Inflation on seafood prices at U.S. retailers continued to ease to start the new year, but that did not lead to increased sales of seafood, as fresh and frozen seafood sales and volume dipped in January.
Frozen seafood prices declined 6.6 percent to USD 7.32 (EUR 6.80) per pound on average year over year, according to new Circana data analyzed by 210 Analytics. Fresh seafood prices dropped 3.6 percent year over year to an average price of USD 9.26 (EUR 8.60) per pound, while shelf-stable seafood prices fell 0.5 percent year over year.
However, consumers looking for sources of protein consistently turned toward lower-priced meat and poultry options, such as chicken, which sported an average price of USD 3.05 (EUR 2.80) per pound on average in January; pork, which had an average per-pound price of USD 3.20 (EUR 3.00) in January; and beef, which reached USD 6.15 (EUR 5.70) per pound during the month, 210 Analytics Principal Anne-Marie Roerink told SeafoodSource.
“Because seafood is purchased far less often than its meat and poultry counterparts, it takes more effort, time, and investment to win lapsed seafood consumers and trips back,” Roerink said.
Inflation across all food and beverages grew less than 1 percent in January, according to the U.S. Bureau of Labor Statistics, but Roerink said U.S. shoppers are still feeling the cumulative impact of years of high inflation.
“As consumers are paying 35 percent to 40 percent more than they did pre-pandemic for most groceries, wages have not kept up, and consumers are in a constant balancing act,” she said.
As a result, year-over-year fresh seafood sales plummeted 6.8 percent by value in January to USD 455 million (EUR 422 million) while sales by volume dropped 3.4 percent. Frozen seafood sales also slid 6.9 percent by value to USD 516 million (EUR 479 million), but by volume, sales fell only 0.4 percent.
One category that grew in sales was ambient seafood, with sales increasing 1.3 percent to USD 221 million (EUR 205 million) alongside a volume increase of 1.8 percent.
As for specific species, fresh crab experienced the largest year-over-year price deflation in January, dropping 13.9 percent to USD 8.13 (EUR 7.59) per pound on average. Fresh catfish prices dropped 7.5 percent to USD 6.66 (EUR 6.21) per pound on average, while fresh salmon prices fell 1.4 percent to USD 11.12 (EUR 10.38) per pound on average.
“In a continued rollercoaster ride, salmon prices at retail declined in January. Salmon prices had started to level off in the fourth quarter, reflecting more favorable wholesale prices; plus, retailers ran more promotions,” Roerink said.
Despite the price decrease, fresh salmon sales value dropped 7.2 percent, while sales by volume fell 5.9 percent. Similarly, crab sales by value decreased 7.1 percent in January, but volumes spiked up 7.9 percent due to favorable retailer promotions.
Fresh shrimp sales also continued to decline, falling 9.5 percent by value and 6.3 percent by volume. Tilapia suffered the biggest sales value loss of the top 10 species in the fresh seafood category at retail, dipping 17.9 percent by value and 19.7 percent by volume.
Frozen shrimp prices fell 7.8 percent, but sales dropped 8.5 percent and volume fell 0.8 percent. Frozen salmon prices dropped 2.9 percent, but sales nonetheless declined 2.9 percent by value, while volume stayed steady compared to last year.
“Refrigerated and frozen salmon are definitely an interesting dynamic to watch. Dollars and pounds in the refrigerated category are down, but frozen is gearing up,” Roerink said. "We are seeing consumers more carefully manage food waste at home as a way to save so that could be an underlying factor. Additionally, frozen tends to have a more favorable price per pound and is often packaged by the piece, making it very convenient for smaller households.”
Despite the bleak start to the year for seafood at retail, inflation is slowing and the outlook for overall grocery sales has improved, according to the CNBC/National Retail Federation’s Retail Monitor. Total retail sales rose 2.34 percent unadjusted year over year in January, while gocery and beverage store sales shot up 4.06 percent for the month.
“January sales continued the strong performance of retail sales in December, which is impressive coming off a record holiday season,” NRF President and CEO Matthew Shay said in a press release. “More importantly, year-over-year growth was solid, showing consumers are still optimistic and willing to act on the spending power brought by growing employment and wages. This is a great start to the new year.”
Nevertheless, Roerink said she believes consumers will remain price-sensitive this year. However, a spike in overall grocery stores also presents opportunities to boost seafood sales.
“Visibility for the category via cross-merchandising displays, ready-to-cook offerings, and marketing creativity will help recover engagement,” she said.
Photo courtesy of QualityHD/Shutterstock
