In August 2023, U.S. retail sales revenue, including both discretionary general merchandise and consumer packaged goods (CPG), remained unchanged compared to the same month last year, and unit sales declined two percent – per a Circana report. Discretionary general merchandise spending declines continued with a five percent decline in dollar sales and a seven percent drop in unit sales compared to last August.
Circana – a leading advisor on the complexity of consumer behavior, and formerly IRI and The NPD Group – recently looked at overall retail sales, including food and beverage (which includes tea), and what manufacturers and retailers need to do.
A Look at Retail, Food & Beverage Spending
According to the firm, CPG spending gains slowed slightly from last month, with three percent growth in food and beverage, a two percent increase in non-edible revenue compared to last year. Demand levels held steady from July across CPG, with unit sales falling one percent and three percent respectively in edible and non-edible segments, according to Circana.
“The purse strings are tightening and shifting when it comes to retail spending,” said Marshal Cohen, chief retail industry adviser for Circana. “Inflation is easing, but consumers continue to feel the pinch of still-elevated food and beverage prices. Impacts of higher prices, lower demand and weather disruption may be starting to extend beyond discretionary spending.”
When it comes to food and beverage spending, households continue to look for deals and switch to lower-cost options to save money. But pockets of indulgence remain in areas like specialty stores (which includes tea shops). Delayed discretionary general merchandise purchasing during the key back-to-school season further illustrates the shifts in how and when consumers prioritize spending.
Shifts in consumer spending have been evident when monitoring year-over-year spending trends. When those same trends for discretionary general merchandise, food and beverage and non-edible CPG are viewed together, a picture of changing consumer priorities emerges. Over the past two years, the once minimal gap in spending changes across general merchandise, food and non-edible CPG has varied. A year ago, spending on food and beverages rose above non-edible CPG and a declining general merchandise segment. Now, slowing growth activity has closed the gap between food and non-edible CPG, but their gains are still outperforming general merchandise, which has established a new baseline.
What Manufacturers and Retailers Need to Do
“Manufacturers and retailers need to adjust to and align with the consumer’s priorities in order to maximize purchase opportunities through this year’s remaining shopping holidays and into the year ahead,” said Cohen, “Consumers are spending on their needs, and on their schedule.”
Through technology, advanced analytics, cross-industry data and deep expertise, Circana helps almost 7,000 of the world’s leading brands and retailers take action and unlock business growth.
To learn more about Circana, visit Circana.com.
Don’t Miss the Weekly World Tea News eNewsletter! Get your free subscription, if you’re not already subscribed, by clicking here.
Plan to Attend or Participate in World Tea Expo, March 18-20, 2024
To learn about other key developments, trends, issues, hot topics and products within the global tea community, plan to attend World Tea Expo, March 18-20, 2024 in Las Vegas, co-located with Bar & Restaurant Expo. Visit WorldTeaExpo.com.
To book your sponsorship or exhibit space at the World Tea Conference + Expo, or to enquire about advertising and sponsorship opportunities at World Tea News, contact:
Business Development Manager, Questex
Email: [email protected]