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Inflation? Shoppers didn’t seem to care during July 4th, graduations
Additionally, a majority of shoppers said they don’t believe they need to cut their spending through the rest of the year, according to a new survey
3 Min Read
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TOP TAKEAWAYS
59% of shoppers said they don’t believe they need to cut their spending through the rest of the year
87% of those with graduation celebrations said they would not change their plans in response to inflation
79% of shoppers said they planned to spend as much, if not more, on their July 4th festivities as they did in 2022, and there was a 13% increase in net new items bought for July 4th weekend, as compared to last year
New findings from June 2023 (Q2 and H1) research shows that consumers were not phased by inflation during the celebration season — during July 4th as well as surrounding graduations, according to the latest joint report from Grocery Doppio, Incisiv, and Wynshop.
The research, which surveyed grocery industry executives and shoppers, and also incorporated shopping data, found a high shopper confidence, a slight drop in digital’s share of grocery sales, and also a revival in delivery orders.
More specifically, the grocery performance scorecard showed that more than half of shoppers (59%) did not believe they needed to cut their spending through the rest of the year and more than three-quarters of those with graduation celebrations would not change their plans in response to inflation (87%).
Again, more than three-quarters of shoppers (79%) planned to spend as much, if not more on their 4th of July festivities as they did in 2022, and there was a 13% increase in net new items bought for the same weekend compared to last year.
“Consumers appear to have adjusted to inflation,” said Gaurav Pant, chief insights officer of both Incisiv and Grocery Doppio. “Even as the cost of groceries continues to rise, consumers are spending as much on summer celebrations and holidays as they did in the past, and eating out more than you might expect.”
As for fulfillment, in Q2 2023, 49% of all digital orders were home deliveries which reverses a trend towards store pickup amidst record-high temperatures according to the report. In fact, home delivery has continued to dominate shopper preference at small grocers (67%) compared to larger grocers (49%).
Further, after months of the slowed growth of digital sales, this quarter witnessed a 1.4% drop in digital grocery sales, down from Q1 despite a nearly 5% increase in total grocery sales in the same time period.
Third-party providers also lost market share falling from $5.4 billion to $5.1 billion (5.6% reduction between Q1 and Q2 2023). Third-party sales accounted for 17.4% of total digital sales in Q2. This means that as grocers’ internal capabilities continue to improve, shoppers have been opting for in-house versus third-party sales at increased rates.
The report infers that less reliance on third-party sales equals less fees for shoppers and greater profits for grocers.
Other key findings include:
63% of shoppers are confident about the economy
18% plan to increase their overall spending on groceries and food over the rest of the year
Restaurants are taking a bite out of the food budget: there was a 21% increase in food bought outside the home by shoppers in H1 2023
67% of shoppers considered restaurant takeout/outside meals more in H1 2023 due to increase in grocery prices
71% of shoppers haven’t tried prepared food/meals at their grocer
The report is built around data analysis of 1.9 million shopper orders and survey results are from more than 32,500 shoppers and 3,148 U.S. grocery executives.
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