Grocery demand accelerates (ACI)
For the week ended Nov. 15, the total CPG demand increased 14% YOY and accelerated 3% from the prior week, as seen in the chart below. Frozen beverages drove the strongest growth of any subcategory within the edible department this past week with a 5% week over week increase and 34% increase year over year. Up 21%, the frozen category continued to lead all major edible categories in the grocery store. Home care was the strongest category with a growth of 28%, likely driven by increased attention to COVID-19. The meat department had its strongest growth rate in two months, with 19% growth.
U.K. grocery remains elevated (NOMD)
For the week ended Nov. 21 total, CPG demand remained flat with the prior week and was up 9% YOY. The frozen food department, up 16% YOY, was the strongest in the edible category. After a brief spike when the increased restrictions went into a place frozen food, and CPG demand settled in at slightly higher levels than the weeks before, as seen in the chart below. The U.K. ordered all non-essential shops, pubs, cafes, and restaurants to close, and people have been encouraged to work from home. The food-at-home consumption in the U.K. is likely at the peak rate currently. Nielsen said in the four weeks ended Oct. 21, U.K. shoppers spent 20% more than the prior year and online sales were up 87%. The UK is Nomad Food's largest country by sales, representing 31% of overall sales.
Food inflation ticks up (KR)
The USDA raised its expectation for grocery stores' food prices this year to 3-4% above 2019. Food inflation was 0.9% last year. The USDA said grocery prices for food increased 3.4% for the year through October compared to 3% for restaurant prices. The agency said beef/veal had the greatest relative price increase this year at 10%. Fresh fruits had the largest relative price decrease at 1%. In recent months, fresh vegetable prices have accelerated largely driven by lettuce prices, as seen in the following chart. This week there was another lettuce recall in 15 states due to possible E. coli contamination. The price increase in vegetables is expected to cause the fresh fruit and vegetable category inflation rate to increase between 0.5% and 1.5% in 2020 despite the decreases in fresh fruit.
