The share of all meals that were prepared at home averaged 76.8% in August, according to a recent category update from 210 Analytics (with data provided by Circana).
“We typically see a drop in the share of home-prepared meals during the summer months,” said Jonna Parker, team lead of fresh with Circana, “However, 76.8% marks a multi-year low in our monthly shopper survey and restaurants saw strong engagement with on-premise dining (53% of consumers), takeout (50%), and delivery (20%).”
“A few of the consumer attitude questions we’ve been tracking since March 2020 finally moved a few points in the right direction: Slightly less concerned about the present and slightly more optimistic for the future,” said Anne-Marie Roerink, president of 210 Analytics LLC, a San Antonio-based market research and marketing strategies firm which put out the report, which surveyed 1,000-plus primary grocery shoppers.
“A big question mark will be gasoline prices, which seem to be rising again and have always had a tremendous negative impact on grocery spending,” Roerink added.
While consumer sentiment is a bit more positive for now, 94% of Americans are still worried about the cost of food and beverages amid rising gasoline and other costs.
“The combination of more occasions flowing to restaurants and the ongoing impact of money-saving measures taken when in-store meant continued declines in units and volume for many categories around the store,” Parker explained.
With the ongoing high cost of food, consumers are trying to prevent at-home waste as a reaction and changing meal preparation tactics. They are doing more with leftovers and using more simple ingredients leading to deli, dairy, and bakery excelling.
“Deli and bakery often provide bulk offerings that allow consumers to purchase as little or much as they wish and dairy is a prime example of how staples are fueling today’s meal preparation,” said Heather Prach, VP of education for the IDDBA.
As a result, consumer curiosity has also somewhat subdued with only 16% browsing the aisles looking for new items to try. Routine meals help prevent buyer’s remorse over dollars spent on an unfavorable meal or item.
Shopping still remains in-store-centric with only 5% of consumers buying all groceries online. Yet, another 31% will purchase a little/some (21%), or most items (10%) online.
Here are some other key category and consumer behavior takeaways from the month of August, according to 210 Analytics:
The price per unit across all foods and beverages in the Circana-measured multi-outlet stores, including supermarkets, club, mass, supercenter, drug, and military, increased by 3.6% in August (the five weeks ending Sept. 3).
While more in line with pre-pandemic inflation levels, the ongoing high levels of consumer concern relate to the cumulative effect of many months of high inflation. When comparing August 2023 to August 2020, prices have increased by 25.2%.
Produce shows promise
It was a “nice strong month for produce, mirroring the July numbers,” said Roerink. August 2023 fresh produce sales reached $7.5 billion. While the dollar growth slowed, fresh produce performance is still outpacing that of total food and beverages, and frozen and canned.
Retailers invested in fruit prices in August where the average price per pound for fruit decreased by 2.1% over year-ago levels. Vegetables did sustain small price increases (0.5% vs. August 2022).
Produce dollar sales growth has been in the plus since the third quarter of 2021, whereas produce pounds have mostly tracked behind as shoppers leveraged how much they purchased as a way to save.
Volume sales exceeded year-ago levels for the first time in April, July was the second time this year when produce pounds moved above year-ago levels, and August marks the third time this year. This is promising for September with a potential added holiday boost surrounding Labor Day sales.
Meat sees recessionary trends
“Meat saw strength in grinds and chicken, reminiscent of recessionary patterns with continued pressure on units pulling down the overall performance,” said Roerink.
The average price per pound in the meat department across all cuts and kinds, both fixed and random weight, was virtually unchanged from the levels seen in August 2022. Processed meat tends to have higher prices, but its average price per pound has continued to come down in August, primarily driven by bacon and sausage.
For the month, flat prices in combination with fewer pounds sold than last year, resulted in meat dollar sales being down 1.5% year-on-year. On an annual basis, however, meat sales still tracked 0.5% ahead in dollars.
Fresh meat pounds were very close to year-ago levels in August 2023, as were the dollars, which was driven by a strong performance in chicken as well as turkey and fresh exotic, which includes bison. In the 52-week view, chicken was the only protein that increased pound sales. The renewed inflation in beef has resulted in rising pressure on pound sales, though ground beef is an important exception.
Seafood still struggles
Seafood prices reflected below-average inflation across the board. In fact, fresh and frozen seafood prices were lower in August 2023 than in August 2022.
Despite favorable price conditions, both fresh and frozen seafood continued to experience year-over-year volume declines in August 2023 with only shelf-stable seafood increased in dollars and pounds in both the shorter- and longer-term views.
“Seafood had an unexpectedly tough month in fresh and frozen, but gains for shelf-stable,” said Roerink.
Ambient tuna in cans and pouches reached $205 million in sales for the month, which reflected an improvement of 2% over August 2022. The improvement was driven by canned tuna, which represents the vast majority of dollars.
Deli prepared: Pizza for the win
Despite restaurant occasions rising in the summer, deli prepared is doing well, especially pizza, according to Roerink. “Deli and bakery inflation also started to cool, with August bakery price increases down to single digits.”
Dairy dollars being pulled down by eggs
While “cottage cheese is having a moment with growth outpacing all areas in dairy,” according to Roerink, “Overall dairy dollars are being pulled down by the rapid deflation in eggs.”
The average price per unit for dairy fell below year-ago levels by -3.5% in August compared to an increase of 13.4% in the 52-week period, largely due to egg prices normalizing rapidly.
Frozen foods mixed
Frozen food had a very mixed performance at the category level in August. The report showed that some areas, such as meat/poultry, seafood, snacks, and beverages, lost ground, whereas produce, desserts, and baked goods gained.
In the case of meat/poultry and seafood, the decrease in prices has not (yet) resulted in the strengthening of demand. The biggest sales gains came from frozen potatoes/onions and desserts/toppings.
Frozen food numbers are starting to fall more in line with the total store, but continue to experience declines in units and volume with a few exceptions, said Roerink.