Traffic comparison (GO, SFM)
Grocery Outlet visitations increased 11.8% in February, decelerating slightly from 13.7% in January. Sprouts Farmers Market visitations decreased by 6.6% in February, improving slightly from a 10% decrease in January.
The traffic data captures rate of change well, while the absolute change reflects a decrease in the number of people in the shopping party. Sprouts Farmers Market SSS were between 2% and 2.9% in Q2-Q4 last year, but inflation accelerated. Consensus expectations are for SSS to be +2.1% in Q1. Grocery Outlet SSS accelerated last year from 5.2% in Q1 to 15% in the 2H while inflation accelerated. Consensus expectations are for SSS to be +10% in Q1, which the traffic data suggests is low.
Wine DTC shipments (NAPA, VWE)
In February, DTC wine shipments saw their strongest month since November. DTC shipments grew 6% in dollars, but volumes declined more than 6%. The average price per bottle increased to $50.01, up 13% YOY. With the smaller harvest in 2022 and inflationary pressures, wineries are depending upon price increases for revenue growth and offsetting margin pressure. The CPI for wine only increased 2.8% YOY in February, with difficulty raising prices at the low end.
Yuengling shortage (TAP)
Yuengling launched draft beer in three Midwestern states in February followed by packaged beer in March. Yuengling said a combination of greater demand and a shortage of green and clear bottles have led to reduced availability. Molson Coors is the distributor for Yuengling’s new markets and is brewing the beer out of its Fort Worth facility. Yuengling expects supply to catch up to demand over the next couple of months. YTD through February 26 off-premise sales of Yuengling decreased by 5.3% while volumes have decreased by 10.2%. Yuengling is underperforming in the beer category despite the shortages in the Midwest. Off-premise sales of beer increased 4.4% in the MULOC channel YTD through February 26 according to IRI. Beer case sales decreased by 2%, but the average price increased by 6.5%. It’s a reminder that supply chain shortages are still impacting the industry.
