By Chris DuBois, IRI
First it was toilet paper, now it’s meat. Amid concerns over the meat supply chain as a result of plant closures due to the coronavirus, as well as stock-up behavior, U.S. consumers have been making a beeline for the meat aisle. Some grocers are now even restricting the number of purchases due to this increased demand. What’s been happening in the store, and what can retailers, suppliers and consumers prepare for next?
Purchase and Shopping Behavior in the Meat Aisle
Since COVID-19 lockdowns began in March, meat department sales have surged and have quickly become the category leader of the fresh perimeter. According to IRI data, for the week ending May 3, meat department dollar sales were up 51.3% and volume increased 37.2%.
Year-to-date through May 3, meat department dollar sales were up 23.3%, boasting double-digit growth for eight weeks running. Year-to-date volume sales through May 3 were up 17.1% over the same period in 2019.
The overall 51.3% meat department gain was fueled by double-digit gains for all proteins. Beef and pork saw the highest percentage dollar gains, which were also their highest since late March. Lamb saw a triple-digit increase the week of Easter but then dropped down to -43% the following week and has been working its way back up to the pre-Easter level which is consistent year-to-year.
Source: IRI, Total U.S., MULO, 1 week % change vs. YA
The increase in fresh foods like meat tells us that consumers’ shopping trips, specifically the stores they choose to go to, are being driven by what store they feel has the best meat and fresh food selection. Retailers who want to win in this area will need to monitor and communicate their out-of-stocks, as well as find new ways to market and entice consumers with what they do have available. Consumers are not shopping around like they used to, and they are hoping everything is on the shelf at their preferred store.
Deli Meat and Deli-Prepared
While deli meat did see a bump in sales in mid-March, it has since leveled off. When comparing dollar sales increases versus 2019, random weight deli meat was up 6.8%; however, pre-packaged UPC lunchmeat was up even more at 14.9%. The lag in random weight deli meat sales to packaged lunchmeat is at least partially due to some stores closing their service counter where consumers typically get sliced-to-order meat — this is combined with most consumers’ desire to get in and out of the store as quickly as possible.
Of course, deli counters offer consumers what they want most – personalization – and some stores have found a way to drive sliced meat sales by creating pre-sliced grab-and-go options in a variety of weight options, as well as offering cut-to-order online options. Non-UPC sliced-to-order deli meat makes up 68% of total deli meat sales, but sales are down 8.2% when compared to the same week in 2019, whereas, non-UPC deli meat that was pre-sliced in grab-and-go makes up 32% of total deli meat sales and is up 69%.
Overseas sales patterns can help shed some light on what may lie ahead for the U.S. After very similar weeks of stockpiling seen across the world, most countries seem to have shifted to continued elevated purchasing levels for total edibles, with mixed engagement on fresh (meat, produce, bakery, etc.). For food, the everyday baseline for the week ending April 12 (Easter week) trended about 20% above the comparable week in 2019 for all countries. Non-edible sales have mostly leveled off and declined for some countries while frozen food continues to see above-average gains in all countries but Spain.
According to recent IRI survey data, more than one-third of consumers will spend their Coronavirus Aid, Relief & Economic Security Act (CARES) stimulus money on groceries and household essentials. Similar to the Great Recession, consumers’ spending habits are already shifting toward purchasing private label, trying lower-priced brands, buying smaller quantities and cutting back spending on non-essential groceries.
While money will be lost from recession-like shopping habits, the industry can leverage the effect that working from home is currently having (and will continue to have) on Americans for months to come, as they are now making lunch and dinner at home far more than they did pre-pandemic. Taking advantage of opportunities like consumers’ desire to create homemade meals provides CPG manufacturers and retailers with long-lasting opportunities to connect with and educate consumers on how to live in the new normal. However, it is important to keep in mind that cooking from scratch may also be growing stale for consumers, and some are now opting for more convenient options such as frozen snacks and refrigerated pre-packaged (UPC/fixed weight) food.
As we move further into May, there is still too much uncertainty surrounding re-opening the country, which means consumers’ evolved shopping patterns and above-average grocery dollar share remain firm. The closure of many meat manufacturing plants will have a trickle-down effect on processed and deli meats, as consumers may not be able to find their choices every single time, but we believe they will continue to be creative and will simply shift back and forth between proteins depending on what is available.
To stay up to date on IRI’s COVID-19 research and analysis, visit our COVID-19 portal and data dashboard. Also, join us to hear the latest on what’s happening in the meat aisle during our upcoming webinars, “Key Learnings in Meat in the Era of COVID-19” (hosted by IRI on May 20) and COVID-19 Impact: Global Poultry and Egg Purchases, Behaviors (hosted by Watt Global Media on May 28).