U.S. retail sales revenue from both general merchandise and consumer packaged goods increased by two percent compared to the same month last year while unit sales declined three percent, reports Circana, formerly IRI and The NPD Group.
The growth in spending came mainly from food and beverage CPG spending, which experienced a five percent increase in sales revenue compared to last year, and a two percent sales decline.
“Consumers are engaged and spending, just not at full throttle,” said Marshal Cohen, chief retail industry advisor for Circana, in a statement. “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 [to] seek little luxuries and are willing to pay a premium for most of their purchases.”
The research also found that ecommerce gained the largest share of sales revenue in May, rising over two share points.
In the CPG space, consumers are modifying the way they shop. For example, the average number of items purchased in a shopping trip this year shrunk from 2022. Consumers are also transitioning gradually to value-oriented retailers, according to Circana.
“Price is certainly part of today’s consumer spending story, but it is not the leading force,” said Cohen in a statement. “Consumers are willing to spend if they are presented with something that’s new or delivers greater value, extending the window of opportunity for manufacturers and retailers to make a move and elevate consumer engagement before the tide turns.”
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