GERMANY, Frankfurt. The week ending April 12th marked the year’s earlier Easter as well as the sixth week of the coronavirus-related grocery shopping patterns. Since the onset of coronavirus in the United States, grocery retailing conditions have been unlike any ever experienced in recent history.
Unprecedented pantry, fridge and freezer loading by consumers across the United States emptied stores for days and weeks on end, resulting in incredible sales surges and widespread out-of-stocks conditions. During the week of April 12, many stores further sharpened safety measures, such as metered entry, asking shoppers to limit visits to one person per cart and encouraging consumers to shop just once a week, while avoiding stocking up on any one ite
During these past six weeks, the meat department has emerged as the sales leader of the fresh perimeter and the week of April 12 was no different. Dollar sales increased 43% over the comparable week in 2019 and volume sales increased 36%. This means rather than slowly trending down, sales were actually up week over week as well as year over year. Total perimeter sales were up 18% and food sales excluding fresh were up 30%. While sales were undoubtedly influenced by Easter, celebrations were hardly typical with most consumers under shelter-in-place mandates. This points to a continued higher everyday demand as well. All meat and poultry continued to sell far above typical levels. While small from a dollar perspective, lamb posted the highest percentage gains (+108%), followed by turkey (+60%). Beef continued to have the highest absolute dollar gains (+$188 mill.). Year-to-date, dollar gains for total meat are up 20.2% over the comparable period in 2019.
Significant differences are observed when comparing dollar protein shares between the first week of March, when sales were much in line with 2019 and the early part of 2020, and the week ending April 12. While shares are influenced by holidays and differ from week to week, beef’s share is up nearly two percentage points as a percentage of fresh meat dollar sales. Turkey gained a full point in share in the six week period and pork increased slightly as well. The dollar sales share for chicken was down 3.7 points.
Year-to-date, the patterns are similar, though less pronounced. The same look at volume shows the effect of pricing and the meat industry being out of balance at a macro level in terms of supply and demand. “There was no chicken,” noted a shopper on the Retail Feedback Group’s Constant Customer Feedback (CCF) program. “I don't know why there wasn’t any, but I like chicken breasts fresh, not frozen.”
Frozen is indeed a backup for many consumers. Frozen meat, poultry and seafood sales were up 76.9% over the four weeks ending April 5 versus the comparable four weeks in 2019, according to IRI. Additionally, some restaurants have pivoted their businesses into grocery stores, while some distributors have been going consumer direct. “We used to eat at Tropical Acres Steakhouse in Fort Lauderdale probably every two weeks,” said Yadira Hernandez. “They have turned themselves into a butcher shop. I can purchase a nice New York strip for $9, raw, so it helps me and it helps them stay afloat. They do all dinner proteins, steak, salmon, chicken and apparently they’re going through three times more beef than usual. I hope they continue to do this when restaurants open back up.” Please note that sales generated through foodservice channels is not reflected in these numbers.
Beef and chicken, the two largest proteins, saw the largest increases in terms of dollars during the week of April 12 versus the comparable week in 2019. In absolute dollars, beef sold an additional $188 mill., with 34% of new dollars being generated by ground beef. Chicken generated $43 mill. more during this second week of April versus the same week in 2019.
Total meat department sales once more exceeded $1.6 bn. for the week, with continued gains for all proteins, fresh and processed. The impact of the Easter week can be seen in the types of proteins and cuts sold in fresh, such as lamb, as well as the 179% surge in smoked ham/pork, which came on top of a 245% increase the week prior. Easter 2020 fell two weeks earlier than in 2019, when it fell on April 21st. Processed sales have surged as well since the onset of coronavirus, with sausage, frankfurters and bacon having generated double- or triple-digit sales increases since the week of March 15.
Throughout the past five weeks, volume sales growth has trailed dollars, albeit relatively closely for most proteins. For the week ending April 12, beef and pork showed significant gaps in dollar versus volume growth. Strong beef and pork dollar growth is likely aided by Easter purchases, which prompted more sales going towards premium/more expensive cuts that drive a higher spend per purchase. Turkey and bacon were the only proteins to have higher volume than dollar growth, albeit a mere two percentage points.
European sales patterns can help shed some light on what may lie ahead. After very similar weeks of stockpiling as seen in the US, most countries seem to have shifted to continued elevated purchasing levels for total edibles, with mixed engagement with fresh. Meat is incorporated in the “fresh” line. For food, the everyday baseline for the week ending April 5 trended between 10 and 20% above the comparable week in 2019 for all countries except France. Non-edible sales have mostly leveled off and declined for some. Frozen food continues to see above-average gains in all countries, but Spain.
The third week of April still saw great uncertainty about the “re-opening” of the country. While states were encouraged to begin lifting their executive orders in a phased approach under strict criteria when it is safe to do so, many states extended their stay-at-home orders. Only South Dakota remains free of statewide government restrictions that require businesses to close. Other states are a patchwork of state-specific mandates to “shelter in place,” with expiration dates ranging from the end of April (Indiana and others) to mid-June (Virginia) to indefinitely (California, Maryland, New Jersey and others).
The top question on everyone’s mind is how far the new baseline lies above the old normal. Reality is that it is too early to tell. There has not been a good indicator week yet of what will be the “new normal.” Mid March had the enormous panic purchasing surge, followed by subsequent social distancing and shelter-in-place surges. Next were the two weeks leading up to Easter. In the upcoming two weeks, sales will go up against Easter 2019, which fell on April 21, which yet again complicates any sense of normalcy and data predictions.