Beer sales slow adjusted for the holiday calendar shift (BUD)
Off-premise beer category sales increased 12.2% for the week ended September 5, which included the Labor Day weekend, as seen in the chart below. The growth rate accelerated some 500bps sequentially but was less than expected given the calendar shift for the holiday weekend. Hard seltzer sales grew 99% for the week. The average case price of hard seltzer fell 10.1% compared to last year, indicating some significant promotions headed into the holiday weekend. The overall average price per case for the beer category increased by 2.6% to $25.56. The average price for craft beer decreased by 1.1%. Craft beer sales increased by 10% for the week. Mexican imports grew 8.7%, while super-premium brands increased by 14.9%. The top five growth drivers for the week were White Claw variety pack #2, Michelob Ultra, Truly Hard Seltzer lemonade mixed pack, Bud Light Seltzer variety pack, and Modelo Especial. Sales of 30-packs grew 16.7% compared to 24-packs that were up 22.8%, 12-packs that were up 24.1%, and 6-packs that were up 2.5%.
August grocery sales decelerate while restaurant and bar sales are less negative (ACI)
According to the Census Bureau, retail sales ex. Autos and gasoline in August increased 4.0% YOY, accelerating 50bps from July. Retail sales have slowed in August as stimulus payments have fallen. Food and beverage store sales decreased 1.2% month over month. Food services and drinking places sales increased 4.7% month over month after rising 4.1% in July. Not seasonally adjusted (how companies report results), food and beverage store sales increased 8.3% YOY in August, decelerating from 13.0% in July. Grocery store sales increased 7.6% YOY in August, decelerating from 12.3% in July. Food services and drinking places sales (restaurants and bars) decreased 17.1% YOY in August, improving from an 18.0% decrease in July.
Fewer grocery promotions driving higher food bills (KR)
According to Nielsen, consumers paid 4.1% more for groceries in August than a year ago. 26.2% of grocery units were sold on promotion in August than the national average of 31.4% of items being purchased on promotion. The 5.2% difference across the grocery store represents higher prices at checkout. Units sold on promotion were down 10% points versus pre-pandemic levels in the grocery department and down 12% in the household care category. The meat department has seen a significant increase in promotions around the Labor Day weekend, but it was not enough to lower grocery bills.
According to the US Bureau of Labor Statistics, the food at home CPI decreased 0.1% month over month in August. On an unadjusted basis, the food at home index rose 4.6% for the 12 months ended in August. The food away from home index increased by 0.3% in August month over month. On an unadjusted basis, the food away from home index rose 3.5% for the 12 months ended in August. Kroger said increased promotions and price investments were the main reason gross margins only expanded 5bps in the past quarter despite robust ID sales growth of nearly 15%. One explanation may be that Kroger is more promotional in pricing meat and online delivery fees than across the board promotions.
