October sales gain but produce volume dips - The Packer

October sales gain but produce volume dips

12/06/2011 05:39:00 PM
Tom Karst

Continuing a yearlong trend, U.S. retail fresh produce sales in October increased in sales but fell in volume.

Fresh produce sales were up 3.3% for the four weeks ending Oct. 29 while volume was 2.9% lower compared with a year ago, according to statistics from the West Dundee,Ill.-based Perishables Group.

Of the top 10 produce categories, only apples and grapes showed volume increases in October compared with a year ago, said Steve Lutz, executive vice president of the Perishables Group.

The produce department numbers showed reasonable gains in retail dollars compared with year-ago numbers, Lutz said. However, overall sales gains are being driven by increases in average retail prices at the expense of volume.

Produce managers will want to see volume nudge higher, he said.

“You can’t continue to have gains in dollars at the expense of volume,” Lutz said. “Eventually the loss of volume erodes your ability to make it up in price increases,” he said Dec. 5.

LutzAverage retail prices rose 4.4% for fresh produce in the four weeks ending Oct. 29. Showing an even bigger spike, promotional pricing for fresh produce — the price of produce when advertised to shoppers — rose 8.6% in the four-week period ending Oct. 29 compared with year-ago numbers.

Lutz said that means when supermarkets go on promotion, consumers are seeing smaller discounts than they have been used to seeing in the past. Potatoes and bananas, Lutz said, each showed 20% increases in promoted prices compared with a year ago.

“That’s a trend we have seen since really the beginning of the year, with promotion prices being substantially higher than they were a year ago,” he said.

Retailers may be trying to gain margin by not discounting as deeply. Some retailers may be promoting less aggressively because they want lower everyday prices, he said.

For example, the average non-promoted retail price for apples was up 2.4% in the four-week period ending Oct. 29, while the average promoted price was up 11.7%.

End-of-year numbers for fresh produce will likely reflect October’s results, Lutz said.

“It has kind of been the theme of 2011 — higher prices and negative impacts on volume,” he said. “Most of the volume being lost is at lower margin promoted pricing as opposed to everyday pricing, so it may not hurt quite as bad from a retail standpoint.”

Through September, retail sales numbers showed organic produce volume was up 2.4% despite a moderate increase in average prices.

Prev 1 2 3 Next All

Comments (0) Leave a comment 

e-Mail (required)


characters left

Feedback Form
Leads to Insight