Meat gains soften as consumers feel economic pressure

Five months into the pandemic, 57% of primary grocery shoppers were extremely concerned about COVID-19, according to wave 16 of the IRI sentiment survey. The concern is driving continued elevated spending in food retail, while also hampering the recovery of foodservice.

The net result for the meat department was a double-digit gain in dollars, at +15.4% during the week ending August 2 versus the comparable week year ago (IRI).
The net result for the meat department was a double-digit gain in dollars, at +15.4% during the week ending August 2 versus the comparable week year ago (IRI).

Five months into the pandemic, 57% of primary grocery shoppers were extremely concerned about COVID-19, according to wave 16 of the IRI sentiment survey. The concern is driving continued elevated spending in food retail, while also hampering the recovery of foodservice. The survey, conducted July 24 to 26, found that 30% of primary grocery shoppers are experiencing greater financial pressure than last year and 25% are buying more value-size items to save money, up from 20% in late May.

Additionally, 65% of consumers expect the economic crisis to last at least 12 more months — the highest percentage across all survey waves and near double that of the 37% who expected the economy to need a year to recover back in March. Economic pressure tends to have big impacts on grocery shopping, including channel choice, the type of items and quantity bought, the importance of price and promotions and more. Meat sales may have also been impacted in preparation for hurricane/tropical storm Isaias that left several hundred thousand consumers without power along the East coast. Much like seen the last week of June, the final days of July/early August saw some softer gains than those seen in the prior two weeks.

The net result for the meat department was a double-digit gain in dollars, at +15.4% during the week ending August 2 versus the comparable week year ago. While hard to believe, this marks the lowest year-over-year gain since the onset of the pandemic purchasing starting March 15, and yet, the 21st week of double-digit year-over-year gains. Dollars sales gains in hard-hit hurricane areas were just +8.4% for Connecticut, where 145,000 households remain without power as of August 9, and New York sales grew 9.9% — both well below average.

Volume gained 6.0% as prices continued to become a little more favorable to consumers — which also erodes dollar gains somewhat. At an average of $3.87 during the week of August 2nd, prices have dropped $0.29 per pound since the peak of $4.16 the third week of June.

So far during the pandemic, starting March 15 through August 2, dollar sales are up 33.7% and volume sales have increased 20.7% versus the same period last year. This translates into an additional $8.1 billion in meat department sales during the pandemic, which includes an additional $3.7 billion for beef, $1.1 billion for chicken and $851 million for pork. Unit sales continue to do well, with 10.5 million more transactions compared with same week year ago and 852 million more transactions since the pandemic began. 

What’s next?

Back-to-school season is around the corner for several states, and half of parents with children ages six to twelve are now expecting their children to partake in virtual education (50%), with an additional 15% expecting mixed virtual and in-person education. Only 19% of parents expect their younger kids to go back face-to-face. Parents of teenagers expect 24% to go back in person, with 42% expecting virtual education only and 19% a mixed virtual and in-person system. This will once more completely change year-over-year trending, as many more meal occasions for these students will remain at-home.

Between the continued social distancing mandates, highly elevated consumer concern about the virus, economic pressure and the impact of virtual schooling, grocery sales are likely to remain highly elevated for the foreseeable future. 

View our continuing coverage of the coronavirus/COVID-19 pandemic.

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