Consumers embrace 'just-in-time shopping,’ shift fresh-food spending to save money, Circana finds

29-Feb-2024 - Last updated on 29-Feb-2024 at 15:18 GMT

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To combat high food prices, consumers are increasing store trips and shifting what they purchase in fresh food, including moving away from meat, seafood, and produce to deli and bakery items, Jonna Parker, principal II, fresh foods team lead at Circana, shared during a recent webinar.

Most households (94%) said they were concerned about food cost inflation in 2024, and 70% said it was harder to stay in budget compared to prior months, according to a Circana Shopper Survey. Additionally, 76% of consumers said they have seen price increases in recent months, and 52% are seeing smaller packs for the same price, i.e., shrinkflation.

"People don't look at year-over-year. They look at the shelf. They look at their own wallet. ... We've also seen that price increases have started to come down yet 76% of people still say that they feel that they're going up. Perception is reality."

In response to higher food prices, consumers are buying fewer units per shopping trip but going to the store more frequently to better control their budgets — a trend that Parker described as "just-in-time shopping." Shopping trips increased 7.4% between 2019 and 2023, with fresh food trips up 5.3% for the same period, according to Circana Integrated Fresh data for the 52 weeks, ending Dec. 31, 2023.

“Trips are the highest they have ever been to any retail store for any food and beverage. The concept of just-in-time shopping [is] buying what you need when you need it," she said. "We are making 14 more trips per household, on average per year. ... People are using the more trips frequency tactics to control their spending."

Leveraging its Demand Forecasting Platform, Circana predicted retail food and beverage to grow between 2-3% in dollars for the year, with price per volume growth coming in at 1-2% for 2024.

In 2024, Circana also predicts that beverages and deli will outperform F&B volume growth; bakery, refrigerated, produce, general food, and seafood will be on par with volume growth; and frozen and meat will underperform.

‘Deli and bakery are arguably the most interesting and differentiated departments’

Circana also shared how consumer behavior across fresh food categories, including meat, produce, deli, bakery, and seafood, has shifted since 2019.

“We are only seeing a 5% increase in trips in fresh ...[but] not all departments are seeing more trips. ... We are buying more units of fresh foods than we were previously. So, there certainly is an opportunity to offer the consumer more things on these more frequent trips - that is actually one of our biggest needs in the fresh foods departments right now."

Despite prices going up since 2019, overall trips for deli increased by 2.3 with stable household penetration. While bakery units dropped 3 million from 2022-2023 and trips are down by 0.9 percentage points. Household penetration has increased slightly and is currently at 99.5%.

“Deli and bakery are arguably the most interesting and differentiated departments from where we were five years ago. Trips to deli are now up and spending is up. ... This isn't a sudden romance with traditional service case lunchmeat. This is making deli more convenient and more relevant more often through actually a lot of prepackaged items and items that don't require you to engage with a service case.”

Despite pandemic frequency gains, meat has started to see fewer trips, Parker said. Seafood is also seeing the fewest trips in the last five years, she added.

"Meat has given back their frequency and actually trips are relatively flat from where they work through pandemic units and pounds are drifting downwards," Parker said. "Seafood — where trips at their all time lowest — needs engagement in this more frequent world."