Inflation on the price of seafood at U.S. retail rose again in May, especially within the frozen and shelf-stable categories, which affected sales by volume during the month.
According to new data from market research firm Circana analyzed by 210 Analytics, frozen seafood inflation rose 11.6 percent in May, and shelf-stable seafood prices increased 11.7 percent. Fresh seafood prices also increased but not as steep, rising 3.7 percent primarily due to a spike in fresh finfish prices.
As a result, sales by value rose across categories in May, but sales by volume remained primarily flat or decreased.
“Across all temperature zones, fresh, frozen, and shelf-stable seafood delivered dollar sales growth … but there is lots of unit pressure,” 210 Analytics Principal Anne-Marie Roerink told SeafoodSource.
Fresh seafood sales increased to nearly USD 699 million (EUR 602 million) in May, but that total represented the slowest growth by value of the three categories, rising 2.4 percent compared to last May. Sales by volume in the category declined 1.2 percent.
Frozen seafood sales rose 4.6 percent by value to nearly USD 644 million (EUR 556 million) in May, while sales by volume decreased 6.3 percent. Shelf-stable seafood represented the fastest-growing segment by value, as sales increased 12 percent to USD 288 million (EUR 248 million) in May year over year; sales by volume rose just 0.3 percent in the category.
Within the latter category, sardine sales were a standout, jumping 30 percent by both value and volume in May. Annual sales of sardines have now exceeded USD 410 million (EUR 353 million) due to a 17.7 percent increase in sales by volume over the past year, Roerink noted.
Seafood inflation rose at a higher pace than overall food inflation in May, which increased 3.1 percent, according to the U.S. Bureau of Labor Statistics’ Consumer Price Index (CPI). The price of food away from home continued to increase at a higher rate (3.5 percent) than food at home (2.7 percent) during the month, according to the CPI.
Month over month, the rise in food at home prices was lower than “elevated” figures in April, rising only 0.2 percent and presenting grocery shoppers with some welcome news, according to FMI Vice President of Tax, Trade, Sustainability, and Policy Development Andy Harig, who explained a peak in oil prices drove food prices higher in April.
Though May represented a slight reprieve, a number of factors continue to place upward pressure on costs throughout the food supply chain.
“Weather-related disruptions remain a significant concern including persistent drought, diminished snowpack out West, and an El Niño weather pattern that could negatively affect agricultural production,” Harig said.
Simultaneously, the impact of increased fertilizer costs earlier this spring may not be felt on store shelves until this fall and beyond.
“Food companies are also facing increased costs for certain imported ingredients, equipment, and packaging materials as tariffs continue to affect critical supply chain inputs. So, uncertainty around food price inflation will likely persist through the summer,” Harig said.
Additionally, prolonged gas price pressure may be starting to test consumer resilience, Roerink said. Average gas prices in the U.S. remained above USD 4.00 (EUR 3.44) per gallon for the second month in a row in May, resulting in shifting consumer shopping behaviors, such as shoppers shopping more at club stores and less at convenience stores.
Nevertheless, U.S. retail sales grew 7.2 percent in May, while grocery and beverage store sales rose 6 percent, according to the CNBC/National Retail Federation (NRF) Retail Monitor.
“Retail sales maintained momentum in May, driven by a resilient labor market and consumers’ continued willingness to spend on retail goods despite pressure from elevated gas prices, tariffs, and the conflict in the Middle East,” NRF President and CEO Matthew Shay said in a release. “As support from this year’s large tax refunds fades, consumers are prioritizing essentials and finding creative ways to stretch their household budgets.”
