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Where Are Consumers' Mindsets and Wallets This Summer?

Latest sales data from NRF and Brick Meets Click/Mercatus reveals both pullbacks and rebounds
Lynn Petrak, Progressive Grocer
Brick Meets Click chart
Source: Brick Meets Click/Mercatus

Some of the latest sales data underscores the idea that consumers are wavering between cost-driven caution and guarded optimism, continuing behaviors that have seemed to wobble a bit every month.

In its monthly report, the National Retail Federation shared that overall retail sales jumped “significantly” in May, up 1.35% from the previous month and just over 3% higher on a year-over-year (YOY) basis. According to NRF, total sales rose 2.13% for the first five months of the year, while core sales (excluding restaurants, automobiles and gasoline) edged 2.48% higher. The monthly gains were the highest since April 2023, when total sales were up 1.13% and core sales moved up 1.27%, NRF revealed.

[RELATED: Why Context Matters in Commerce]

The bright spots extended to the grocery sector, which has been the focus of political debate and proverbial water-cooler discussions in recent history. NRF’s research shows that sales at grocery and beverage stores increased 1.97% on a seasonally adjusted basis from April to May and climbed 2.53% YOY, unadjusted. General merchandise sales were up 1.31% monthly and 4.89% yearly.

“Consumers have clearly retained their ability to spend and are driving solid economic growth,” declared NRF President and CEO Matthew Shay. “Spending is being supported by the job market and real wage gains. Inflation remains stubborn but is almost entirely in services rather than retail goods. May’s year-over-year gains are in line with what we saw earlier this year, and the month-over-month increases are the largest in more than a year. We believe this underscores that April’s moderation was an outlier.”

Meanwhile, in the e-ecommerce arena, Brick Meets Click and Mercatus released the results of their monthly grocer shopper survey. That research showed that the U.S. online grocery market reached $6.8 billion in sales for May, down a slight 0.4% from May 2023. The decline was caused by lower order frequency across all receiving methods of pickup, delivery and ship-to-home.

Among other findings, the fresh Brick Meets Click/Mercatus data revealed that pickup sales decreased 3.9% in May on a YOY basis, even as the monthly average user (MAU) base in that segment grew by nearly 3%. Delivery came in flat last month, but experienced an uptick in its MAU base. The ship-to-home category had a 9% gain in sales, led by improvements in average order value and a broader MAU audience.

“During May, delivery benefited from deep discounts related to annual memberships offered first by Instacart (80% off) and later in the month by Walmart (50% off),” concluded David Bishop, partner at Brick Meets Click. “These promotions likely drove delivery’s strong jump in MAUs and show how players like Instacart and Walmart are attempting to keep active customers engaged by getting them to commit to 12 months instead of just one.”

The survey also affirmed the omnichannel nature of the current marketplace. Mass retailers grew penetration by 110 basis points in May to hit 39.7% of e-commerce sales, but supermarkets remained dominant with 41.1% of the market. 

“Customers appreciate the convenience of online grocery shopping, but they are increasingly looking for ways to save money as inflation has taken a toll on the household wallet,” observed Mark Fairhurst, chief growth officer at Mercatus, who recently spoke at Progressive Grocer’s GroceryTech event in Dallas. "While digital deals are a good start, it's crucial to focus on more targeted, personalized, contextual offers based on past purchases, shopper profiles, preferences, or search behavior to better engage and retain customers.”

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