Edible consumer packaged goods drove much of the sales growth in May.
CHICAGO — In May 2023, U.S. retail sales revenue, including both discretionary general merchandise and consumer packaged goods (CPG), increased 2 percent compared to the same month last year as unit sales declined three percent.
According to new findings from Circana, this growth came primarily from food and beverage CPG spending, with a 5 percent increase in sales revenue over last year, and 2 percent unit-sales decline. Nonedible CPG sales revenue grew 2 percent, while unit sales fell 4 percent. The firm also found that decreased spending on discretionary general merchandise continued through May, with a 5 percent decline in sales revenue and 8 percent decline in units.
"Consumers are engaged and spending, just not at full throttle," said Marshal Cohen, chief retail industry advisor for Circana. "Directional spending shifts, coupled with unemployment elevation, and recent air quality concerns in the U.S. could jolt a significant shift in consumer behavior. But, for the time being, consumers continue seek little luxuries and are willing to pay a premium for most of their purchases."
Year-to-date through May, sales of many traditionally high-volume categories declined from a year ago; however, consumers did boost their spending in several categories, with prestige beauty the only industry to exceed the sales growth noted in the food and beverage silo. Sales revenue increased by 16 percent, while the mass market beauty sales grew by 9 percent.
Rising prices and declining consumer sentiment also drove down discretionary general merchandise spending, but the anticipated shifts in where people shop during a period of economic uncertainty have not yet materialized. E-commerce gained the largest share of sales revenue so far this year, rising more than 2 share points, while value-oriented options, like mass merchants, warehouse clubs and off-price retailers, have yet to gain the expected levels of additional consumer attention.
However, Circana found the ways consumers are adjusting CPG purchases could indicate that changes are brewing. For example, the average number of items purchased in a shopping trip is smaller than it was last year, an adjustment that could be a precursor to other shake-ups in the rest of the retail industry.
Chicago-based Circana, previously The NPD Group and IRI, serves as an advisor on the complexity of consumer behavior. Through advanced analytics, cross-industry data and subject matter expertise, Circana provides insights and research that helps clients unlock business growth.