How Did Grocery Spending Stack Up Last Month?
Similar to the grocery inflation rate that held steady in February, sales within the sector are mostly stable. The latest report from the U.S. Census Bureau shows that adjusted sales in grocery stores reached $74.08 billion last month, slightly shy of the $74.13 billion in January and close to the $73.94 billion from February 2023. The adjusted figure takes into account seasonal variation and holiday and trading-day differences.
For the first two months of 2024, grocery store spending topped $143.5 billion, according to the Census Bureau data. That’s 2.7% higher than the same two-month period last year.
Overall, retail trade sales including other sectors rose 0.6% from January to February and increased 0.8% on a year-over-year (YoY) basis. That data propelled The National Retail Federation’s chief economist, Jack Kleinhenz, to conclude that U.S. consumers remain resilient, a keyword in the short-term market. “Retail sales rebounded in a solid fashion in February, showing the consumer is still spending and pointing to underlying strength in the economy,” he said. “These results indicate that the economy is continuing to expand in the first quarter despite tight credit conditions and still-elevated inflation. Jobs gains, wage increases, and continued GDP growth are supporting household spending. Spending on services remains elevated while spending on goods has softened, but both sectors are still growing.”
Chip West, a retail and consumer behavior expert at Vericast, likewise weighed in on the latest numbers. “Following a greater-than-expected retreat of consumer spending after the holidays in January, the U.S. Census Department of Commerce reported a seasonal rebound in February. This was closely aligned with projections,” he said.
He also put the findings in context with the fresh Consumer Price Index (CPI) report showing that although grocery inflation is steady, fuel and shelter prices trended up last month.
“February’s Consumer Price Index came in hotter than forecasted, helping volatile gas prices to climb again. We know that when fuel prices rise, it impacts other spending choices consumers need to make,” he pointed out. “Restaurant prices have gone up significantly since inflation has been ticking up. Now we’re seeing grocery with opportunities to regain wallet share as consumers are presented with more cost-effective options than dining out. It will be interesting to see how grocery fares in the next few months with warmer weather and a desire to spend on experiences like travel and entertainment.”
