Unit sales in grocery stores fell in August across a number of major categories such as produce, meat and seafood, based on Circana data compiled by 210 Analytics. Throughout the month, volume drops were evident, especially for fresh categories including meat, produce and bakery items.
During August, sales of produce fell by 6.7%, with fresh fruit down 6.1% and fresh vegetables down 4.2%. Anne-Marie Roerink, principal at 210 Analytics, attributed part of the slump to a recent cyclospora incident that discouraged shoppers from purchasing salad, leafy greens and similar products.
Roerink described August as “a very tough month for grocery retailing,” noting that the pattern of falling volumes has persisted throughout the year. Declines in many fresh-food categories create a notable obstacle for retailers, many of which depend on perishable products to attract customers and set themselves apart from rivals.
Volume sales for meat, seafood and bakery items also fell. Compared with the previous August, meat department sales were down 2.3%, with processed meat experiencing a sharper decline of 5.6%. Fresh seafood volumes slipped 1.9%, and bakery sales were 4.3% lower than a year earlier.
Shoppers seem to be moving their purchases toward longer-lasting options instead of fresh produce. In August, unit sales of frozen fruits and vegetables rose 5.6% year over year, and shelf-stable seafood volumes grew 5.7%. Inflation for food purchased for home consumption eased, registering a 2.7% rate in August.
Retailers such as Kroger are attempting to keep prices low for consumers and have increased promotional activity. Yet analysts note that the tough economic climate could require fresh managerial strategies. Certain advisers suggest that stores revamp category management to emphasize traffic generation and the creation of flagship products.
As stated by Matt Hamory and Marco Di Marino, partners and managing directors at AlixPartners, “Declining sales volumes aren’t a death knell for traditional grocers — unless they do nothing.” They argued that retailers must adjust to evolving market forces to stay competitive.
Hamory and Di Marino stressed the importance of proactive measures by conventional grocers facing falling sales volumes. They maintain that adapting to shifting market conditions enables retailers to stay competitive and uncover fresh growth possibilities.
