Overall food and seafood inflation is dropping, but U.S. shoppers are still buying less fresh and frozen seafood.
Sales of fresh and frozen species continued to fall in October 2023, while sales of shelf-stable products rose, according to Circana data analyzed by Lakeland, Florida, U.S.A.-based retail research firm 210 Analytics.
Seafood prices dropped 0.7 percent for the month, driven by a decline in fresh shellfish prices, which dropped 8.7 percent, and shelf-stable seafood prices, which declined 10.8 percent. The average price per unit across all foods and beverages rose by only 2.5 percent in October 2023 versus October 2022.
"This is far more in line with pre-pandemic inflation levels, yet consumer concern persists,” 210 Analytics Principal Anne-Marie Roerink said. “This is due to the cumulative impact of many months of high inflation, which have resulted in October 2023 prices being 25.3 percent higher than those in October 2020.”
Ambient seafood sales benefitted from a significant decline in prices of 10.8 percent in October, driving up volumes sold by 10.2 percent. However, price deflation led to a 1.7 percent decrease in the value of seafood sold to USD 198 million (EUR 182.4 million).
While frozen seafood inflation rose 1.3 percent in October 2023 versus October 2022, that was below the average pace of inflation, according to Roerink. Frozen seafood sales plunged 10.6 percent in October, driven by a 62 percent decline in crab volumes 12.4 percent drop in value. Frozen shrimp sales dropped 12.5 percent by value and 4.9 percent by volume. Sales of frozen seafood alternatives also declined 13.7 percent by value and 17 percent by volume. Frozen salmon sales and volume performed better – sales rose 2 percent by value and 7.7 percent by volume in October – due to a price decline of 5.2 percent.
“[Salmon prices] still reflected substantial inflation, especially when comparing the average price per pound to three years ago – an increase of 40.3 percent,” Roerink said.
The fresh seafood inflation rate dropped 1.2 percent, due to a 3.7 percent price rise for fresh finfish in October, but fresh seafood sales declined 9.5 percent to USD 417 million (EUR 384.1 million). Fresh shellfish sales plunged 14.1 percent, while fresh finfish sales dropped 7.2 percent.
“The third quarter has been a notably tougher one for both dollars and pounds compared to the first and second quarters of the year, with both pounds and dollars dipping below year-ago levels,” Roerink said. “October continued those tough patterns, with volume declines worsening.”
For the 13 weeks ending 1 October, fresh seafood sales dropped 6 percent to USD 1.5 billion (EUR 1.4 billion), Roerink said during the Elanco-sponsored webinar, “U.S. Retail Seafood Sales Q3 2023.” Overall fresh seafood sales declined 4.6 percent by volume in the quarter to 164 million pounds. While shellfish sales were very strong in the first half of the year due to lower prices luring in consumers, the trend has not continued into the second half of the year, Roerink said.
Fresh salmon sales declined 2.9 percent in the quarter, but the popular finfish is still the “powerhouse” of the fresh seafood department, boasting USD 666 million (EUR 513.5 million) in sales during the quarter. Crab sales were also strong at USD 233 million (EUR 214.7 million), followed by shrimp at around USD 19 million (EUR 17.5 million).
Seafood prices have declined in recent months, but shoppers are still paying USD 9.31 (EUR 8.58) per pound on average for fresh seafood, which is “significantly higher” than the three top-selling animal proteins, Roerink said.
The average price of chicken was USD 3.02 (EUR 2.78) per pound in October, while pork was USD 3.14 (EUR 2.89) per pound and beef was USD 6.15 (EUR 5.67) per pound.
“Affordability is the biggest [issue] to address,” Roerink said.
Because consumers compare the price of seafood to chicken, ground beef, and other less expensive proteins, retailers need to give them reasons to spend a little more on seafood, according to Roerink.
“That’s where the healthier aspects come in. Talk about the wonderful taste, health benefits, and sustainability,” Roerink suggested.
Seafood retailers also need to be aggressive on price points to catch the eye of the consumer, according to Roerink.
"Affordability has to be front and center,” she said.
Retailers are garnering incremental seafood sales by focusing on value-added seafood dishes in the deli department and preparing restaurant-style meals that consumers can heat or eat at home.
“Retailers have done very well…to engage the massive millennial generation [who] consume seafood in different ways,” Roerink said.
The popularity of sushi, poke bowls, and other prepared seafood offerings led to an overall 3.4 percent increase in seafood deli sales in Q3 2023.
Retailers have an opportunity to show consumers the value of eating at home, since price inflation for food eaten at home rose 2.1 percent in October 2023 versus October 2022, according to the U.S. Bureau of Labor Statistics’ Consumer Price Index, while the inflation rate for food eaten away from home jumped 5.4 percent.
Photo courtesy of RossHelen/Shutterstock
