So far this year, the 2020 pandemic-affected holidays have resulted in very robust meat sales performances. Easter, Mother’s Day, Father’s Day and Memorial Day have boosted the already elevated everyday demand to achieve astounding gains versus year-ago levels. Independence Day was no exception, with total meat department sales coming in at $1.66 billion for the week.
While growth percentages versus a year ago were not as high as those seen for Father’s Day week, Anne-Marie Roerink, president of 210 Analytics LLC, noted that it is much tougher to beat year-over-year sales for the Independence Day holiday given the high focus on grilling instead of eating out in regular years. However, the 2020 holiday resulted in a 17.9% increase in dollar sales versus last year. This was the 17th week of double-digit gains since the onset of the COVID-19 pandemic.
While higher prices drove much of this gain, Roerink said the holiday brought meat volume growth too, up 4.1%. The dollar/volume gap continued to improve to 13.8 points. Expectations for the holidays were for smaller gatherings, and unit sales support this assumption. Unit purchases of fresh meat increased by 8.4 million, or 5.2%, over the Fourth of July week last year, while volume increased 4.1%. This points to more but smaller packages sold, she added.
So far during the pandemic, from March 15 through July 5, meat dollar sales are up 36.4%, and volume sales have increased 23.0% versus the same period last year.
Roerink relayed that meat product assortment continues to improve, although still down 28.0% versus the same week last year.
Christine McCracken, executive director of Food & Agribusiness for Rabobank, expects the supply landscape to continue to improve in the upcoming weeks.
“Red meat production continues to run well ahead of year-ago levels, with pork up 9.7% and beef up 4.2%. The industry is working to restore balance following COVID-related disruption and clear up the oversupply. The increase in available meat supplies is weighing on the market, however, and may limit a sharp upturn in wholesale prices near term.”
Meanwhile, although availability and assortment have improved, consumers continue to be frustrated with higher meat prices and fewer meat features.
According to Roerink, Independence Day week typically sees several good traffic-driving promotions, with some stores even opting for loss leaders. This year, however, the holiday did not bring extreme sales. Overall, the fresh promoted price for the holiday week was $3.77 this year versus $2.96 last year.
Looking ahead, IRI’s shopper surveys showed a rebound in concern over COVID-19, with 38% now saying they are more concerned than they were last week. Forty-one percent of Americans are bracing for a longer duration, expecting the health crisis to last at least 12 more months.
“Given the rising concern and the rolling back of restaurant reopenings, foodservice meat demand may plateau, while consumers once more flock to supermarkets for their animal protein needs. It is likely that dollar gains at retail will sit above the 2019 baseline for the foreseeable future,” Roerink said.