Sales of fresh and frozen seafood across U.S. retailers declined in July despite continued price drops, but the dip was less severe than the months leading up to it.
The price per unit across all food and beverage categories rose 1.5 percent in July compared to July 2023, but prices across seafood categories declined in the month, according to data from market research firm Circana analyzed by 210 Analytics.
Shelf-stable seafood saw the biggest price reduction of 4.3 percent on average. Frozen seafood prices declined 2.2 percent, while fresh seafood prices dropped 1 percent year over year.
“Looking across all seafood varieties … pricing continues to come down – although more so in frozen than other areas,” Circana Team Lead of Client Insights Melissa Rodriguez told SeafoodSource, referencing prices during the 13 weeks ending 14 July.
Inflation-weary consumers continued to buy shelf-stable seafood, as sales in the category rose 1.5 percent in July to USD 263 million (EUR 241 million), according to Circana.
“We know that pricing has been favorable for shelf-stable seafood and, compared to both fresh and frozen seafood, offers a more economical variety,” Rodriguez said. “The other thing that we find interesting is the number of items being offered within the shelf-stable seafood space, with average items per store increasing over 5 percent in the last year.”
Sustainable options in particular are increasing in the sub-category, “marrying consumers’ want for value proposition with their social awareness purposes,” Rodriguez said.
Even though seafood remains more expensive than meat and poultry, the protein “has a very powerful health and sustainability halo; those are two reasons to spend a little more,” 210 Analytics Principal Anne-Marie Roerink said.
Fresh seafood sales declined 0.2 percent in July to USD 656 million (EUR 600 million) compared to July 2023, while sales by volume rose 0.7 percent. Frozen seafood sales decreased 3.5 percent by value to USD 603 million (EUR 552 million) in July, but sales by volume jumped 2.8 percent.
“While deflation still leaves a bit of a gap on the dollar growth side of things, it feels like consumers are starting to recognize that seafood prices have come down substantially, and volume is starting to strengthen a bit,” Roerink told SeafoodSource.
Also contributing to higher U.S. grocery purchases was the fact that tight finances and mounting job market pressure have led to consumers making more trips to the grocery store rather than going out to eat, according to Roerink. Price increases on restaurant menus continued to outpace food-at-home inflation, rising 4.1 percent in June, according to the U.S. Bureau of Labor Statistics June report, Roerink said.
“Consumers are making more home-prepared meals across all occasions, but also integrate grocery deli-prepared foods and meals more often as they balance money against time, nutrition, mood, sustainability, and more,” she said.
Rodriguez said as the year rolls on, it will be important for stores and restaurants to highlight seafood during special occasions and celebrations, as the more attention retailers can bring to the seafood space in their stores, the better.
"Retailers should be asking what they can do to drive differentiation … what can be marked as special, unique, etcetera,” she said. “Targeting high-value seafood buyers is also extremely important. What’s interesting is that only 53 percent of households purchase seafood, but the top 10 percent of consumers account for nearly half of seafood sales. Ask these folks what they’re after.”
To that end, retailers like California chain Gelson’s expanded its sushi and skin-pack offerings in July based on consumer feedback, whilebrands such as Gorton's, Gorton’s have targeted Gen Z and millennial customers in recent campaigns.
July was the latest of several tough months for seafood sales at U.S. retail, in which deflationary prices did not translate to higher sales. The sector has not seen significant year-over-year sales boosts since February.
“Shoppers are being squeezed by inflation and have continued to cut back on seafood – one of the grocery store's most expensive food options,” Chuck Anderson, the vice president of operations and partner at Dallas, Texas, U.S.A.-based Certified Quality Foods, said in June.
