Volume pressure sharpens as produce inflation climbs higher in August
Food inflation remains extremely high and consumers are feeling the pain. They are making changes to their restaurant engagement as well as their grocery purchases, according to the August IRI survey of primary grocery shoppers.
The price per unit across all foods and beverages in the IRI-measured multi-outlet stores, including supermarkets, club, mass, supercenter, drug and military, accelerated further to an increase of 14.3% in the four weeks ending August 28th, 2022 versus year ago.
This is up from 13.3% in July. August inflation was +16.6% in the center of the store (grocery) and +13.3% for perishables. Compared with August 2019, prices across all foods and beverages were up 27.4%.
“Inflation has been accelerating since early fall 2021, drought conditions are severe, consumer confidence is low and grocery patterns are switching very rapidly," Joe Watson, VP, Retail, Foodservice & Wholesale for IFPA.
"Amid the continued disruption, IRI, 210 Analytics and IFPA remain committed to bringing the industry the latest trends and analysis in fresh produce.”
The four August 2022 weeks brought $57.7 billion in total food and beverage sales, which was up +8.7% versus year ago. This was about the same year-on-year increase as seen in July. August 2022 dollar sales were up +25.7% versus August 2019 — the pre-pandemic normal. P
erishables, including produce, seafood, meat, bakery and deli, had average dollar performance, but center-store item sales increased a little over 10%.
Year-on-year gains were inflation-boosted, with unit sales down -5.0%. Unit declines have averaged between 4% and 5% for several months now.
Additionally, units dropped below 2019 levels for all areas of the store. Yet, prices having increased more than 27% versus 2019 and units down a mere -1.3% shows that consumer demand at retail remains strong.
Fruit and vegetable sales
The overall volume pressure in fruit is echoed by nearly all the big sellers, said Jonna Parker, Team Lead Fresh at IRI.
“Berries, that have been an incredible pandemic powerhouse, fell 5.6% behind year-ago levels," she said.
"The deepest volume declines among the top 10 players were measured among mixed fruit and mandarins, but avocados and melons also backslid significantly.”
August’s vegetable performance was very mixed, said Watson. “While most top sellers increased dollar sales, only cucumbers experienced an increase in volume. This is a stark illustration of the difficult marketplace.”