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 +9.8% in March (the five weeks ending April 2), which was down from +11.2% in February and +13.2% in January 2023. Dairy, deli and bakery inflation were above average, according to research from Circana (formerly IRI), 210 Analytics and IDDBA. Deli-prepared foods were positive in a big way in March.
“Within the total deli department, deli-prepared foods were not only the biggest seller, but the aisle also had the best year-on-year growth performance,” Jonna Parker, Team Lead, Fresh with Circana (formerly IRI), pointed out. “Deli-prepared foods only had mild unit pressure of -1%, whereas inflation boosted dollar sales well above year-ago levels. Strong dollars not at the expense of much unit sales indicates a space that is not driven by price but by assortment and awareness. Conversely, deli meat experienced the highest unit pressure of around -7% in both the March and 52-week time periods.”
Deli meat sales (combined fixed and random weight) totaled $788 million in the five March weeks, up slightly in dollars but down -6.7% in units. After being a growth engine for several years, unit sales for grab-and-go sales also fell behind year-ago levels. In the 52-week view, deli meat generated $8.3 billion in sales, with the fastest growth for grab & go that increased in both dollars and units. Service deli sales remained the biggest seller, at $4.9 billion in the latest 52 weeks, however, units were down -11.0% when compared to year-ago levels — the highest decrease seen yet.
Packaged lunchmeat (included in meat department sales) reached $6.4 billion in the most recent 52 weeks. Packaged lunchmeat had aggressive dollar growth in the past year, due to above-average levels of inflation. Dollar growth slowed to +3.7% in March, with units down -9.0% compared with March 2022.
Deli cheese never experienced the big price increases seen in deli meat. Likewise, the demand for deli cheese has been much more stable. Grab-and-go deli cheese continues to drive additional units in the shorter and 52-week views, whereas service cheese experienced unit pressure in March and the past year.
“Entertaining continues to be an area of strength for the store,” said Parker. “March Madness is a great way to continue the Super Bowl-like promotions when entertaining friends and family or taking a night off from cooking. Trays had another strong month, with the 52-week sales up +7.9% versus year ago.”
“Deli-prepared foods address today’s call for convenience and affordability,” Heather Prach, IDDBA’s VP of Education, added. While March brought slight unit pressure, several areas showed flat results or even growth, including entrees, prepared meats, side dishes, soups & chili, and, highest this month, deli-prepared pizza.