Grocery buyers are switching from dried beans and rice to premium meals as Covid circumstances enhance
Grocery shoppers swap canned goods and bags of dried beans for specialty chocolate and gourmet pasta sauce as coronavirus cases surge across the country, new research shows.
During the early months of the pandemic, in the spring, Americans filled their shopping carts with bulk grocery purchases and household staples, and grocers ran to replenish the stripped shelves. Over the past few weeks, however, consumers have become interested in premium purchases like high-end coffee, cheese, and frozen entrees instead of value brands or private label, according to research firm IRI.
According to IRI data, sales of premium and super-premium packaged goods at retailers grew 1.7% year over year in the 26 weeks ending October 4. The percentage might sound like a small one, but it’s a notable shift in the multi-billion dollar consumer goods industry, where competitors only compete for one-tenth of a percent.
This trend has continued over the past few weeks and is consistent for households of all income levels, said Krishnakumar Davey, president of strategic analysis at IRI.
Davey said people had turned to specialty as a way to break out of chore and try to make midweek dinners an experience of their own. Also, people spend their money in different ways as they cannot travel, have dinner with a group of friends, or go to the movies.
“People don’t have that many options anymore, so they have some money and eat well,” he said.
He said it was a reliable feeling to indulge in some luxury during a stressful time.
“Everyone wants to be pampered,” he said. “I know, on some tough days, I’ll be pampered with a nice cup of ice cream.”
Virtually every state across the country reports an increase in Covid-19 cases and hospital stays. The U.S. reported over 143,231 new cases on Wednesday, breaking a new record for a day, according to a CNBC analysis of data compiled by Johns Hopkins University. This puts the seven-day average at over 127,400, which corresponds to an increase of almost 35% compared to the previous week.
There are currently more than 65,300 people hospitalized with Covid-19 in the United States, more than any other time in the pandemic.
The significant increase in cases has resulted in dire decisions that date back to the toughest and deadliest weeks of the spring outbreak. In El Paso, freezer trucks were used as temporary morgues. In North Dakota, fears of staff shortages prompted the governor to change the rules to allow asymptomatic coronavirus-positive healthcare workers to continue working in Covid units.
The rising number of cases has raised concerns among some grocers that shoppers may panic like they did this spring. Some grocers have already taken steps to prevent stockpiling.
Kroger, the country’s largest supermarket operator, has restricted some household purchases online and in stores. As of last week, customers will only be able to purchase two specific items, including toilet paper, paper towels, disinfectant wipes and hand soap. Also at the Texan grocer HEB, customers cannot buy more than two specific items at a time, including disinfectant sprays and packs of chest pieces.
In a typical recession, according to research by IRI, Americans tend to forego less expensive brands like private label, buy smaller packages of an item, and treat themselves in smaller ways – like buying a box of chocolate truffles instead of a Hershey’s bar.
However, Davey said that recent shopping data only showed the third trend. He said households – even those with lower incomes – might feel more comfortable spending more on premium items, as they have cut spending in other categories as they mostly stay at home.
However, he said a pattern repeats itself from the early months of the pandemic: people are buying a little more paper towels and toilet paper.