Americans Are Buying Fewer Staples as Inflation Crimps Budgets
2022.07.20 19:38
© Bloomberg. A shopper at Gerrity’s Supermarket in Scranton, Pennsylvania, U.S., on Thursday, Feb. 24, 2022. Scranton, Pennsylvania has experienced a recent economic turnaround, but the mood among locals about the state of America remains sour.
(Bloomberg) — Higher prices for personal- and home-care items are finally driving consumers to buy less.
Retail unit sales in the US for items such as laundry detergent, shampoo and diapers fell in the three months through July 10 compared to a year earlier, according to a Bloomberg Intelligence report citing data from market researcher IRI. Volume declined for seven out of the nine categories tracked, with facial cosmetics and adult incontinence products being the only exceptions.
Consumer-goods giants including Procter & Gamble (NYSE:PG) Co. and Kimberly-Clark Corp (NYSE:KMB). have raised prices to counter higher costs for freight, labor and raw materials such as the pulp that goes into toilet paper. Shoppers continue to spend, but the highest inflation since 1981 is making it harder to keep up.
The data suggest that “home and personal-care sales volume may sink more as customers’ shopping bills mount,” Bloomberg Intelligence senior analyst Deborah Aitken wrote in a Wednesday note. She added that companies are still raising prices for home and personal-care goods into the second half of the year.
Prices for housekeeping supplies surged 10.7% in June from a year ago and rose 3.8% for personal-care products, according to the Bureau of Labor Statistics.
The trend is already causing ripples in the industry, with soap and fragrance retailer Bath & Body Works Inc. on Wednesday trimming its profit outlook.
Barclays (LON:BARC) Plc. analyst Lauren Lieberman expects P&G and Colgate-Palmolive (NYSE:CL) to report unit sales declines during earnings next week. Kimberly-Clark, also on tap to release results, is seen modestly increasing volume.
The cracks in demand are spreading to food as well. Even basic groceries such as bread have been hit, with unit purchases from US grocers falling 2.7% in the year through July 2, according to NielsenIQ. PepsiCo (NASDAQ:PEP) Inc. recently reported volume declines at its North America beverage and snacking businesses. Conagra Brands (NYSE:CAG) Inc., the maker of Slim Jim jerky and Hunts tomato sauce, also reported a drop in volume.
In June, unit sales for perishable goods such as meat and produce declined 4.5% from a year ago, according to IRI data cited by the International Dairy Deli Bakery Association.
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