Grocer “Real” Sales Gains Accelerated In October

Articles
December 01, 2011

Grocer “Real” Sales Gains Accelerated In October

Even when deflated by The Food Institute Grocery Store Price Index (GSPI), sales at the nation’s grocery stores posted a significant 4.9% increase during October on the heels of an upwardly revised 6.2% increase in September.

Even when deflated by The Food Institute Grocery Store Price Index (GSPI), sales at the nation’s grocery stores posted a significant 4.9% increase during October on the heels of an upwardly revised 6.2% increase in September. This marked the 12th consecutive month what The Food Institute calls “real sales” increased from prior year levels, indicating the retailers’ success in passing along increases they had been experiencing through much of 2010 and early 2001. Grocers’ real or deflated sales in 2010 declined in six of 12 months but appear to be on the rebound right now.

Eating & drinking place sales also remain in positive territory, with October marking the 21st consecutive month they have done so, “real” growth during October returned to a more typical levels however after jumping a significant 5.7% in September.

Both estimates for real sales at grocery stores and eating and drinking places are preliminary and subject to ongoing revisions. The methodology behind the estimates involves computing the difference between the change in sales figures for all grocery stores or eating places as reported by the Bureau of Census from the change in the FOOD INSTITUTE Grocery Store and Eating and Drinking Place Indices, which are weighted for food and non-food items typically sold through supermarkets, and for food-away-from-home, and alcohol, respectively.

What does this mean? According to The Food Institute, after enjoying little change in prices during 2009 and 2010, consumers have pretty much accepted retail food price inflation as a way of life in 2011, and grocers are seeing their real sales rise even after these higher prices are taken into account. Looking ahead to 2012, food price inflation is expected to moderate from current levels but still rise as much as 4%. It remains to be seen how food retailers will deal with higher prices they encounter next year however.