Online grocery inflation (CART, PRGO)
Online grocery prices declined by 0.2% in August compared to the previous month. It was the first sequential decrease in the past 27 months, according to the Adobe Digital Price Index report. The index uses Adobe Analytics to analyze over one trillion visits to e-commerce companies. Prices were still 5% above year-ago levels. Overall, online prices were 3.2% lower than a year ago and 0.4% higher than the previous month. 11 of the 18 merchandise categories tracked by the index decreased YOY in August, led by computers and electronics. Seven categories had increased YOY, including personal care, pet products, grocery, and non-prescription drugs. Nonprescription drug prices accelerated 10bps sequentially to 4.6% YOY in August. Nonprescription drugs did not see a surge in prices online, but the inflation rate has been above 4% since the pandemic lockdowns. Online grocery inflation has lagged the overall food at home CPI, likely reflecting the higher markup online and the less price-sensitive customer.
Super Bowl (TAP)
Molson Coors will have a TV commercial during Super Bowl LVIII. Molson Coors purchased commercial time for the most recent Super Bowl for the first time in 33 years. For the next Super Bowl, the ad will feature Coors Light. The price for a 30-second spot during the next Super Bowl is reportedly $7M. Coors Light is the fastest volume share gainer in beer this year.
Beer sales in the off-premise channel increased by 2.2% for the year ended September 9, according to Bump Williams Consulting. Volumes decreased by 3%, even with the prior week. For the latest week, beer sales increased 2.3% while volumes decreased 2.7%. Bud Light sales decreased 26% in the latest week, with volumes down 29.3%. YTD Bud Light sales decreased by 16.9%. Michelob Ultra sales decreased by 0.7%, with volumes down 3.1%, and Budweiser sales down 10.7%, with volumes down 14.7%. In comparison, Miller Lite sales increased 18.2%, with volumes up 12.8%, and Coors Light sales increased 21.6%, with volumes up 16.5%. Modelo Especial sales were up 14.8%, with volumes up 10.1%, and Corona Extra sales increased by 4.6%, with volumes up 0.5%. Bud Light volumes have remained in a -30% trend since the end of April, as seen in the following chart. Boycott fatigue is likely being offset by the loss of shelf space, making the declines self-perpetuating.
Canadian food inflation (L.CN)
The CPI in Canada rose 4.0% YOY in August, accelerating 70bps from July, and was above expectations of 3.7%. Food at home inflation rose 6.9% YOY in August, decelerating from 8.5% in July. Inflation of 6.9% is the lowest it has been since February 2022, as seen in the following chart. Food purchased from restaurants inflation rose by 6.1%. Beef inflation of 11.9% and edible fats and oils inflation of 13.1% were among the drivers in the month.
A recent survey by Nielsen IQ showed that rising food prices were the number one concern for Canadians. Prime Minister Trudeau met with the heads of the five largest grocers in the country to discuss ways to lower food price increases. The Prime Minister said he would amend the Competition Act to remove the efficiencies provision to block mergers that increase market concentration. Removing the provision does nothing to increase competition or lower prices, but it would bring antitrust laws more in line with the U.S. The five largest grocers control about 80% of the grocery market. Loblaw is on our short list.
