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The August 2024 Consumer Sentiment Index by the University of Michigan reflects continued concern. At 67.9 points, Americans’ current-day sentiment remained far below the neutral rating of 100. Consumers continue to point to the impact of high prices and report substantial uncertainty in the trajectory of the economy, per the August findings.

Consumers are still focused on price and promotions, but at $5.23, the average price per unit in the frozen department was 0.1% less in August than a year ago. (Still, that’s 21% higher than in August 2021.)

USDA’s Economic Research Service recently released its 2023 Food Security numbers. Last year, 13.5% of households were food insecure at least some time during the year. Per the ERS, this is a statistically significant increase from 12.8% in 2022.

This concern has resulted in fewer restaurant visits and a greater share of food dollars flowing into retail in recent months. When shopping for groceries, consumers also apply a wide range of money-saving measures.

While consumers are focused on price and promotions, it is rarely the only consideration going into the purchase. There are no linear consumer purchase patterns, which makes the marketplace complex — but also ripe with opportunities for growth when addressing consumers’ daily puzzle between budget, time, health and other considerations.

Value-added and deli-prepared sales are strengthening, reflecting a continued need for convenient solutions, while younger shoppers in particular continue to drive the importance of sustainable choices. Limiting food waste, a frozen food advantage, has become a very popular financial measure in addition to having environmental and social implications.

August also marked back-to-school for states across the nation, which signals the start of big changes for many departments around the store. Lunchbox convenience and time-saving solutions for breakfast and dinner become of greater importance.

INFLATION INSIGHTS

In August 2024 (the five weeks ending Sept. 1), price per unit across all foods and beverages in the Circana MULO+ universe stood at $4.23, an increase of 1.6% versus August 2023. This is higher than the 1.5% year-over-year price increase seen in July as well as the first quarter average of +1.2%. Prices in the fresh perimeter were up 2.6% year-over-year in August versus 1.1% in the center of the store. The average price of $4.23 is 35.1% higher than the pre-pandemic 2019 average of $3.13.

The average price per unit across all items in the frozen food department was flat in August. A few items experienced deflation, including fruits and vegetables and meals. Others, such as meat/poultry, experienced above-average increases and rising inflation, but most categories reflect August prices coming down in comparison to the full-year view.

A DEEP DIVE INTO FROZEN SALES

In the new MULO+ universe, frozen food sales for the 52 weeks ending Sept. 1 totaled $84.9 billion, whereas the month of August generated $8.3 billion. Meals and desserts were the largest sellers during the five-week period. More and more categories are growing unit sales in the shorter term, including processed meat, which saw robust gains. In the 52-week view, four categories grew units year-on-year, including desserts, fruit and vegetables, processed meat and baked goods.

ASSORTMENTS LEVEL OFF

Frozen food assortment is 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?

• Out with back-to-school, in with pumpkin Halloween and fall sets are in-store, and with the change in weather and daily routines often comes a change in consumption patterns as well.
• Consumers continue to make more trips to the grocery store than they have in The key to sales success is capitalizing on these additional visits by optimizing trips to the aisle and the number of items bought each trip.
• While the decline in the number of items per trip has had a profound impact on grocery sales for the past two years, holidays remain an important reason to include more premium items and treats — underscoring the importance of suggestive selling in-store, online and utilizing social media.
• All consumer confidence, restaurant and grocery indicators point to a more home-centric environment for the time being, compounded by ongoing higher restaurant inflation and a cooling job market.

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