Circana: Consumers Continue to Shift Habits Amid Inflation

At-home food and food-away-from-home prices continue to remain high, leading to changing behavior from consumers, according to Circana’s August 2023 Food & Beverage Landscape report.

CPG food inflation rose 4.9% between July 2022 and July 2023, and was up an average of 20% in July from 2019. Food-away-from-home prices are up 7.5% from 2022, leading to more consumers continuing to trade down when at the grocery store, including buying more private label products. Nearly all consumers surveyed (94%) reported concern with the cost of food inflation, with nearly a third (31%) switching to lower cost products, often from private brands.

Circana notes in the report that retail unit volume is declining year-over-year, but remains higher than pre-pandemic levels. For the year-to-date ending July 16. 2023, grocery trips per buyer are up year-over-year, but total basket spend is up only +0.5% vs. July 2022, with average basket units down -4.3, showing that consumers are being judicious at the grocery store. Consumers are also increasing the number of channels that they shop at, signaling a hunt for value.

“Food and beverage inflation is still high and volumes are declining, but consumers are not eating less,” wrote Circana. “The volume shift is also not a simple one-for-one exchange between retail and foodservice. While retail unit volume is declining, it remains higher than pre-pandemic. And foodservice volume is increasing due to pockets of robust growth, while other areas lag behind.” 

Since the pandemic began, 86% of meals are being sourced from home, according to data from the end of 2022, compared to 84% home and 16% foodservice pre-pandemic. Circana finds that low prep dinners and frozen meal solutions are seeing gains, with frozen meat and poultry, frozen pizza and frozen sandwiches all increasing in sales from March 2022 to March 2023.

The full Circana report can be found here.