Seafood prices continued to decline in March 2024, but the drop is not yet translating to higher sales.
Frozen seafood sales fell 6.4 percent by volume and 5.7 percent by value to USD 870 million (EUR 819 million), and fresh seafood sales dropped 3.2 percent by volume and 4.6 percent by value to USD 819 million (EUR 771 million), according to Circana data analyzed by Lakeland, Florida, U.S.A.-based 210 Analytics. Only shelf-stable seafood sales increased in March, and that was by 0.3 percent in value to USD 335 million (EUR 315 million), though sales by volume declined 2 percent.
Overall fish and seafood prices declined 2.6 percent in March 2024 versus March 2023, according to the U.S. Bureau of Labor Statistics’ Consumer Price Index. Fresh fish and seafood prices dropped 3.1 percent, frozen fish and seafood prices declined 2.6 percent, processed fish and seafood prices fell 2 percent, and shelf-stable seafood prices stayed the same.
The shrinkage in sales occurred even as most seafood prices dropped. Circana data indicates frozen seafood was 7.5 percent less expensive in March 2023 year over year, while fresh seafood prices fell 1.4 percent Only shelf-stable seafood prices incresased, rising 2.4 percent.
However, at an average price of USD 9.43 (EUR 8.88) per pound for fresh seafood, prices are “significantly” higher than the average price per pound for the three biggest animal proteins – chicken at USD 3.07 (EUR 2.89) per pound, pork at USD 3.14 (EUR 2.96) per pound, and beef at USD 6.42 (EUR 6.04) per pound, according to 210 Analytics Principal Anne-Marie Roerink.
And consumers may be feeling sticker shock on certain seafood species. For instance, fresh lobster prices shot up 16 percent in March versus a year ago, to USD 10.19 (EUR 9.59) per pound on average.
Seafood prices continue to be lower than overall food inflation, which increased by 2.2 percent in March compared to last March, according to the CPI. While food at home prices inclined only 1.2 percent, food away from home prices shot up 4.2 percent.
“The new CPI data reflects what most consumers will have noticed on any recent trip through the drive-through or opening up a menu – the ongoing increases in restaurant prices,” Roerink said. “The restaurant rate of inflation has been outpacing retail and what’s important to keep in mind is that this is a higher percentage over an already higher ring to start with, if you think about it from a cost per capita point of view. That means the home-cooked meal is becoming even more of a solution to cash-strapped consumers.”
As a result, seafood will likely remain a retail-centric marketplace in which “tonnage will need to pick up to help offset the deflationary gap,” Roerink said.
“The cumulative impact of inflation is such that price matters in the current marketplace. Not just the price of the seafood, but in comparison to other center-of-plate or ingredient cuts in meat and poultry,” she said.
Shoppers bought more value-priced fish in March, with fresh tilapia sales jumping up 21 percent and frozen pollock sales increasing 9.2 percent. On the other hand, fresh crab sales slipped 8.6 percent, while fresh shrimp sales dropped 7.7 percent and fresh salmon sales declined 2.6 percent. Cod sales rose 13.8 percent, according to Circana, while frozen shrimp sales decreased 6.7 percent and frozen salmon sales dropped by 6.2 percent.
Roerink said one strategy retailers can pursue to retain and grow sales is appealing to the 10 percent of seafood shoppers – a group that accounts for nearly half of all seafood sales – by further educating them on how seafood can be used for a variety of meal occasions.
“These top consumers already integrate seafood into their meal lineup quite often and it will be added variety or a different meal occasion such as lunch that may add an additional seafood meal,” she said.
A key question for the industry is whether falling prices will eventually turn around the recent decline in U.S. seafood sales. The U.S. Department of Agriculture predicted seafood prices will decline in 2024 by 1.7 percent, per Supermarket News, while the “all food” category will see a 2.5 percent increase and food-at-home prices will rise 1.6 percent, according to the USDA forecast.
A leveling-out of prices is already having a positive effect on overall grocery sales, which rose 2.8 percent in Q1 2024 to reach USD 219.3 billion (EUR 206 billion), according to the U.S. Census Bureau. Sales at foodservice and drinking establishments rose even more sharply, to 6.6 percent. Total retail sales, excluding automobiles and gasoline, were up 2.7 percent unadjusted year over year in March 2024 versus March 2023, according to the National Retail Federation.
“As inflation for goods levels off, March’s data demonstrates steady spending by value-focused consumers who continue to benefit from a strong labor market and real wage gains,” NRF President and CEO Matthew Shay said in a press release. “In this highly competitive market, retailers are having to keep prices as low as possible to meet the demand of consumers looking to stretch their family budgets.”
