Food and grocery sales remain high despite a partial leveling off in April, which saw overall U.S. retail sales fall nearly twice as much as in March.
Sales at food and beverage stores for April (seasonally adjusted) rose 12% year over year but declined 13.1% from March, according to advance estimates from the U.S. Census Bureau. The month-over-month decrease reflects the falloff from sales jumps of 29.3% year over year and 26.9% month to month in March, when consumers rushed to stores and flocked online to stock up on food and essential supplies as the coronavirus outbreak escalated across the country.
The trend was similar for the grocery stores subsegment, with sales climbing 13.2% year over year in April but dropping by the same percentage from March. Grocery store sales for March were up 30.9% year over year and 28.6% from the previous month.
Overall U.S. retail and foodservice sales for April (seasonally adjusted) came in at $403.9 billion, down 21.6% from a year earlier and 16.4% from March. For the February-to-April period, sales fell 7.7% versus the same period a year ago.
Retail trade sales — excluding gas station and automobile and auto parts sales — for April dropped 17.8% year over year and 15.1% from March, the Census Bureau reported.
April’s retail sales numbers reflect a bigger impact from COVID-19 business closures compared with March, according to The National Retail Federation (NRF). Revised U.S. Census figures for March show decreases of 8.3% month over month and 5.7% year over year.
“As predicted, retail sales were bad in April and lower than in March,” NRF Chief Economist Jack Kleinhenz said in a statement. “This should come as no surprise, since April was the first full month when most businesses not considered essential were closed, both in retail and across the economy. But month-to-month comparisons provide little insight other than indicating that most of the economy was on lockdown. Now that we’re in mid-May, many businesses are already starting to reopen. Relief payments and pent-up demand should provide some degree of post-shutdown rebound, but spending will be far from normal and may be choppy going forward.”
NRF noted that online/non-store retailers was the only category seeing sales rise in April, with gains (seasonally adjusted) of 8.4% month over month and 21.6% year over year. On a month-to-month basis, April sales also fell for building materials and garden supply stores (-3.5%), health and personal care stores (-15.2%), general merchandise stores (-20.8%), sporting goods stores (-38%), furniture and home furnishings stores (-58.7%), electronics and appliance stores (-60.6%) and apparel and accessories store (-78.8%).
“I’m still of the opinion that we went into this with the economy on a sound footing and that we will hopefully come out of it the same,” Kleinhenz said. “But we’re going to need more data to tell us whether the underpinnings of the economy have been damaged and how badly. We need to carefully watch the data and learn to understand what it is telling us.”
CPG sales strong so far in May
As shown by the strong performance in food and beverage retail, consumer packaged goods (CPG) continue to see robust sales growth. In-store CPG dollar sales are up 19.1% year over year for the week ended May 9 and 24.3% for the 10 weeks through that date, market researcher Nielsen reported on Friday.
The average unit price for total in-store CPG rose 6.1% versus a year ago. “Price escalation continued at a similar year-over-year pace for in-store total CPG (+6.1%), and specifically fresh meat (+12.3%), fresh meat alternatives (+25.2%) and eggs (+26.1%),” Nielsen stated.
Branded products (+19.3%) edged out private label (+18.5%) in in-store sales for the one-week period, but for the 10 weeks private label (+27.1%) has seen stronger growth than branded (+23.7%).
By department, seafood (+46.2%) and meat (+40.8%) posted the biggest dollar sales gains year over year for the week ended May 9, followed by frozen (+34.2%), dairy (+25.1%), grocery (+19.7%), produce (+19.4%), household care (+18.5%), pet care (+1.3%), and health and beauty care (+0.9%). Categories seeing declines included deli (-0.9%), bakery (-6.7%) and baby care (-7.4%).
The top five segments in terms of dollar sales growth for the week were hand sanitizer (+553.2%), oat milk (+281.7%), fresh meat alternatives (+219.3%), baking yeast (+164%) and lobsters (+122.4%), according to Nielsen.
Online CPG sales have exhibited even stronger growth. For the week ended May 9, online dollar sales surged 27.2% year over year. In the 10-week period, CPG sales jumped 60%. Among departments, gains for the one-week span were recorded in food (+57%), household care (+25.1%), baby care (+21.8%), pet care (+25.5%) and health and beauty care (+4.4%). Hot segments included potato chips (+63.4%), rolls and buns (+77.4%), sunscreen (+16.4%), and pet flea and tick products (+46.6%).
“Within online CPG, we’re seeing the continued high growth in food (+57%), while pet care (+25.5%) had close to a 20% jump from the previous week’s year-over-year growth,” Nielsen observed. “Summer-correlated purchases are heating up.”
Consumers pour dollars into wine
Sales of alcoholic beverages have gotten a boost during the COVID-19 pandemic across grocery, drug and convenience store channels, but wine has seen the strongest gains, according to in-store marketing and digital media specialist Catalina and small-format retail promotions partner Koupon.
For the 10 weeks from Feb. 23 to May 2, dollar sales of wine are up 38% year over year, 34 percentage points higher than the 4% growth in the previous six weeks, Catalina reported. Spirits have seen similar growth, up 42% for the 10-week COVID-19 period versus 10% for the six-week pre-COVID period. For beer, dollar sales rose 35% in the 10 weeks and 9% for the pre-COVID period.
Wine unit sales also climbed 32% from Feb. 23 to May 2, and the number of wine buyers grew 16%, Catalina said. Dollars spent per wine buyer rose 15%, from $62.74 to $71.94, and units purchased per wine buyer advanced 10%, from 6.3 to 6.9.
What’s more, 46% of wine buyers made a repeat purchase (two or more trips) during the 10-week period), compared with 36% a year earlier.
“During the initial panic buy period, the wine category saw the same consumer pantry-loading behaviors as other categories like paper towels and shelf-stable goods,” according to Jeff Dubiel, chief marketing officer of The Wine Group, one of the nation’s largest wine makers. “As we have seen with previous crises, the increased purchase and consumption continued to hold following the initial wave of pantry-loading as consumers adapted to sheltering in place. Americans are resilient, and we have seen and heard wine enthusiasts finding inventive news ways, such as virtual happy hours and wine tastings, to enjoy their favorite beverages with friends and family.”
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