Grocery out of stocks holding steady (KR)

Since the initial stockpiling in the middle of March, grocery stores have struggled to restock their shelves. In-stock levels for consumer product goods have plateaued at a lower level of 82% compared to a baseline of 90% in the last couple of weeks, as seen in the following table. Initially, the first week of April recovered from the end of March as stores were replenished from warehouses and distribution centers. Since then, the increased consumption, change of demand to food at home from away from home, and production complications have proved so far to be intractable challenges to restoring in stock levels.

Three Insights | Grocery out of stocks (KR), food inflation (KR), beer sales hit pandemic high (STZ) - three insights 51820

Food inflation needs an Asterix (KR, SFM, GO)

The food at home prices rose 2.6% month over month in April, the largest increase since 1974, as seen in the following chart. The March increase was 0.5% in comparison. The food at home index increased 4.1% over the trailing twelve months. In April, egg prices rose 16%, the most of any food item. Over the past year, the meats, poultry, fish, and egg category rose 6.8%. Until in-stock levels are returned closer to pre-pandemic levels, gauges of inflation are not as telling. During the pandemic, consumers have been trained to purchase what they can with many items sold out and shopping trips limited to once a week. So historical brand preference and price comparisons are not the only considerations now. 

Three Insights | Grocery out of stocks (KR), food inflation (KR), beer sales hit pandemic high (STZ) - three insights 51820 2

Beer sales reach a new high (STZ, BUD, TAP)

Off-premise beer sales grew 29.3% for the week ended May 9, surpassing the peak dollar sales during the pandemic. The week ended May 9 was the largest in dollars for a beer, cider, and flavored malt beverages (FMB) since last year’s 4th of July week. Mexican import beers grew 33.5% during the Cinco de Mayo week. Constellation Brands was likely a principal beneficiary as Heineken’s Mexican brands have had shortages recently since the Mexican government shut down breweries in April. Hard seltzers logged another week of blistering growth at 334%. Super-premium beers grew 32.7% (Michelob Ultra), premium light beers grew 16.3% (Bud Light, Coors Light, and Miller Lite), craft beers grew 23.7%, cider grew 18.6%, budget beer grew 6.7%, and non-alcoholic beer grew 44.4%. In the convenience channel, sales increased by 24.6%. Thirty packs and 24 pack cases increased 36% and 35%, respectively, while 12 bags grew 52% driven by hard seltzer (commonly packaged in 12 packs). The average price of a case has increased by 5% or $1 over the past four weeks. Total alcohol sales off-premise grew 34.8%, led by spirits up 48.5%, while wine grew 35.8%.

Three Insights | Grocery out of stocks (KR), food inflation (KR), beer sales hit pandemic high (STZ) - three insights 51820 3