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Category update: Deli department maintains growth trajectory

Supermarket prepared food sales up 6% in April amid restaurant price increases

Prepared foods in supermarket deli departments continue to benefit from favorable price comparisons with restaurants, according to the monthly category sales roundup reports from 210 Analytics and Circana.

Deli sales overall posted strong growth in April, while many categories saw their sales take a hit from the early Easter holiday this year.

Total deli department sales were up 3.5% in April, to $4.2 billion, compared with year-ago sales. That included a 6% gain for deli prepared foods, which, at $2.3 billion, accounted for more than half of total deli sales.

“Deli prepared has resumed its pre-pandemic growth trajectory and is quickly becoming a true alternative to restaurant occasions,” said Anne-Marie Roerink, principal of 210 Analytics and author of the reports.

Within the deli prepared category, prepared meats stood out with dollar sales gains of $13.5% and unit sales growth of 14.2%. Dollar sales of soups and chili were up 16.6%, with unit sales growth of 15.8%, and most other deli prepared subcategories had growth in the mid-single digits.

While the deli cheese and deli entertaining categories both saw dollar sales growth in April — up 0.7% and 4.6%, respectively — deli meat continued to lag, with dollar sales down 2.7% and unit sales down 0.8%, relative to a year ago. Roerink noted that some Easter-related sales of charcuterie may have shifted into March due to this year’s early Easter holiday.

Likewise, the perimeter bakery was also impacted by the Easter shift, with dollar sales of cakes down 6.9% and dollar sales of pies down 21%. Bakery bright spots included donuts, which were up 7.5% in dollar sales, although overall perimeter bakery sales were down 3.7% in April compared with last year.

Berries, avocados, mandarins drive produce gains

Price fluctuations and the early Easter holiday impacted the sales performance of several fresh fruits and vegetables in April. Still, fresh produce overall showed steady gains with 2.5% dollar sales growth, to $7.1 billion, relative to a year ago. That included a 3.5% increase in fruit sales and a 1.5% increase in vegetable sales.

Berries tallied $1 billion in sales for the month, a 2.7% gain over year-ago results, buoyed by a 12.4% increase in pounds sold. Avocados tallied an 18.1% dollar sales gain, on a 3.2% gain in pounds, and mandarins were up 17.4% in dollar sales and 14.8% in pounds.

Grapes, meanwhile, had strong dollar sales growth — up 16.2% — although pounds sold were down 3.1%.

The top vegetables posted mixed sales results in April, with potatoes down 9.8% in dollar sales and 3.8% in pounds, reflecting the Easter shift, while tomatoes, lettuce, onions, peppers, cucumbers, and carrots all posted gains in both dollar sales and pounds sold.

Fresh outperformed processed meat in April

The meat department overall recorded modest sales gains in April, with dollar sales up 1.9% to $7.6 billion, although pounds sold were down 2.1%.

Fresh meat, led by gains in fresh beef, chicken, and pork, saw dollar sales increase 5.9%, on a 3.1% increase in pounds sold. Dollar sales of processed meats, however, were down 6.2% relative to a year ago, and units were down 13.2%, driven in part by a 61.8% decrease in dollar sales of smoked ham amid the Easter shift. Unit sales of smoked ham were down 66.6%.

Gainers among processed meats included bacon, up 3.9% in dollar sales, and dinner sausage, up 2.4%.

Seafood sales decline amid deflation, weak demand

Seafood sales have seen much less inflation than most other categories in the store, and actually have seen deflation in some species, contributing to widespread dollar sales declines in the category, Roerink said.

April sales of fresh seafood were down 6.7% in dollars, to $616 million, compared with a year ago, and down 6.1% in pounds sold. Frozen seafood followed a similar pattern, with dollars down 8.1% to $601 million, and pounds down 3.9%. Shelf-stable seafood eked out a 1.7% increase in dollar sales to $255 million, although unit sales were down 3.3%.

The overall average price per pound for seafood was down 0.6% for fresh, 4.3% for frozen, and 1.9% for shelf-stable, although prices for all seafood segments were up in the mid- to high-single digits compared to three years ago.

Frozen food sales flat; grocers lose share

Overall frozen food sales were flat in April, with dollar sales and unit sales both up just 0.2% vs. a year ago.

The early Easter holiday clearly impacted some frozen categories, such as frozen desserts/toppings (down 20.8% in dollars and 25.2% in units) and baked goods (down 5.1% in dollars and 7.4% in units).

Frozen processed meat showed the biggest April gains, with dollar sales up 9.5% and units up 11.2% relative to a year ago.

According to Circana Household Panel data, frozen food was purchased an average of 49 times in the last 52 weeks, down 1.8% from the previous 52-week span. In addition, deflation and fewer items per basket led to year-over-year declines of 0.8% in dollar sales per trip.

The report also found that the traditional grocery share of overall frozen food sales has fallen to 37.1% year-to-date, down from 39.5% in 2021, as supermarkets ceded their share of frozen products to mass stores/supercenters and online channels.

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