Retail meat, poultry sales remain strong in October

Eight months into the pandemic, COVID-19 remains in firm control of how and where people spend their food dollar.

Meat department sales were $5.8 billion during the five October weeks — about $613 million higher than the same time period in 2019 (IRI).
Meat department sales were $5.8 billion during the five October weeks — about $613 million higher than the same time period in 2019 (IRI).

Eight months into the pandemic, COVID-19 remains in firm control of how and where people spend their food dollar.

Restaurant transactions are at only 10% of prior year levels. However, further restaurant comeback is hampered by the rising number of COVID-19 cases combined with restaurants’ outdoor seating capacity being challenged by colder temperatures in northern states.

Combined with virtual schooling and working-from home, dollars at retail continued to pace well ahead of 2019 levels during the month of October, at +8.6% for total edibles (food and beverages, including fresh as well as alcohol, grocery and frozen).

Meat department sales during the week ending October 4th through November 1st increased 11.8% in dollars and 5.5% in volume versus year ago. While this is the lowest dollar gain for any month since March, the volume (pounds) gain of 5.5% is higher than gains in August and June, signaling a strong purchase rate.

Meat department sales were $5.8 billion during the five October weeks — about $613 million higher than the same time period in 2019. On the fresh side, beef accounted for 56% of dollars. Chicken was next at 25% of dollars.

Year-to-date through November 1st, overall meat dollar sales are up 18.0% and volume sales have increased 9.0% versus the same period last year. This translates into an additional $11.5 billion in meat department sales during the pandemic, which includes an additional $5.0 billion for beef, $1.5 billion for chicken and $1.0 billion for pork than during the same period in 2019.

Price per volume

According to the IRI insights on the price per pound volume, prices continued to drop in favor of the consumer, with an average of $3.85 per volume across all meats during the month of October 2020. This was down 0.5% from the September average of $3.87. However, compared to year ago levels, meat prices were slightly higher in October, at +5.9%.  

Beef and pork drove much of the inflation in May and June due to supply shortages. Come October, pork prices are a mere 2.1% higher than they were in October 2019 — resulting in pork being among the lowest areas of inflation together with exotic meats. Beef inflation has also moderated significantly, with the average price per volume now 6.4% over year ago levels. Turkey and lamb prices have the highest percentage increase in October 2020 versus year ago.

Meat gains by protein

The meat department has experienced a tremendous pandemic performance and sales continued to be highly elevated across proteins during the month of October. Lamb continued to have the highest percentage gains, at +30.0% versus the same month year ago, but this is off a very small base. Beef’s performance continued to be astounding, up 11.9% during October.

Chicken saw the smallest gains during the months of May through October, with the exception of September when turkey gains dropped below chicken.  

Beef, by far, had the highest absolute dollar and pound gains during the October weeks, up $279 million in dollars

What’s next?

Everyday demand continues to hold between 10% and 15% above year ago levels as new COVID-19 case counts continue to rise and fall in different regions of the country. However, renewed shelter-in-place restrictions and rising COVID-19 cases are likely to push more dollars to food retail once more. Additionally, the comeback of restaurants transactions is hampered by colder temperatures in northern states. Aided by the effect of online sales, trip reduction, virtual schooling and working-from-home, meat sales are likely to remain well above 2019 levels for many weeks to come. However, holiday demand is likely going to be very different.

According to the latest weekly shopper survey wave by IRI, Thanksgiving will involve much less travel and smaller gatherings.

  • Just over one-quarter of consumers, 26%, expect to host or attend a Thanksgiving meal with family who do not live with them, down sharply from 48% last year.
  • Just 4% will travel out of state to attend a celebration, and only 19% of these people plan to fly.
  • The median number of people at the main Thanksgiving meal is expected to be five this year, down from 8 last year.
  • One-third expect to spend less on groceries for Thanksgiving this year, primarily due to hosting fewer/no guests this year or having to prepare a meal on a tighter budget. Additionally, 22% of those who plan to spend less will buy a smaller turkey and 15% will not buy a whole turkey.

These predictions point to many potential changes for the meat department. Much like the pandemic-affected holidays to date, packer/processors and retailers may consider messaging and promotions that help shoppers find new ways to make the holidays special at home or on a tighter budget, and retailers should plan for an earlier spike in holiday item purchasing than last year. One in five people plan to shop more than three days earlier than last year, either to avoid crowds or out-of-stocks.

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

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