The Earnest files: A new normal for US foodservice and food retail

Exclusive credit and debit card transaction data from Earnest Analytics suggests a range of fascinating emerging trends in US grocery shopping and eating out throughout 2023. This period was marked by price increases being passed on to consumers and the first signals of slowing and changing spending patterns. Less notably, this year is also the first truly “post-Covid” year, with the economy fully open and no major outbreak affecting Americans’ routines.

Unsurprisingly, restaurant transactions have fallen 3% YOY in Q3. This decline can be attributed to increased menu prices and more cautious consumers with dwindling discretionary income. Remarkably, fine dining transactions surged 10% YOY, reflecting growing disparity in spending habits between affluent and lower-income consumers. Meanwhile, a slight surprise was the continued growth in online food orders, up 2% YOY, with a notable 75% increase from Q3 2019 figures, indicating sustained acceptance of virtual channels.

On the retail side, slowing grocery transactions and below-inflation growth in average baskets suggest consumers are being more careful with food spending at home and are downtrading to more affordable options. Moreover, consumers have explored new retailers, which has benefited discounters and warehouse clubs and hit big box stores. Like online food orders, online grocery orders remain strong. In fact, order frequency is growing slightly and basket sizes are significantly expanding as more consumers add an increasing variety of items to their virtual baskets.