Retail sector’s US seafood sales plunge as inflation continues to bite

U.S. grocery stores’ fresh and frozen seafood sales continued to decline in May, primarily due to inflation in the category and across the store. However, shelf-stable seafood sales continued to rise, according to new data from IRI and 210 Analytics

Fresh seafood sales dropped 13.2 percent in value to USD 618 million (EUR 593 million), while sales by volume plunged 22 percent compared to May 2021. Frozen seafood sales fell 5.6 percent to USD 643 million (EUR 617 million) in the month, while sales by volume declined 14.6 percent.

The only seafood category that realized a sales gain was shelf-stable seafood, sales of which increased 7.8 percent to USD 251.4 million (EUR 241 million). Sales volumes of ambient seafood rose by 1 percent year-over-year in the month.

The average price for finfish jumped 20 percent year-over-year in May 2022 to USD 9.65 (EUR 9.26) per unit. Frozen seafood prices rose 10.8 percent to US 10.41 (EUR 10) per unit on average, while shelf-stable seafood prices rose 9.4 percent to USD 2.08 (EUR 2.00) per unit on average. Average shellfish prices rose 1 percent to USD 8.45 (EUR 8.11) per unit.

Besides inflation, a shortage of inventory and a subsequent lack of product assortments are also contributing to the sales drop, according to 210 Analytics Principal Anne-Marie Roerink. The average number of unique item codes sold per store dropped 4.6 percent for fresh finfish and 8.7 percent for fresh shellfish in May.

“Departments across the store are dealing with out-of-stocks and SKU reduction amid significant supply chain disruption and constraints,” Roerink said. “This means a smaller number of items need to work harder to achieve the same level of sales.”

Species with the largest sales declines in fresh seafood included crab (35.4 percent), lobster (30.8 percent), shrimp (19.3 percent), seafood cakes (14.8 percent), tilapia (14.3 percent), and seafood salads (12.8 percent).

In the United States, average prices are rising across the grocery store. Overall inflation reached 8.6 percent for the 12 months ending in May, the highest year-over-year increase since December 1981, according to the U.S. Bureau of Labor Statistics’ Consumer Price Index Summary, and food prices rose 10 percent in the past year, with the highest increase seen in food at home inflation, up 11.9 percent. Food away from home inflation increased 7.4 percent.

Consumer concern about inflation is “intensifying by the month,” Roerink said, and their attitudes toward grocery-store shopping are changing as a result. In May, 95 percent of U.S. consumers were concerned over rising prices, and 48 percent were very concerned, according to May’s IRI shopper survey. Ninety-two percent of U.S. consumers were concerned about higher gas prices, of whom 55 percent were extremely worried, compared to 23 percent of consumers who had extreme concern over COVID-19 in May 2022.

Thirty percent of American households are struggling to afford groceries they need, and 77 percent of U.S. grocery-shoppers chose differently when buying groceries in May, according to the survey.

In response to rising prices, 20 percent of U.S. consumers have begun stocking up on certain items out of fear their cost may rise in the future. Sixteen percent of those surveyed are bulk-buying because they are concerned the products may not be available in the future. That phenomenon is further pressuring in-stock conditions, according to Roerink.

Other popular money-saving measures included cutting back on non-essentials (36 percent), looking for coupons (28 percent), buying more private brands (24 percent) and buying fewer items (23 percent).

“Another tactic is making a list and sticking to it, according to 39 percent of shoppers, which tends to impact items with an impulse[-buying] nature,” she said.

Forty-five percent of consumers are looking for sales specials, though 55 percent said fewer of the items they want are on sale, according to the May IRI shopper survey. Of those surveyed, 42 percent said they felt that items they buy regularly are not being discounted as much, the survey found.

“This is compounding the inflationary pressure,” Roerink said. “Creative approaches such as shorter sales and cross-category promotions could be a much-needed answer.”

The survey found 19 percent of Americans shopped at value-focused retailers including dollar stores, ALDI, Lidl and others, in May.

“Switching stores is typically one of the very last measures consumers take, but this time around, it is already in the mix. This is a telltale sign of consumers’ level of concern and true pressure on income in the light of the high gasoline prices,” Roerink said.

The war in Ukraine, renewed COVID lockdowns in China, record inflation, labor shortages, and supply-chain challenges are likely to have a continued impact on food and food sales in the months to come, Roerink said.

However, with 90 percent of consumers reporting they will cook from scratch as much (74 percent) or more often (16 percent) as last year, seafood vendors can aim for that market as a means to boost sales, Roerink said. And the survey discovered 13 percent of U.S. consumers expect to do more in-person socializing with friends and family, which presents seafood sellers another opportunity to reach a willing market, Roerink said.

Photo courtesy of Colleen Michaels/Shutterstock