Uncertain economic factors influenced consumer purchasing behavior in 2023. Inflation continued to dominate headlines and the possibility of a recession was top-of-mind for many consumers. In Circana’s December 2023 Shopper Survey, 94% of surveyed shoppers were concerned about food cost inflation, while 88% of shoppers had the perception that the cost of groceries and everyday household items are now higher compared to last year.
Consumers’ perceptions are not wrong. Despite economic concerns, total food and beverage dollar sales increased +3.4% in 2023 in Total US Multi-Outlet (MULO*), buoyed by increased prices as volume decreased -2.5%.
As a result, consumers modified their shopping behavior in two key cost-saving ways: saving money on products and saving through retail choice.
Saving Money on Products
As consumers looked for ways to save on food and beverage in 2023, they took advantage of available coupons. Half of Circana-surveyed households said they “buy products that are not their preferred brand, because they have a coupon.” Consumers also engaged more with product promotions, as percent of dollar sales on promotion increased +2.9%. Private brands continued to be a desirable money saving option for consumers, as private brand dollar penetration increased +0.3% in 2023, marking the second consecutive year of private brand penetration growth. All of this occurred as retailers sought to capture shopper dollars through in-store displays. Categories such sports drinks, juice, and candy experienced increases in display activity in 2023, while soap and pre-mixed cocktails, bottled water, baking mixes, and fresh breads and rolls saw decreases in display activity in the grocery channel.
Saving Through Retailer Choice
Consumers have options when it comes to where they purchase food and beverage. In 2023, consumers spent more of their food and beverage dollars in Walmart and specialty stores than year ago, and less in the grocery channel. In total, consumers made fewer food and beverage trips to retailers in 2023. However, the dollar channel was the only measured channel in which consumers increased their trips +2.2%. Baskets with a wide variety of items and higher value ring at the register, known as pantry stocking trips, decreased in food but increased in Walmart and club as consumers made more of these trips in those channels.
Looking to the Future
Entering 2024, members should be looking for additional ways to help consumers save while at the same time enticing consumers to purchase additional items. Promotional offerings, competitive everyday pricing, relevant displays, basket building offerings, and private brand assortment that allows consumer to enjoy the products they want at a savings, are all ways to address consumer behavior of the past year.
The future is always uncertain, but knowledge gained from data and analytics prepares the member with an understanding of where they have been and informs where they will go.
Circana is the leading advisor on the complexity of consumer behavior. With unparalleled technology, their Liquid Data platform makes it easy to work with cross-industry data and advanced analytics. Seeing all the angles makes it easier to find new opportunities and spark growth.
Circana is proud to partner with AWG. In this new year, the AWG and Circana partnership will bring you a new world of enhanced analytical solutions. New data sets with visibility to market performance, pricing comparisons, assortment overview, competitive landscape, and much more will be available to you in the near future, along with actionable insights, and increased supplier collaboration to support your business growth.
*MULO (Multi-Outlet) includes Grocery, Drug, Mass, Walmart, Club, Dollar, Military, Amazon F3,
