Deflated Grocery Store Real Sales Slip In April As Nonfood Prices Decline

After two months of positive results once retail food prices changes are considered, grocery stores slipped a bit in April, with the Food Institute Report estimating that deflated or so-called Real Sales fell a small percentage under the same month a year ago.

After two months of positive results once retail food prices changes are considered, grocery stores slipped a bit in April, with the Food Institute Report estimating that deflated or so-called Real Sales fell a small percentage under the same month a year ago. This was on the heels of a significant revised 3.1% gain in real sales during March.  During the month, retail food prices as reflected by the government Consumer price Index for food-at-home, were flat – exactly unchanged from April of 2009. Prices for other products sold at supermarkets meanwhile, continued to fall under prior year levels. For example, housekeeping supply prices were down seven tenths of a percent from 2009, and personal care products were down 1.3%.

During the first four months of 2010, real sales were just marginally above 2009 levels notes The Food Institute but may be poised to recover. Food prices are expected to rise in the remainder of 2010 but only at historically moderate levels at this point. Thus, higher prices should not deter consumers from restocking their pantries after raiding them for much of 2009 due to the recessionary economy.  Meanwhile, efforts by many grocery retailers to assist the budget conscious consumers should continue to pay off. Those efforts include an increased focus on private label products, an increased focus on value prices in all aisles, and more focused promotions via frequent shopper cards by many larger chains.

Eating & drinking places meanwhile, saw their greatest gain in over 18 months as far as real sales are concerned notes the Food Institute. During April, price change adjusted sales at foodservice operators jumped 3.3% even as prices were up 1.1% from a year earlier as reported in the Consumer Price Index for food away-from-home. 

This information jives with a report last week from NPD Group that noted while first quarter 2010 traffic at restaurants was down from a year ago; it had started to show signs of improvement towards the end of the quarter. The Food Institute saw real sales at foodservice in crease about 1.4% in March after two months of lower or basically flat sales. April, however, appears to be the breakout month for restaurants on the heels of 12 consecutive monthly declines through January 2010 and slightly improved conditions through March.

To find out more about the food institute go to www.foodinstitute.com. And mark you calendars for June 29 when The Food Institute will present a webinar on The Future of Food Retailing.