Unit sales of food and beverages fall as consumer behavior shifts to larger quantities: IRI
US- A new survey from IRI a Chicago-based market research firm, says there have been shifts in consumer behavior that point toward purchasing products in larger quantities, meaning more volume per unit, in part as a response to higher prices.
Of 174 food and beverage categories tracked by IRI, unit sales were flat or down in the 52 weeks ended Aug. 7 for 137 and up in 37.
The data covered sales in supermarkets, drugstores, mass markets, convenience, military, and select club and dollar stores within the 174 categories, the median 52-week change was a 2.2% decrease in sales.
The survey highlights that a decrease in unit sales of food and beverages over the past year reflects a wide array of forces, some of them countervailing.
Joan Driggs, vice president of thought leadership for IRI said price inflation appears to be a major driver of the trend whereas many changes in consumer behavior are reflected in the data, including in some cases individuals and families eating less because food has become less affordable.
She explained that “shrinkflation” has led many consumer-packaged goods companies to offer products in smaller package configurations than in the past to limit price increases, a shift that could result in more unit sales over time.
A factor that likely has contributed to the decrease in unit sales and perhaps to an increase in food insecurity or hunger is the expiration of the child tax credit at the end of 2021, Ms. Driggs said.
In addition, shopper skittishness has been captured in consumer sentiment figures from the University of Michigan, which fell to an all-time low of 50 in June, down from 58.4 in May. The data set has been collected by the University of Michigan since the late 1970s.
The fact shoppers are finding fewer price specials also may be weighing on sales, Driggs explained, saying people no longer stocking pantries the way they were in 2020 and partly in 2021.
In 2021, there was supply chain fear, with inflation, people are sticking closer to their budget than in the previous years.
Furthermore, some consumers are shopping in more channels than in the past, since promotions haven’t bounced back.
Consumers are shopping around for deals, and they are not finding the level of deals they found pre-pandemic.
This is the reason the club channel has gained the greatest share of the Omni-retail landscape (excluding online shopping), showing that with all the stimulus money, people were investing in club memberships and are repairing their value of it.
At the same time, she revealed that the shift toward more at-home consumption than was the case before the pandemic appears to be continuing and is very promising, considering that about 85% of meals are consumed at home versus 15% at food service, which is a major change.
Nevertheless, as the remaining 20% to 30% of the workforce continues to work at home, Ms. Driggs said, it is a significant barometer that the at-home share will remain very high.
Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro-industry. SUBSCRIBE HERE.
