Much of our time and energy revolves around food; where we buy it, when and where we’re eating, and what it is we’re actually eating.
Like most industries in today’s evolving digital economy, the dynamics of the grocery business have changed radically. Technology has given us access and that access has provided us with options, and lots of them! We can go online, subscribe to meal delivery services and seek out specialty or bulk providers. However, one thing is for certain, food captures a lot of our attention.
Spending on grocery took up nearly 9% of our overall household income on average in the U.S. and Canada, and almost 13% in the U.K. last year. This finding is according to our latest Mastercard SpendingPulse™ report, which looks at consumer spending across all payment types in 2017. Because food is one of our basic necessities, it’s no surprise that these percentages have fluctuated only slightly since 2007 according to our analysis.
What is interesting is how spend on one of our most fundamental needs varies from country to country. Take a look:
- In 2016, the grocery sector in the U.S. experienced price deflation for the first time since 1967. With the decline, restaurant spend was nearly triple that of grocery spend and there has continued to be strong growth for both sectors.
- The share of online sales in the U.S. has jumped significantly in the last 18 months. We believe the surge is related to retailers finding ways to overcome logistical delivery challenges as well as more consumers wanting efficiency when it comes to groceries.
- Over the past three years, online grocery sales have gained momentum, increasing from 1.8% in 2016, to 3.5% in 2018.
- Brazil saw erratic fluctuations over the last 5 years, with significant growth throughout 2012 and in April 2014. There were significant declines in 2015 that turned a corner and began to rise in 2016 and 2017. This can be attributed to a prolonged recession, however, as indicated, growth rates are returning to positive.
- Australia has had YOY spend growth since 2012. Food retailers and restaurant spending have outpaced overall retail sales growth over the past two years.
- Since 2015, Japan has experienced a consistent decline, most likely due to negative wage growth as well as food and beverage inflation.
Finally, we took a look at when people spend on groceries. In the U.S., Canada and the U.K., December was consistently the biggest month of the year for spending. As consumers shook off the holiday indulgence, January was—perhaps unsurprisingly—consistently the lowest month of the year for the past five years.
With grocery, as with everything else we buy, shopping is highly personal and the experience is increasingly important. Online is gaining traction, but brick and mortar still has a tremendous foothold. There are incredible innovations providing consumers with better experiences both in-store and online, no matter where they are in the world.
For more details on Mastercard SpendingPulse, click here.
About Mastercard SpendingPulse
SpendingPulse reports on national retail sales across all payments types in select markets around the world. The findings are based on aggregate sales activity in the Mastercard payments network, coupled with survey-based estimates for certain other payment forms, such as cash and check.
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