1. In our weekly consumer survey grocery spend remains elevated as seen below:
Local/Independent Grocers Re-accelerating
The re-acceleration in the latest week of grocery sales reported by Womply (a CRM provider) seems to confirm our consumer survey. The local/independent grocers have had a much larger sales increase during the COVID-19 restriction period than the large chains, most likely due to the smaller base of sales and supply chain availability. After the spike in sales on the ides of March, sales decelerated similar to the national chains but remained up YOY. Since the end of March, the small grocers have seen a re-acceleration, as seen in the following chart. We believe the consumers’ shift in spending from food away from home to food at home is longer than the market currently is discounting and certainly longer than a one-time pantry stockpiling.
No Porkin’ a Meat Shortage Is Looming
Smithfield Foods will keep a pork processing plant in South Dakota closed indefinitely at the behest of the governor. The plant was linked to 238 cases of COVID-19 among employees. The plant produces about 4-5% of U.S. pork. Smithfield’s CEO Ken Sullivan said, “It is impossible to keep our grocery stores stocked if our plants are not running.” There have been similar closures in the U.S. of other meat plants, including plants operated by Cargill, Tyson, and JBS. Ken Sullivan added, “The closure of this facility, combined with a growing list of other protein plants that have shuttered across our industry, is pushing our country perilously close to the edge in terms of our meat supply.” Well, one way to get demand down when supply is down 5% is to tell consumers that a major plant has 238 employees with COVID-19.
