Grocery Sales Tick Up in November While Overall Retail Sales Slow

The grocery industry is a bit of an outlier as of late. Following new Labor Department data showing stickiness in high grocery prices as inflation in other areas eased, the U.S. Census Department reported that overall sales slid during November but edged higher in the food retail sector.

According to the Census Bureau’s advance estimates, adjusted retail and foodservice sales in November were down 0.6% compared to October. Sales in grocery, though, advanced over the prior month, moving from nearly $72.6 billion to $73.1 billion.

Inflation likely contributed to the uptick, along with the food-centric Thanksgiving holiday. The Consumer Price Index (CPI) for food at home rose 0.5% in November, driven by price hikes in fruits and vegetables, cereals and bakery products, dairy products and nonalcoholic beverages.

For the year to date, grocery sales are close to $771.2 billion, by the Census Department’s estimates. That’s up 8.4% for the first 11 months of 2021.

Additional data from tech and information firm Numerator parallels the latest U.S. Census report. Numerator, which adjusts for price changes as well as for seasonal variation and holiday and trading-day differences, found that retail sales increased 3.9% at food and beverage stores from October to November and were up 11.1% over 2021.

Meanwhile, the downturn in overall retail and foodservice sales in November is seen by some analysts as a signal of consumer pullback amid fears of a recession. “The weakness in sales comes despite the boost to real incomes from the continued sharp falls in gasoline prices in recent weeks, and suggests that higher borrowing costs, slower employment growth and an unusually low saving rate are now catching up with consumers,” Andrew Hunter, senior U.S. economist at Capital Economics, told U.S. News and World Report.

Chip West, director of category strategy and national sales for Vericast, told Progressive Grocer that the data underscores the resilience and role of the grocery business.  "Consumers definitely cut back on retail spending in the midst of holiday shopping and high prices. Ongoing inflation, although slowly subsiding, has been taking its toll on the consumer, and the pivot to essentials versus discretionary items is taking hold," he remarked. "In November, grocery showed gains while most other retail categories show declines. That’s significant when we think of it as needs versus wants."