Inflation continued to dampen U.S. retail demand in May 2023, even as fresh and frozen seafood prices dropped.
Inflation rose 4 percent in May year-over-year on an unadjusted basis, according to the U.S. Bureau of Labor Statistics. Overall food prices were up 6.7 percent during the period, with food away-from-home inflation up 8.3 percent and food-at-home inflation up 5.8 percent.
Fresh seafood sales increased 0.6 percent by value for the 13 weeks ending 20 May, while unit sales fell 3.2 percent, according to Nielsen data analyzed by Idaho Falls, Idaho, U.S.A.-based Category Partners.
Overall seafood unit sales were down 8.4 percent for the 52 weeks ending 20 May, indicating depressed demand due to higher prices, Category Partners Senior Vice President of Marketing Eric Le Blanc told SeafoodSource.
Frozen seafood prices decreased 5.9 percent in May, and fresh seafood prices dropped 2.2 percent compared to May 2022, according to Circana data analyzed by 210 Analytics. That contributed to frozen seafood sales declining 3.8 percent to USD 505.6 million (EUR 470 million) and fresh sales falling 2.2 percent to USD 501.4 million (EUR 466 million).
Shelf-stable seafood prices rose 5.6 percent in May, pushing sales down 1.5 percent to USD 200 million (EUR 186 million).
There was a particularly acute drop in fresh shellfish prices, while fresh finfish rose slightly year-over-year in May, 210 Analytics Principal Anne-Marie Roerink said.
Circana data shows that fresh salmon prices rose slightly by 1.3 percent in May, resulting in a 1.2 percent drop in sales, while frozen salmon sales climbed 7 percent. In Q1 2023, despite higher prices, salmon sales nevertheless rose 2.1 percent by value, according to Nielsen, though unit sales dropped 2.5 percent and have fallen 4.5 percent year-over-year.
“As with the whole department, there seems to have been some unit price decrease in the most recent period, which is helping to arrest, or at least slow, the loss of unit sales,” Le Blanc said.
Frozen crab sales rose 41.9 percent in May, while fresh crab sales jumped up 15.4 percent, according to Circana.
“[Crab and lobster prices] continued to be substantially more favorable to the consumer in the longer and shorter time periods,” Roerink said.
However, for the 13 weeks ending 20 May, crab sales were down 5.3 percent by value and 1.5 percent by volume, according to Nielsen – still a significant improvement compared May 2022, when crab sales in dollar terms plummeted 16 percent and unit sales dropped 15 percent, Le Blanc said.
Fresh shrimp sales plunged 10.4 percent by value in May and frozen shrimp sales decreased 7.6 percent, according to Circana. Overall shrimp sales rose 8 percent by value and 3.7 percent by volume in Q1 2023, according to Nielsen. For the 52 weeks ending in mid-May, shrimp sales were up 6.4 percent in value but down 1.6 percent by volume. Le Blanc said shrimp has seen some price softening lately, but demand for it has held up well over time and through price increases.
“This is one of the healthiest subcategories we've looked at in seafood,” he said.
Dragging seafood sales are the result of seafood’s premium status and of more U.S. consumers changing what they buy to save money, Roerink said. In the fall of 2022, about half of consumers were applying money-saving measures when buying groceries, but 93 percent of shoppers said in May they are applying money-saving measures, according to Circana’s May survey of grocery shoppers.
“This means seafood has experienced pressure on household engagement and trips, which translates into sales pressure,” she said, noting the number of items purchased in a U.S. consumer’s average trip to the supermarket continues to decrease nationwide.
Overall, 83 percent of shoppers believe life has gotten more expensive, and while 39 percent of U.S. consumers are focusing on pulling back their restaurant spending, 93 percent of consumers are applying one or more money-saving measures when buying groceries, Roerink said.
Shoppers are purchasing more pork and chicken instead of beef, and sales of canned meat and seafood have risen, according to Costco Chief Financial Officer Richard Galanti told Yahoo Finance. The long period of high inflation has caused consumers to switch to buying more nonperishable items to stretch their budgets, he said. Additionally, shoppers have shifted from buying whole-muscle cuts to grinds of beef.
“This is where things are a bit harder for seafood,” Roerink said. “People are very familiar with all the ways to save on meat and poultry, but because their seafood repertoire is much smaller and purchases are much more infrequent, it is harder for shoppers to navigate money-saving steps in seafood.”
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