Club, grocery take lion’s share of COVID-19 meat dollars

Spending on meat in the club channel is still increasing, up 1.4 percentage points since the first pandemic measurement, the four weeks ending March 22. Traditional grocery, the largest channel, had a very high share during April, when shelter-in-place mandates were in place for the majority of states.

The traditional grocery and club channels continue to see an above average share of the pandemic meat dollar (IRI).
The traditional grocery and club channels continue to see an above average share of the pandemic meat dollar (IRI).

The traditional grocery and club channels continue to see an above average share of the pandemic meat dollar. Spending on meat in the club channel is still increasing, up 1.4 percentage points since the first pandemic measurement, the four weeks ending March 22. Traditional grocery, the largest channel, had a very high share during April, when shelter-in-place mandates were in place for the majority of states. Health/Specialty grocers and discount grocery have seen a bit of a decline in their share of meat spending since the pre-pandemic period as well, ending the most recent period at just 2.0% — although had only been at 2.2% for the 4 weeks ending March.

Consumer concerns stay elevated

The second full week of August was the fifth of eight non-holiday weeks between Independence Day and Labor Day, in which everyday demand alone drives sales. Consumer concern over the COVID-19 pandemic remained highly elevated and several severe weather events rendered hundreds of thousands of households along the Eastern seaboard and Midwest without power.

Additionally, economic pressure is being compounded by the delay over the extension of unemployment benefits and uncertainty over a second round of stimulus payments. IRI primary shopper research released August 11 found that that if Americans were to receive a second stimulus check from the U.S. government, they would be more likely to spend it on meat than other food and beverages. In all, 21% of consumers said they would buy more meat, 20% more produce and 7% would purchase restaurant meals more often.

To the contrary, IRI also asked how the loss of a weekly unemployment benefit of $600 might affect shopping behavior. The top answer among current beneficiaries of the benefit was buy less meat at 35%, followed by buy fewer fresh fruits and vegetables at 29%, buy fewer premium products at 24%, switch more purchases to store brands vs. national brands at 19%, and buy fewer convenient meals to instead cook from scratch at 18%.

The net result of all the positive and negative forces for the meat department was double-digit dollar gains, at +14.8% during the week ending August 9 versus the comparable week year ago. While the 22nd week of double-digit dollar gains, this also marked the lowest year-over-year gain since the onset of the pandemic purchasing starting March 15. Sales gains were far below average in states affected by hurricane Isaias, due to continued power outages in Connecticut (+9.5%) and New York (+8.8%). In each, processed meat sales gains were double that of fresh. Volume gained held at 5.9%. At an average of $3.84 during the week of August 9, prices continued to move in favor of the consumer, which eroded dollar gains a little.

So far during the pandemic, starting March 15 through August 9, dollar sales are up 33.1% and volume sales have increased 20.2% versus the same period last year. This translates into an additional $8.3 billion in meat department sales during the pandemic, which includes an additional $3.8 billion for beef, $1.1 billion for chicken and $870 million for pork. Unit sales continue to do well, with 11.9 million more transactions compared with same week year ago and 868 million more transactions since the pandemic began. This continues to indicate more frequent and deep meat shopping engagement than previously seen.

What’s next?

Consumer concern over COVID-19 remains high but stable. Everyday spending on groceries, including meat, will increasingly depend on shoppers’ individual financial situation as economic pressure and uncertainty is mounting. Back-to-school season is in full swing, though it looks very differently from prior years in most states. This will continue to impact year-over-year trend lines, particularly for meats affected by breakfast and lunch occasions with many more children at home while participating in virtual education.

Between the continued social distancing mandates, highly elevated consumer concern about the virus, economic pressure and the impact of virtual schooling, meat 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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