USDA looks at retail, foodservice sales trends

There were significant swings in consumer spending on food during the COVID-19 pandemic, and a new U.S. Department of Agriculture study seeks to pinpoint trends related to those swings.

“In general, consumers increased their expenditures on food from grocery stores (and other retail food establishments) and decreased expenditures on food away from home,” the report said. 

In addition, many consumers stocked up on some groceries to avoid perceived shortages — and to reduce potential exposure to the virus by reducing their trips to the store, according to the report.

USDA said COVID-19 and measures put in place to limit the spread of the disease have significantly impacted food spending.

Beginning in March 2020, efforts to limit the spread of COVID-19 included stay-at-home orders that led to significant changes in the food-spending patterns of U.S. consumers, according to the USDA.

Following a sharp decline during March to April 2020 in spending on food away from home — restaurants, school cafeterias, sports venues, and other eating-out establishments — such purchases increased during May through December 2020.

This increase occurred as states began allowing restaurants to reopen and households began receiving stimulus checks from the Coronavirus Aid, Relief and Economic Security Act. However, the USDA said expenditures on food away from home establishments in December 2020 remained 18% below those in December 2019.

Supermarket bounce

The USDA report said analysis of data from the ERS Food Expenditure Series found that expenditures at grocery stores, supercenters, convenience stores and other retailers increased 25%, from $63 billion in February 2020 to $79 billion in March 2020, before declining to $73 billion in October 2020. 

Expenditures at restaurants, school cafeterias, sports venues and other eating-out establishments fell from $68 billion in February 2020 to $54 billion in March 2020 and $35 billion in April 2020, a drop of 48%, then rose to $59 billion in December 2020. 

Inflation-adjusted spending on food away from home in April 2020 was 51% lower than April 2019 — and still 21% lower in December 2020, compared with December 2019. Total inflation-adjusted expenditures on food were 8.8% lower in December 2020, compared with December 2019.

The USDA report said that its weekly retail food sales data indicates that early in the pandemic, retail food sales rose sharply — peaking at 57% higher sales for food at home during March 16-22, 2020, than the same week in 2019. 

After the COVID-19 pandemic reached a duration of more than one year, the USDA’s Weekly Retail Food Sales data series added a comparison to food sales during the same week two years earlier to provide a pre-pandemic baseline that accounts for seasonality. By April 25, the value of food retail sales was 18.5% above the same week in 2019.

By April 19-25, the USDA said the pandemic had continued for more than one year and the value of retail food sales was lower compared with the same week in 2020 overall and in every category except beverages and commercially prepared items. 

The decline, compared to one year earlier, illustrates the partial readjustment of food expenditures toward pre-pandemic levels, after lifting of stay-at-home orders.

Compared to the same week in 2019, the value of retail food sales during the week ending April 25, 2021, was higher in every food category — especially protein foods such as meats, eggs, and nuts.

Food prices during the pandemic

Food price changes during the pandemic reflect, in part, the impact of illnesses and safety measures on labor supply and productivity, according to the USDA report. 

“For example, most fresh-market vegetable growers rely on seasonal labor to produce a crop and place the crop into supply channels,” the report said. “COVID-19 illnesses reduced the supply of farm workers in producing regions.”

In addition, procedural changes to comply with recommended social distancing and sanitary protocols may have reduced productivity for some processing and packaging facilities. 

In the same way, meat processors faced labor shortages (due to illness) and implemented health protocols that may have hindered their ability to process cattle and hogs, although processors have recouped much of the lost slaughter capacity.

“Food price changes also reflect the shift in demand away from restaurants, school cafeterias, sports venues, and other eating-out establishments (food away from home),” the report said. “Demand has shifted to grocery stores, supercenters, convenience stores, and other retailers (food at home), and has led to changes in food demand due to higher unemployment.”

Retail food prices were higher in April 2021 than April 2020 for all food categories except eggs, the USDA report said.