Inflation eating away at US retail seafood sales

Retail seafood sales have dropped thus far in 2022, according to new data, with inflation playing a key role in the decline.

Fresh seafood prices surged an average of 10.9 percent in February 2022 versus last February, according to IRI and 210 Analytics. Fresh finfish saw the biggest average price increase, up 18.9 percent to reach USD 9.09 (EUR 8.24) per unit on average, while fresh shellfish had the lowest price hike across all seafood, at 2 percent per unit.

Frozen seafood prices ran up 15.9 percent to USD 9.98 (EUR 9.04) per unit on average, and shelf-stable seafood prices rose 13.3 percent to an average of USD 2.02 (EUR 1.83) per unit.

“The marketplace disruption caused by inflation, supply chain challenges, and COVID-19 variants is not showing signs of letting up any time soon,” 210 Analytics Principal Anne-Marie Roerink said. “Inflation is pressuring volume sales in departments in fresh, frozen, and center-store alike.”

Frozen seafood sales dropped 9.4 percent in February, but they still were “significantly higher than fresh,” Roerink said, at USD 576 million (EUR 522 million). Fresh seafood sales declined 12 percent to USD 521 million (EUR 472 million).

“Assortment and inventory seemed to be one of the culprits,” Roerink said. “Departments across the store are dealing with out-of-stocks and SKU reduction amid significant supply chain disruption and constraints.”

Shellfish assortment (average unique item codes sold per store) dropped 9.1 percent from last year’s levels, while the average number of finfish items declined 3.7 percent. Ambient seafood sales dropped to USD 200.3 million (EUR 182 million), down 4.8 percent year-over-year.

Price spikes were felt across the grocery store as the U.S. consumer price index increased 7.9 percent for the 12 months ending February 2022, the largest 12-month increase since July 1981, according to the Bureau of Labor Statistics. The average price per unit across all foods and beverages was up 10.3 percent in February 2022 versus 2021 and up 16.8 percent versus February 2020, according to IRI and 210 Analytics.

The February numbers – including a nearly 1 percent drop in overall grocery-store spending – show that inflation and rising gas prices are taking a toll on consumer spending, Dave Cesaro, retail and consumer behavior expert at marketing solutions company Vericast, told SeafoodSource.

“While consumers saved up during the pandemic, most have already earmarked their savings for paying down debt, a rainy-day fund, or other non-discretionary spend.”

Nearly 90 percent of Americans are concerned about inflation, according to a Momentive survey conducted for The New York Times.

The additional economic stressor of the Ukrainian conflict will likely further exacerbate supply-chain challenges pushing up the price of certain foods, Cesaro said

“As consumers’ bills increase and their confidence tumbles, spending will likely suffer, with a slowdown in personal consumption potentially offsetting the positive impacts of investment and jobs growth,” Cesaro said. “With this – plus elevated inflation expected to continue – grocers will need to adjust promotional planning if they want to capture their share of the consumers wallet.”

Cesaro said some grocery store chains and retail brands paused promotions for various reasons over the past two years, but many supermarkets are now returning to offering deals and coupons.

“[They are] increasingly essential to entice consumers to make purchases,” he said.

In fact, 68 percent of shoppers are making changes to their retail purchases, such as sales promotions, an IRI survey conducted in February found.

“However, unlike the typical path to saving that tends to start with buying what is on sale and considering private-brand options, virtually all means to save are already on the table,” Roerink said. "One of the very last considerations is typically buying less in the current environment.”

Forty-one percent of shoppers are looking for sales promotions to save money, while 39 percent look for bulk discounts or “buy one, get one free” offers, according to IRI. Still, 38 percent of those polled said they will save money by buying less.

Photo courtesy of Sorbis/Shutterstock