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Hurricane Helene caused significant stocking up on grocery basics in Southeastern states during the last week of September. The pattern repeated itself during the week ending Oct. 6 in advance of Hurricane Milton. (See the “What’s Next?” section at the end of the report for more information on the hurricanes’ impact on grocery purchases.) The storms caused significant agricultural and infrastructure damage that could impact the supply chain in the shorter and longer term. Our thoughts go out to all those affected by the historic flooding and unimaginable losses.

Some consumers also stocked up leading up to strikes in the Gulf and Eastern ports, which handle over half of U.S. import and export volumes, causing disrupted grocery buying patterns across the nation in late September.

CONSUMER SENTIMENT UP SLIGHTLY

Frozen food prices edged up just 0.4% in September (versus the same period a year ago), but average price per unit across all food and beverage categories jumped 2.1%. A spike in egg prices is partly to blame.

The Consumer Sentiment Index by the University of Michigan stood at 70.1 points in September, representing a slight increase from the August 2024 reading of 67.9. The university links the moderate improvement to a slight increase in the expectations for the economy, though consumers’ assessment of current conditions remained unchanged, at 69.0 points. Historically, consumer sentiment tracks along with GDP growth/ decline, is strongly related to unemployment rates, sensitive to inflation rates, influenced by interest rates, and closely tied to real personal income growth/decline. This explains the stubbornly low consumer sentiment since early 2024.

Low sentiment has resulted in fewer restaurant visits and a greater share of food dollars moving to retail. Most departments achieved real growth with year-over-year increases in units and/or volume.

While consumers are focused on price and promotions, they are rarely the only considerations going into a purchase. There are no linear consumer purchase patterns, which makes the marketplace complex but also ripe with opportunities for growth.

INFLATION INSIGHTS

In September 2024 (the four weeks ending Sept. 29), price per unit across all foods and beverages in the Circana MULO+ universe stood at $4.25, an increase of 2.1% over September 2023. The third quarter of 2024 averaged an increase of 1.8% across all food and beverages (versus the Q3 2023). This is up over the second quarter (+1.5%) with the inflation rate having shown slightly higher increases over the past few months. Perishable prices were up 3.3% year-over-year in September versus 1.5% in the center of the store. Egg prices spiked due to continued HPAI outbreaks, which have impacted 101 million birds in the U.S. since 2022. The average price of $4.25 is 35.8% higher than the 2019, pre-pandemic average of $3.13.

The average price per unit across all items in the frozen food department was up 0.4% in September. A few items experienced deflation, including fruits and vegetables, seafood and meals. Others, such as meat/poultry and processed meat and poultry, experienced above-average and accelerating inflation.

A DEEP-DIVE INTO FROZEN SALES

In the new MULO+ universe, frozen food sales for the year ended Sept. 29 totaled $85.1 billion, whereas the four September weeks generated $6.4 billion. Meals and desserts were the largest sellers in September. More and more categories are growing unit sales in the shorter-term view, including robust gains for processed meat. In the 52-week view, five categories grew units year-on-year, including desserts, fruit and vegetables, processed meat, seafood and baked goods.

Frozen food assortments are starting to level off at around 1,200 items per store per week. In comparison, the 2019 average was 1,325 items. The decrease could point to a lasting impact of the SKU rationalization seen during the early pandemic years.

WHAT’S NEXT?

Grocery patterns in late September and early October were heavily impacted by consumers stocking up in advance of the Eastern seaboard port strikes and Hurricanes Helene and Milton. To illustrate, during the week in ad- vance of Hurricane Milton making landfall in Florida, total food and beverage sales at retail increased 16.8% in the Southeast, with substantial spikes in beverages, meat and shelf-stable items. Frozen food sales increased 8.6% in the Southeast that week.

—Anne-Marie Roerink is founder and principal of San Antonio-based market research firm 210 Analytics. She can be reached at [email protected].