This year, shopping for the Thanksgiving Day dinner is shaping up to be a more difficult and costly affair, according to CPG market researcher IRI.
Chicago-based IRI said Thursday that the latest data from its supply index shows high — and worsening — out-of-stock rates for five Thanksgiving-related food categories across stores nationally. What’s more, the product shortages already are translating into fewer retailer promotions and, going forward, shoppers can expect fewer holiday discounts and deals, IRI’s promotion tracker indicates.
On the product side, availability of whipped toppings, liquid gravy, frozen pie/pastry shells, refrigerated pies and bakery pies categories is down five to 11 percentage points for the week ending Oct. 19 versus a year earlier, IRI reported. In-stocks for those items also are between 1% and 9% lower than the recent two-month average.
Liquid gravy had the lowest in-stock rates this week among the challenged categories cited by IRI, with availability down 11 percentage points from a year ago and nine percentage points from last two months’ average.
Because of the reduced supply, IRI said, retailers are running 1% to 9% fewer promotions in the five Thanksgiving-related categories compared with the same period last year. On average, prices in those categories are up 3.6% year over year. The largest increase has come from frozen pie/pastry shells, with pricing 6% higher, according to the IRI Inflation Tracker.
“As the holiday season approaches and widespread supply-chain challenges continue to impact industries across the economy, IRI is tracking a basket of items for their availability, demand, price and promotion for Halloween, Thanksgiving and Christmas,” Krishnakumar “KK” Davey, president of IRI Client Engagement, said in a statement. “Halloween season is shaping up nicely with the category growing in double digits, and we are recording significant out-of-stock rates on several Thanksgiving-related grocery categories at this time.”
Through the week ending Oct. 17, all the primary edible categories in the IRI Supply Index showed in-stock percentages below 90%, including frozen and alcohol (each at 85%), frozen (86%), beverages (87%), general food (88%) and refrigerated (89%).
In the general food category, the lowest in-stock percentages were cookies and crackers (84%), baked goods (84%) and snacks (85%). Among frozen segments, the lowest in-stocks were frozen snacks and baked goods, each at 84%. Lower availability percentages were seen in refrigerated foods, including baked goods (78%) and meals (82%). Similarly, beverages had lower in-stock rates in sports/energy drinks (81%), juice (82%), bottled water (83%) and carbonated drinks (84%).
With lower in-stocks across categories, consumers should expect decreased promotional levels from retailers — and a higher likelihood of having to make substitutions, IRI noted. The researcher explained that although some of those categories normally receive stepped-up promotional activity as the holidays near, high demand and low in-stock rates will give retailers less incentive to do so this year.
IRI’s CPG Promotions Index recorded lower levels of promotional intensity (merchandising activity such as display, feature or temporary price reduction) for refrigerated food, frozen food and beverages for the week ended Oct. 10. For the same period, beverages, general food and refrigerated food saw decreased levels of promotional depth (discounting for items purchased on deal).
The combination of fewer deals and more out-of-stocks will push shoppers to substitute items across key Thanksgiving categories — such as buying fresh desserts in place of frozen ones — go to other stores to find the products they want, IRI said. The researcher added that it’s seeing early indications of that scenario popping up in other Thanksgiving-related categories — including cranberries and stuffing — as the holiday approaches and demand spikes.
The IRI CPG Demand, Supply, Price Inflation and Promotion Indices are calculated from daily point-of-sale and e-commerce transaction data reported from major chains’ sales transactions.
“IRI’s real-time data provides critical insights for retailers and manufacturers managing an increasingly complex and volatile supply chain environment, particularly ahead of high-demand events,” Davey added. “By tracking availability of critical holiday-related products and categories, IRI is enabling our retailer and manufacturing clients to make better decisions on merchandising, promotional activity and other variables to drive their growth and profitability and deliver for shoppers.”