DALLAS — Food inflation is affecting sales of fresh meat, poultry and dairy at grocery retail, according to a new study.
Symphony RetailAI, a provider of integrated AI-powered marketing, merchandising and supply chain solutions, also found that despite declines in those categories, shoppers are still prioritizing fresh produce purchases.
The study discovered that inflationary price increases are much more prevalent in fresh than any other category in grocery. Across all departments, shoppers are spending more for their groceries, but a significantly larger portion of price increases for fresh items are due to inflation, not customer choice.
Most of shoppers’ additional spend across categories is being driven by product mix. Customers are buying more expensive products because of a change the retailer has made to the assortment or because the customer has chosen to buy a more premium product.
At the store level, only 26% of the additional consumer spend is being driven by increases in the base price. However, when analyzing fresh separately, Symphony RetailAI found that close to half of the average increase in price (45%) is driven by inflation, which is significantly more than observed.
Other findings of the study include:
• The fresh category is a frequency driver. In looking at monthly purchase frequency, fresh (24.8%) is purchased about as often as ambient products (22.5%), but twice as often as frozen (11.1%).
• Fresh is experiencing higher levels of customer growth than other grocery categories. Fresh categories saw 8% growth in shopper households over the course of one year, compared to 7% for ambient, shelf-stable products, 6% for beverages, and 5% growth for the frozen category.
• For every 10 items in a shopper’s basket, four are fresh products. Fresh is important to today’s grocery shopper, as evidenced by the fact that shoppers on average have seven times more fresh items in their basket (43%) than items from the frozen category (6%). By comparison, the ambient or shelf-stable category makes up 29% of shoppers’ baskets.