CHICAGO — Following the executive order signed on August 8 in the U.S. for an extension of $400 in weekly unemployment benefits, the U.S. Department of Labor reports it will be weeks before benefits make their way to recipients.

As IRI continues to monitor the global pandemic, the company is releasing a new report, “Potential Impact of Reduced Unemployment Benefit Changes on Food & Beverage Spending,” which assesses the impact of these cuts on grocery spending based on surveys and high-frequency, point-of-sale purchase data that tracks $2.6 billion of daily purchases on groceries.

Report Highlights

Recent Consumer Purchase Behavior

1. Growth for at-home edible spending has slowed in the past couple of weeks in multi-outlet stores (food, drug, mass, club, dollar, military), amounting to 5 percentage points growth or $0.5 billion less edible sales per week.
2. Most categories have seen deceleration in growth with prepared meals, meat and cookies showing the most impact, while milk, bread and beverage alcohol are minimally affected.
3. Changes in edible spending suggest an emerging correlation with unemployment rates in some, but not all U.S. states.

Potential Implications for CPG and Retail

• CPG manufacturers and retailers should be prepared to act quickly as grocery spending continues to slow.
• As recessionary behaviors take hold, retailers will want to sharpen their price-value messaging, highlight their opening price point products, and adapt their end-of-the-month assortment and pricing strategies (e.g., promotion of smaller packs) to attract shoppers in-store and online.
• Brands should continue to tailor their price-range value proposition to key retailers and their individual stores/markets; consider bringing back targeted price promotions.