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US: IDDBA Publishes COVID-19 Impact Report

The COVID-19 pandemic fundamentally changed the way consumers are spending their food dollars. Research by The International Deli Dairy Bakery Association (IDDBA) analyzes the impact of the pandemic on purchasing decisions. Very quickly, spending moved from a majority of dollars going to foodservice, to it being spent in food retailing. Due to out-of-stocks, experimentation and economic pressure, consumers have been ping-ponging between fresh, frozen and center store, and between brands, sizes, familiar and new items. A renewed emphasis on home-cooking and healthful immunity collided with less time for impulse inspiration in-store and the most heightened economic concerns in over a decade. While the extreme spikes of the early weeks have given away to a steady week-to-week performance, the sales gains for dollars and volume remain well above 2019 levels for most departments.

210 Analytics analyzed the IRI weekly sales findings, made possible by IDDBA, to help understand how bakery sales are developing throughout the pandemic. The net effect of the positive and negative trends resulted in a total store sales increase of 9.9% versus year-ago during the week ending August 16 — virtually unchanged from the week prior. Food sales were stronger than non-food sales, with a gain of 12.8% for center-store edibles (including frozen) and +10.2% for the fresh perimeter. Dollar sales for non-UPC deli-prepared and fresh bakery remained down.

“While still highly elevated, the data shows a gradual softening of the more extreme lockdown trends in the grocery market,” said Jeremy Johnson, VP of Education for IDDBA. “We seem to be settling into a steady pattern as consumers continue to prepare many more meals at home. That includes the very different back-to-school landscape that will significantly impact trend lines for many categories.”

The three areas within baked goods saw sales gains trending closer together once more as packaged items are seeing the slow week-to-week erosion and fresh, non-UPC bakery remained about -6% below year-ago levels.

Prepackaged Baked Goods Aisle

Total packaged baked goods increased 9.0% for weekly sales of USD479m, which was down from USD482m the week prior. Because the 2019 baseline for the week ending August 16 is lower, the year-over-year increases came out to be a bit higher. Most areas within bakery remained stable compared with the gains generated the week prior, with the exception of English muffins that saw a big decline from +18.4% the week prior to +7.3%.

Cookies and Crackers

Aisle cookies and crackers in UPC/fixed-weight packages saw some recovery from their lowest gain since the onset of the pandemic last week. “America continues to bake, with baking aisle ingredients still up 21.9% over last year’s levels,” said Parker. Total weekly sales were USD305m.

In-Store Bakery

While still not caught up with 2019 sales levels, the in-store bakery did have five items posting positive growth the week of August 16 versus 2019. Cakes, cookies, breakfast items, bread and croissants all had slight or moderate gains over the same week year ago. That pushed total random weight baked goods sales to just 5.9% below its year-ago levels. Donuts and rolls, often merchandised as a bulk item in the fresh bakery, continued to be down in double digits with both impulse as well as wariness of consumers’ being able to touch bulk product limited sales.

What’s Next?

As restaurants remain under limited capacity restrictions in most states, it is likely that food retail patterns will start to stabilize around the current levels. While the number of new virus cases appears to be stabilizing, if not decreasing, consumer concern over the virus and economic pressure remain high. While unemployment and other financial pressure often favor food retailing versus foodservice spending, it is likely consumers will start to emphasize other money-saving measures, including promotions, private brands, cheaper kinds as well as saving by buying less.

Once consumer concern over in-store trips diminishes, it is likely we will see more cross-store comparison of promotions again as well. Back-to-school season is in full swing, though it looks very different from prior years in most states. This will continue to impact year-over-year trend lines, particularly for bakery items affected by breakfast and lunch occasions with many more children at home participating in virtual education. Between the continued social distancing mandates, highly elevated consumer concern about the virus, economic pressure and the impact of virtual schooling, retail sales are likely to hold well above 2019 levels for the foreseeable future.

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