Against a backdrop of declining inflation, grocery store sales dipped in April amid narrow growth for overall U.S. retail sales.
April retail and foodservice sales came in at $686.05 billion (seasonally adjusted), up 0.4% from $683.18 billion in revised sales numbers for March and 1.6% in updated figures for April 2022, the U.S. Census Bureau reported in advance estimates on Tuesday.
Retail trade sales for April—excluding motor vehicles, parts stores, gas stations and repair shops—inched up 0.4% month to month to $597.99 billion and gained 0.5% year over year.
The April retail sales result ended two months of sequential decreases. U.S retail sales fell by 0.7% month over month (+2.4% over 12 months) in March and were down by 0.2% on a monthly basis (+5.9% over 12 months) in February. Revised retail trade sales data from the Census Bureau showed a 0.8% monthly decline (+1.1% year over year) for March and flat monthly results (+4.5% year over year) for February.
Grocery store sales were down 0.4% to $73.45 billion (seasonally adjusted) in April from $73.74 billion in updated figures for March, when sales dipped 0.2% sequentially, the Census Bureau said. For the 12-month comparison, April grocery retail sales grew 3.7%, versus an annual gain of 4.9% in March. In February, grocery store sales had edged up 1% month over month and advanced 6.5% year over year.
Sales at all food and beverage stores for April fell 0.2% monthly to $81.78 billion but rose 3.7% over 12 months. That compared with a 0.3% decline sequentially and growth of 4.4% annually to $81.91 billion in March’s revised data, the Census Bureau reported.
“April’s retail sales (excluding fuel and auto) came in line with expectations, offering a rebound after two months of decline,” Claire Tassin, retail and e-commerce analyst at data intelligence firm Morning Consult, said in an email. “While this is good news, inflation’s persistent impact on consumers is apparent in the year-on-year comparisons, with significant drops in discretionary categories like home furnishings (down 6.4%) and electronics (down 7.3%).”
Falling inflation is reflected in retail sales numbers. The Consumer Price Index (CPI) ticked up 4.9% year over year and 0.4% month to month in April, continuing a steady decline, the U.S. Bureau of Labor Statistics (BLS) reported last week. Food-at-home price inflation dipped 0.2% month over month for April after a 0.3% decline in March—the first decrease since September 2020, BLS reported. Year over year, the food-at-home CPI was up 7.1% in April, compared with a 8.4% uptick in March
The National Retail Federation (NRF) on Tuesday reported a 0.6% monthly gain (seasonally adjusted) and a 2% year-over-year uptick (unadjusted) for April retail sales, compared with a 0.7% monthly decrease and a 3.4% yearly increase in March.
NRF’s estimate focuses on core retail, excluding automobile dealers, gas stations and restaurants. The retail trade group noted that its sales figures were up 3.7% unadjusted annually on a three-month moving average through April.
“Consumers remained engaged in April,” NRF Chief Economist Jack Kleinhenz said in a statement. “Shoppers are being selective and price-sensitive, but we continue to expect that spending will see modest gains through the course of the year. Year-over-year growth slowed, which was partly because of upward revisions to last year’s data but also an early indication that credit conditions are tightening and excess savings are shrinking.”
April sales declined on a monthly basis in five of nine retail categories tracked by NRF: grocery and beverage stores, apparel and accessories stores, electronics and appliance stores, furniture and home furnishings stores, and sporting goods stores. Five retail segments posted 12-month decreases, including apparel and accessories stores, building materials and garden supply stores, electronics and appliance stores, furniture and home furnishings stores, and sporting goods stores.
Grocery and beverage stores sales were down 0.2% month to month seasonally adjusted in April but rose 2.9% unadjusted over 12 months, according to NRF. Among other retail categories in the food, drug and mass channel, April sales inched up 0.9% month over month seasonally adjusted and climbed 5.8% unadjusted year over year for health and personal care stores (including drugstores), while general merchandise stores saw sales decrease 0.9% month over month seasonally adjusted but grow 4.1% unadjusted year over year.
“Retail sales rebounded in April, reflecting consumer resilience in the face of elevated economic uncertainty,” NRF President and CEO Matthew Shay commented on April’s retail sales performance. “Moderating price levels, continued labor market strength and wage gains have increased consumers’ ability to spend. However, they remain cautious and concerned about the current economic environment. Retailers continue to provide competitive pricing and convenience to help cost-sensitive consumers stretch their budgets.”
Circana (formerly IRI-NPD Group) reported Tuesday that consumer packaged goods (CPG) continue to exhibit lower demand with elevated prices. In April, the market research firm tracked a 6% year-over-year gain in food and beverage sales revenue, while unit sales fell 2%. Non-edible CPG sales revenue rose 3%, and unit sales decreased 5%. In the meantime, discretionary general merchandise retail dollar sales for April dropped 7%, with unit sales down 8%. Circana said the decreases were consistent with declines in March.
“The enduring high prices of grocery items are forcing consumers to prioritize their spending decisions and make trade-offs,” according to Marshal Cohen, chief retail industry adviser for Circana.
In the CPG and foodservice arena, convenience has been resonating with consumers, Circana said, citing softening sales of breakfast foods and other items at grocery stores and traffic momentum for the morning meal is at restaurants.
“While consumers are still feeling financially crunched, they are also resuming their busy social schedules, and it is being reflected in the details of how they are spending,” Cohen noted. “Manufacturers and retailers need to understand what is taking priority for the consumer, think about how that may evolve, and be prepared to respond to the opportunities that will come with the next phase of changes.”