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According to a recent category update from 210 Analytics (with data provided by Circana) in June, a survey of 1,000-plus primary grocery shoppers found that nearly seven-in-10 consumers did something special for the July Fourth weekend and more than half have already made special plans for Labor Day.

Cherries, cheese were powerhouse items in June

But how did the other categories perform last month?

Inflation continued to moderate but had little impact on June category unit/volume sales, indicating that, while shoppers might be trading down in a few areas, more than anything they are simply buying less.  

In the previous month of May, the data pointed to fewer and shorter trips closer to home with more than eight-in-10 shoppers looking for deals and applying multiple money-saving measures when buying groceries. Their dollars were shifting between retail and food service, channels, products, and brands. 

However, according to a recent category update from 210 Analytics (with data provided by Circana) in June, a survey of 1,000-plus primary grocery shoppers found that nearly seven-in-10 consumers did something special for the July Fourth weekend and more than half have already made special plans for Labor Day. 

“Cookouts, get-togethers, day trips, and special meals are central to both summer holidays — underscoring the opportunity for grocery retailers to deliver memorable experiences at home,” said Jonna Parker, team lead of fresh foods at Circana.

When it comes to inflation, the survey shows moderation in the past three months, but 86% of consumers still perceive them as much higher (59%) or somewhat higher (27%) when compared to last year. The sustained increases in the cost of groceries and beyond have 93% of consumers concerned ever since prices moved into the double digits in the second quarter of 2022.  

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 6.4% in June (the five weeks ending July 2).

“A few powerhouses show what it’s like to be a household staple with little to no impact on pound sales despite substantial inflation over the past year, including potatoes, eggs, and cheese,” said Anne-Marie Roerink, president of 210 Analytics LLC, a San Antonio-based market research and marketing strategies firm. “On the flip side, crab [with both volume up 34.9% and dollar gains up 9.1% versus June 2022] is the poster child for demonstrating that deflation can indeed lift demand.”

Here are some other key category and consumer behavior takeaways from the month of June, according to 210 Analytics:

Dairy remains a powerhouse despite inflation

Whereas dairy prices over the 52-week view show +17.8% inflation, June prices only increased by +1.1%, largely due to egg prices normalizing. As inflation is starting to slow, so are the year-on-year dollar gains. 

In June, dollar sales were very similar to 2022 overall, but at the subcategory level, growth ranged from +15.5% for cottage cheese to a decline of -17.3% for eggsThat said, they are lapping inflation of +60% or more. 

Cottage cheese has been popular for a while, but natural cheese is a powerhouse in its own right as the second-largest seller behind milk and has very steady unit and pound performances.

Meat inflation recovery stalls

Meat is experiencing substantial pressure, with deflation compounding soft demand in a few areas. In June 2023, flat prices and fewer units and pounds sold than last year resulted in meat dollar sales being down 2.7% year-on-year. On an annual basis, meat sales still tracked 1.6% ahead in dollars, but pounds were 1.7% below the 2022 levels.

The average price per pound in the meat department across all cuts and kinds, stood at $4.58 in June 2023 — virtually unchanged from the levels seen versus last year. Pricing was slightly higher for fresh meat but processed meat prices came down 1.6% from June 2022 levels, primarily driven by bacon.

After months of double-digit inflation, the chicken price at retail caught up with the decreases seen in wholesale. Turkey prices still increased but not nearly as much as in prior months. Making a big difference in June was the average retail price of beef, which increased by 5.5% after several months of deflation.

Volume for meat was trending closer to year-ago levels until the fourth quarter of 2022, but recovery stalled come 2023 and pounds have been trending between 2% and 3% behind the prior year levels.

Produce pumped up for the summer

Produce again could not hold on to the positive pound performance seen at its high point in April (the second quarter averaged out at -1.2% year-over-year), and inflation in fruit is ticking back up. 

Weekly fresh produce sales averaged around $1.6 billion, with two bumps from the holiday weeks (Memorial Day and July 4th), showing that summer is a strong season for fresh produce. In June 2023, pound sales trailed last year's levels by 3.4% but units were down much less at -0.6%. Additionally, the five June weeks generated nearly

$1 billion in berries alone, with cherries proving another powerhouse success story. Cherry sales increased 71.9% over year-ago levels in pounds and 40.3% in dollars.

Deli and bakery start to cool

Deli and bakery inflation also started to cool, with June bakery price increases down to single digits for the first time in many months.

Small indulgences, such as cookies and donuts, are outperforming other areas, with bakery department sales totaling $4.3 billion in June. Ongoing inflation in bakery meant continued dollar gains despite unit sales being down -1.9%. 

In the center aisle bakery, dollar sales increased by +7.8% in June 2023 versus a year ago. The dollar gains were fully driven by inflation, with units down -3.3%, however, there were several big winners in June, including brownies, pies, and cookies.

June also brought year-over-year unit growth for several of the perimeter bakery categories, including cookies, donuts, pies, and croissants. Pies saw a big increase in conjunction with the July Fourth holiday, and in the 52-week view, donut sales jumped over muffins reaching $1.3 billion, up +27.3% in dollars and +8.3% in units.

Deli-prepared foods generated nearly $2.5 billion and had a mild unit pressure of -0.6%. This is in sharp contrast to deli meat, which dropped -5.5% in units year-over-year. 

In the full-year view, the patterns are similar, with the deli-prepared section outperforming cheese, entertaining, and meat significantly. Deli meat sales totaled $817 million in the five June weeks, virtually unchanged in sales dollars compared to June 2022. Still, it was down substantially in pounds. 

Over the past few years, the share of deli meat generated by the service counter has dropped in favor of growing shares for grab-and-go and pre-sliced. This trend can also be seen in June 2023, with grab-and-go dollar sales up +4.9% versus service deli meat being down -2.5%.

In addition, packaged lunch meat reached $6.4 million in June 2023. After many months of substantial, although inflation-driven, dollar gains, June is the first month where sales dipped below year-ago levels. Packaged lunch meat saw pounds drop -10.0% versus a year ago in June vs. -5.7% for deli meat.



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