The retail food industry is facing a number of challenges, including rising prices and declining unit sales. However, dollar growth remains positive, thanks to increased average retail prices (ARPs).
In the latest 12 weeks, dollar growth remained positive across all SPINS-defined channels. However, dollar growth was off from 52-week numbers in all channels, as prices continued to rise and unit sales fell further.
The natural channel, without surprise, has the highest average retail price amongst the channels reviewed. In fact, the natural channel has an average ARP that is almost $1.00 higher than what is seen in conventional grocery. This is likely due to the fact that natural and organic products are often perceived as being higher quality and healthier than conventional products, and therefore command a higher price.
The fact that dollar growth remained positive despite declining unit sales suggests that consumers are still willing to pay higher prices for food. This is a positive sign for the retail food industry, as it means that consumers are still confident in the quality and value of the products they are buying.
The natural channel is outperforming other channels in terms of dollar growth. This is likely due to the increasing popularity of natural and organic products. Consumers are becoming more aware of the benefits of eating healthy, and they are willing to pay more for products that they believe are better for them.