Amid a growing concern over the coronavirus, grocery sales are experiencing unprecedented spikes along with shifting buying patterns. 210 Analytics analyzed the IRI weekly findings, made possible by the International Dairy Deli Bakery Association (IDDBA).
For the week ending March 22, 2020, total store sales increased just shy of 60% vs. the comparable week in 2019. While nonedibles, such as paper goods, cleaning products and hand sanitizer, led all sales at the onset of coronavirus cases in the U.S., food sales took over the week of March 15 and have ever since. Center store edibles increased more than 80% the week of March 22, and the fresh perimeter advanced 45.1% vs. the comparable week in 2019.
The lead department in perimeter sales and growth was meat, with sales up more than 91%. Dairy has been ramping up steadily and increased sales 60%. “Understanding how consumers are shifting their food purchases in the current landscape is incredibly important to even begin to understand what’s next,” said Jeremy Johnson, VP of education for IDDBA. “For instance, we’re seeing consumers shift to fewer, larger trips as social distancing sets in. We’re seeing a revival of center store as consumers seek shelf-stable categories. The big question is what that will mean for dairy, deli and bakery departments down the road.”
Total Store, Perimeter and Department sales (March 1, 8, 15 and 22)
Source: IRI, total U.S., multioutlet
Dairy sales increased sharply (60%), driven by large increases in butter, margarine and packaged cheese. “Many retailers have seen a surge in demand for basics, such as milk, eggs and cheese, with some areas more than doubling their regular sales levels,” said Abrielle Backhaus, research coordinator for IDDBA. “People are cooking more meals, eating breakfast at home more often, and we’re also seeing an increase in baking as entertainment for the kids or a little treat during these challenging times.”
Sales in the baking supply aisle are up 109%, according to IRI, which also found eggs an area in which demand often exceeded the available offering over the past few weeks. Shipt shopper Chris Trevino in the San Antonio market said, “Eggs and dairy remain hit or miss. Sometimes you can find eggs, half-and-half or butter, other times I strike out. I wish there was an app algorithm I could access to give me info on hot spots of product, eggs especially.”
Deli: A Story of Mixed Results
Deli is a story of two tales. On the one hand, deli cheese and deli meat have experienced significant increases in early March. On the other hand, sales of prepared foods have dropped off with many retailers having closed made-to-order counters, self-serve buffets, salad bars and hot bars.
Deli Department Sales (March 1, 8, 15 and 22)
Source: IRI, total U.S., multioutlet
Random-weight deli meat sales increased 37.5% over the week of March 22, which was down slightly from 40.4% the week prior. The two largest sellers, deli turkey and ham, each gained about $15 million over the comparable week in 2019, which translates into a 37.6% increase for turkey and 47.6% for ham. With shortages in the meat department, it is likely some shoppers also purchased deli meats to backfill as the dinner protein. Walmart shopper Mike Freeman noted, “It’s slim pickings in the meat department, so I picked up some eggs, bacon and ham and we’ll have breakfast for dinner one evening.”
Random-weight deli cheese sales increased 47.5% over the week ending March 22. The four biggest sellers all saw high increases. Packaged cheese in the refrigerated aisle increased even more, at 80%, following 72.2% the week prior. “A lot of breakfast, lunch and snack occasions have moved to at-home,” said Angela Bozo, education director for IDDBA. “That means infinitely more sandwiches, cheese snacks and meals using cheese being created at home, which is driving these kinds of numbers. To accommodate shoppers looking for speedy trips with minimal interaction, we advise retailers create easy grab-and-go stock of their most popular items.”
The total deli-prepared category decreased about 24% vs. the same week last year. This was driven by large decreases in all self-service and full-service areas, including soup (-82.8%), trays (-66.1%), combination meals (-49.0%) as well as the big sellers of entrees (-22.4%), appetizers (-24.2%), sandwiches (-29.4%) and salads (35.2%). Sales of refrigerated meals exceeded those of deli prepared the week of March 22, with an increase of 30.4%.
“Many retailers have closed self- and full-service offerings, which is what is driving the decreases in these areas,” said Eric Richard, industry relations coordinator for IDDBA. “Some retailers are instead packaging deli-prepared offerings and making them available as refrigerated meals. Others are teaming up with local restaurants to provide packaged meal variety.”
Sales in the bakery aisle increased 60.8% over the week ending March 22, which was down slightly from the week prior. IRI found an increase of 49.2% for combined cookies and crackers.
Bakery Sales (March 1, 8, 15 and 22)
Source: IRI, total U.S., multioutlet
School and office closures are driving more at-home breakfast, coffee break and lunch occasions, which drove significant jumps in bakery sales.
On the one hand, IRI data shows big jumps in the more functional bakery aisle items, such as bread, rolls and buns. "Looking at the sales surges in peanut butter, jelly, deli meats and hot dogs, it is clear that shoppers are looking for convenient, fulfilling lunch and dinner options,” said Jonna Parker, fresh team leader for IRI. “Considering that hot dog sales were up 126% over this same week and deli meat advanced 38%, the demand for bread, rolls and buns is a given. Likewise, bagels and English muffins saw big increases also.”
On the other hand, more indulgent bakery items, such as pastries, doughnuts and bakery snacks also saw increased sales over the week of March 22 vs. the comparable week in 2019.
Cookies and Crackers
Other baked goods, including cookies and crackers, saw big increases as well, likely driven by the combination of pantry stocking and increased everyday needs. Sales of crackers started to gear up at the onset of the coronavirus-related measures, at 9.1% over the week ending March 8. Sales continued to be highly elevated the week ending March 22, at 69%. Cookies went from seeing some sales pressure early in March to a 53.5% increase for the week ending March 22 vs. the comparable week in 2019.
As many retailers have closed or reduced their in-store bakery offering, sales increases were slightly down, in large part driven by the fresh cake business, that was off by nearly 25%. The second larger seller, breads, did increase substantially, as did most functional items.
In part, these spikes in dairy, deli meat, deli cheese and bakery can be attributed to the combination of panic buying and fridge/freezer stocking. IRI found that among those stocking up, the top goal is having a two-week supply. However, the sales surges address the increased everyday need as well. The increase in home-cooked meals is a given with mandated restaurant/restaurant seating area closures around the country.
Additionally, among households with children, 69% have kids staying home from school or day care vs. 38% the week prior, and 47% are doing fewer activities and sports. And lastly, consumers are looking to boost their nutritional intake and build their immune systems, and from their buying patterns, it certainly appears meat matters during times of crisis. These are all drivers of increased everyday demand of the grocery channel vs. foodservice.
The subsequent week, March 23-28, saw an increase of mandatory shelter-at-home orders, further social distancing guidelines and a rapid increase of confirmed COVID-19 cases.