the survey sponsor Mercatus, agreed. “Discounted memberships have put delivery in the spotlight, but lasting loyalty forms where speed, control, and value meet. Regional grocers who combine fast, free pickup with a compelling subscription program, data-driven rewards, and timely outreach to lapsed shoppers can turn trial orders into repeat business while protecting margins,” he said.
Experts from Mercatus will discuss how data intelligence is reshaping grocery during Progressive Grocer’s upcoming GroceryTech event, set for June 10-12 in Dallas, Texas.
