“I opened a restaurant because I wanted to feed people, not because I wanted to figure out whether they live or die.” – Russell Andrade owner of St. Petersburg restaurant and bar Iberian Rooster
More restaurants pause in re-opening (SYY)
More restaurant owners are considering temporarily closing their businesses or just their dining rooms as they contemplate the potential health risks or business risks. There is no law in Florida, Texas, or most others requiring restaurants to take any kind of action when employees test positive for COVID-19. Massachusetts is an outlier that requires a restaurant to close for at least 24 hours to disinfect the space after a worker, patron, or vendor tests positive. Sysco is counting on the continued re-opening of dining rooms for restaurant sales to improve. The recent reduction in dining capacity in several states has led to a drop in restaurant traffic in other states.
Beer sales slow (STZ)
Beer category off-premise sales grew 16.1% during the week ended June 27, according to Nielsen. Beer sales excluding hard seltzers and FMBs grew just 8.1%. Total alcohol sales off-premise grew 19.2%, the second slowest week during the pandemic. Spirits sales grew 29.2%, decelerating from 39.5% last week. The strongest spirits categories during the COVID-19 period are ready to drink cocktails and tequila. Wine grew 18.5%, decelerating from 23.8% the prior week. The strongest price ranges were $11-15 and above $25. Hard seltzer sales grew 187%, decelerating from 234% sequentially. Hard seltzer now represents 10.7% of beer category sales. Super premiums grew 16.7%, craft beer grew 12.9%, Mexican imports grew 11.2%, FMBs excluding hard seltzer grew 10.4%, and premium light beer grew 4.4%. Below premium beer sales declined by 0.6%. Both Corona Extra and Modelo Especial were in the top ten growth brands during the week. Off-premise sales seemed to slow as on-premise sales have picked up. For the two weeks ended June 27, Nielsen reported that on-premise sales in California, New York, Texas, Florida, and Illinois (five states that restricted bar sales into the July 4th weekend) improved to -10% compared to pre-pandemic levels. With bars closed in many states, off-premise sales should accelerate again.
Grocery in-stock levels improving (ACI)
Grocery inventories are slowly returning to pre-pandemic levels, as seen in the table below. Widespread out of stocks in combination with fewer trips to the grocery store helped to change consumer shopping behavior during the pandemic. Out of stocks are highest in the frozen category and not an issue in alcoholic beverages and refrigerated food. High out of stock levels caused consumers to be less brand loyal than in the past and look for substitute products. Consumers also were less price-sensitive as there were fewer selections to choose from. With in-stock levels improving, brand loyalty and price sensitivity will become more important to the purchasing decision.
