Grocery in-stock levels plateau (ACI)
Grocery in-stock levels ticked down 1% in the latest week to 87% compared to a baseline level of 90%, as seen in the following chart. The frozen category is still the most challenged from an inventory perspective. Alcohol beverages had been the category with the best in-stock levels, but in the last week, it ticked down two points to 88%. The change could be Mexican beer imports that have been impacted by the brewery shutdowns. As we noted yesterday, Nielsen reported Mexican beer sales declined 2.5% in the week ended July 4. Inventory shortages at food retailers played a big part in changing consumers’ food shopping behavior during the pandemic. As customers couldn’t find their preferred item, they usually substituted a different brand or item (instead of visiting another store). This change in behavior helped drive strong pricing power at the retailer because the price was less important.
Fresh produce slowing but still indicating elevated at-home meal consumption (SFM)
During the week ended July 5, fresh produce sales grew 9.1%, as seen in the following chart. Frozen produce sales increased by 24.4% while shelf-stable grew 18.1%. Fresh fruit sales tend to be impulse purchases, while vegetable sales indicate meal preparation. We believe fresh vegetable demand is a better indicator of meal consumption at home, stripping out the stockpiling effect, which has lessened but has continued during the pandemic. Fresh vegetable sales still indicate elevated at-home meal consumption. According to IRI’s survey, consumers are preparing 84% of all meals at home currently, down slightly from 89% at the peak. 38% of the workforce expects to be working from home five days a week compared to 15% pre-COVID-19.
On-premise alcohol improved right up to the new restrictions (BUD)
For the week ended June 27, sales velocity improved to -10% compared to pre-COVID-19 levels for on-premise businesses (bars, restaurants, taprooms, etc.) still open. There is a significant level of state by state difference depending upon government restrictions and COVID-19 incidence. Over the July 4th weekend Nielsen surveyed consumers who drank over the past three months in Texas, Florida, California, and New York. Visitations to the on-premise businesses were stable, with 38% having been out primarily for an eating occasion and 14% primarily out for a drinking occasion. There was a significant increase in visits in New York, but flattish trends in the other states. When asked if the recent COVID-19 outbreak in parts of the country had affected decisions to go out to the on-premise, 61% said they chose not to go out at all, 27% remain unaffected, and 12% decided to go to a different venue. Takeout and delivery remained significant, with 65% ordering food and 11% ordering alcohol. The most popular means of ordering alcohol for takeout/delivery are directly from restaurants/bars (45%), from third-party delivery apps (38%) and online liquor, wine and beer retailers (31%). Wine remained the most popular ‘alcohol type to go’ (red, then white), well above craft beer and cocktails in second and third place, respectively.