This item is contributed by Anne-Marie Roerink of 210 Analytics LLC, based on her research.
Since the onset of coronavirus in the U.S., the results for the deli departments have been mixed. The limited service/assortment and/or shutting down of bakery and deli counters across many stores have had a severely negative impact on sales in areas such as deli prepared and bake-to-order cakes. 210 Analytics analyzed the IRI weekly sales findings, made possible by IDDBA.
Total store sales, including the fresh perimeter, gained 22%, while total edibles excluding fresh were up 31.4% over the week of April 26 versus year ago. Boosted by yet another good week for meat, the total perimeter increased 23.1% even as sales in the deli and fresh bakery departments pulled down the average.
“These results are encouraging,” said Jeremy Johnson, vice president of Education for IDDBA. “Going up against Easter 2019 last week made it unclear if demand was coming down or how much was the effect of the holiday week. Sales gains for the week of April 26 versus the comparable week in 2019 were right back up in the double-digits and that bodes well for the rest of May. Yet, Easter provided important lessons to address the new normal in holiday celebrations with Mother’s Day and Memorial Day coming up later this month.”
Deli: continued mixed results
For week ending April 26, both deli cheese and meat (random weight) came in ahead of the comparable week in 2019 with double-digit increases. The severe declines for deli-prepared (random-weight and some private label UPC) seen since the onset of coronavirus in the U.S. continued. It is important to note that for some retailers, results would have been affected by self-serve and/or full-service areas being closed.
For all three deli areas, sales patterns started to shift significantly the week ending of March 15. Deli cheese and meat sales jumped by double-digits, and deli prepared quickly started to flatten out and decline in subsequent weeks.
Deli meat
Random weight deli meat sales rebounded from their flat week when going up against Easter 2019. Sales were up nearly 16.9% in dollars and 11.6% in volume. Patterns relative to grab-and-go versus bulk counter sales remained the same as seen in prior weeks. While service counter sales made up 68% of deli meat sales this week, sales were down 4.7%. Sales for service counter deli meat that has been previously sliced for grab-and-go, but still sold non-UPC, was up 80.0%.
But not everyone is a fan of this solution, as seen on CCF: “We had to go to another store for lunch meat and meats as you can only buy prepackaged. Not the brands we want, nor the amounts needed. You can socially distance at the counter even if it means order, shop and pick up. We will be going to another store until this is resolved.” Customer comments on package size variety for the reasons of budget, household size and variety also continued to come in on CCF.
Meanwhile, pre-packaged, UPC-ed refrigerated luncheon meats continued to outperform random weight deli meat, with dollars up 24.6% and a higher increase for volume sales as well. However, the difference compare with prior weeks was much diminished.
Deli-prepared
A big question on everyone’s mind surrounds deli operations in both the self-service and full-service areas. In the meantime, sales remained down for deli-prepared, affected by closed counters and shopping pattern changes. As shoppers increasingly try to reduce the number of trips to the store and engage in online ordering, deli-prepared food sales were down 36.3% with volume off 34.8%. Sales were off for all offerings and meal occasions, whether breakfast items, combo meals, trays or deli pizza.
“Deli-prepared remained a hard-hit area,” said Eric Richard, industry relations coordinator with IDDBA. “At the same time, frozen entrees, including pizza, have enjoyed double-digit growth since the onset of coronavirus so there is demand for time-saving, convenient solutions, but engagement with deli-prepared remained low. Some states are allowing restaurants to re-open, albeit with limited capacity, which may pose another challenge for deli-prepared sales in the next few weeks. Making sure that deli-prepared offerings, whether pre-packaged or made-to-order, are on the radar is crucial for everyday solutions or holidays such as Mother’s Day coming up.”
What’s next?
The widely covered meat shortages in consumer media caused a renewed run on meat the first week of May, which likely caused a subsequent boost for other departments, including dairy and bakery. Going into May, several states have released detailed plans for re-opening in phases. In some, restaurants could reopen starting May 1, though often with social distancing and occupancy rate restrictions in place. This may further affect deli-prepared results, in particular. The reopening of restaurants in these states may provide an indicator of consumers’ mental readiness and economic ability to re-engage with foodservice. For the foreseeable future, it is likely that grocery retailing will continue to capture an above-average share of the food dollar.
210 Analytics, IRI and IDDBA will provide sales updates every week. Meanwhile, please thank the grocery industry, from farm to store, for all they do to ensure supply during these unprecedented times.
To access Meatingplace’s ongoing coverage of the COVID-19 pandemic, click here. To access our map of processing plants that have reported positive tests among employees, have closed and/or have reopened, click here. For the time lapse map showing how the virus has spread across the meat industry, click here.