Higher unemployment expected to take toll in coming weeks

Category Partners projects that grocery retail sales gains may soon be largely offset by smaller household budgets due to job losses resulting from measures to slow the coronavirus.

Nielsen reported that, for the week ending April 4, produce sales were up 16.2% compared to the same week in 2019, while meat saw a 36.8% jump, frozen a 32.8% increase and dairy a 26.4% gain. For deli and bakery, on the other hand, sales were down 7.2% and 13.6%, respectively.

The increased sales in fresh produce, while still notable, are significantly lower than the increases of previous weeks, indicating that consumers have mostly stopped loading up their kitchens and are rather just buying more overall because they are eating more meals at home, with the foodservice sector reduced to only carryout and delivery.

“In general, we expect retail perishable department sales to remain at an elevated baseline compared to the previous year,” Steve Lutz, senior vice president of insights and innovation, said in the release. “In the short term, this is a likely impact of the shift out of the foodservice sector into retail grocery. The reality is dine-out options for consumers will continue to be greatly reduced for the foreseeable future.“

Category Partners expects that, in the coming weeks, decreased spending due to furloughs and job losses will “largely offset continued large dollar gains seen in March in the grocery sector that resulted from the closure of foodservice dining options,” according to the release.

The firm noted that the timing of Easter makes it more difficult to compare weekly sales performance to 2019 and project future sales.

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