Survey says consumers’ spend on groceries remains elevated
Our weekly survey points to a slight deceleration in the percentage of consumers who are spending significantly more on groceries from 16% five weeks ago to 12% last week. At the same time, the percentage of consumers who are spending slightly more has increased from 31% to 34%. The combination of consumers spending more remains steady and likely points to consistently higher spending on food at home after the initial stocking up a trip that preceded the stay at home orders.
According to Womply (a CRM provider), local and independent grocers are still experiencing elevated spending. For the week ended April 15, sales were up 50% YOY. The following map depicts the sales growth in the latest week by state.
Grocery closings picking up
The following chart depicts the local store closings, as reported by Womply (a CRM provider). The recent acceleration in the closing of food & beverage stores from 9% closed on April 11 to 27% on April 16 is notable. Grocers are considered an essential business in every state. We have heard about the increasingly difficult conditions for the small and independent grocers, and it appears to be causing more of them to close. The challenges with keeping employees safe are one of the most difficult for the operators. Inventory availability, employee absenteeism, increased costs for sanitizing and cleaning, and employees contracting COVID-19 are also contributing to the decision to close the store. The larger chains have many advantages in dealing with the challenges, but they also have a unionized workforce and have been scrambling to add employees.
Frozen pizza shortage
There have been so many articles on the shortages of certain foods, basics, and necessities, but one that hit home was the shortage of frozen pizza. The additional meals are eaten at home combined with the convenience, comfort food factor, and affordability; it should have been as evident as Purell, N95 masks, and more apparent than toilet paper. Still, I was thinking more about equities in demand. IRI has reported that frozen pizza sales are up 92% YOY in March and April. According to Adweek, that equates to $275M spent on frozen pizza in March in the US. Newman’s Own frozen pizza sales are up 190% since the pandemic began. It all explains why this groundhog video went viral, but it doesn’t tell why pizza was thrown out. https://www.youtube.com/watch?v=8w26vv8FCPg The only tip I have is that Domino’s current take-out promotion price is pretty similar to frozen pizza prices. DiGiorno (owned by Nestle) is the top-ranked brand in the US, while Kraft Heinz and General Mills each own a top-five brand. In the UK, Nomad Foods’ Goodfellas Pizza is the #2 brand.
