First Quarter Food Store Sales Up 5.1%, Restaurants Up Over 9%

During March, the nation’s food store checkouts tallied $52.9 billion in sales, up 5.5% from a year earlier on the heels of a 7.1% increase in February that included the extra “Leap Day” this year, reported The Food Institute. Overall, this brought first quarter 2012 sales at all food stores 5.1% above a year ago – topping the 3.9% food-at-home inflation rate for the first quarter and that 120 basis point difference was the largest since the second quarter of 2011.

During March, the nation’s food store checkouts tallied $52.9 billion in sales, up 5.5% from a year earlier on the heels of a 7.1% increase in February that included the extra “Leap Day” this year, reported The Food Institute. Overall, this brought first quarter 2012 sales at all food stores 5.1% above a year ago – topping the 3.9% food-at-home inflation rate for the first quarter and that 120 basis point difference was the largest since the second quarter of 2011.

Grocery stores - 95% of which are supermarkets based on U.S. Bureau of Census data - did not fare quite as well, increasing just 4.8% during the three-month period to $137.6 billion but still above retail food inflation. Supervalu, Eden Prarie, Minnesota which reported a 5.0% decline in sales during the three months ended Feb 25, 2012, attributed the poor performance to “continued volatility in the economy and financial markets due to uncertainties related to energy costs, availability of credit, difficulties in the banking and financial sectors, the decline in the housing market, the low level of consumer confidence and high unemployment rates that affect consumer spending or buying habits."

The nation’s eating & drinking places saw sales rise 8.9% in March, bringing first quarter 2012 sales 9.2% above a year earlier to $126.5 billion. Full-service restaurants have outpaced that growth, and The Food Institute estimates that first quarter sales for this segment were 12.3% higher than a year earlier at $57.9 billion, with March sales estimated to be up 12.4%.  Budget conscious consumers apparently like to splurge occasionally by dining at a white tablecloth restaurant.

Limited-service sales for the quarter however were up only an estimated 6.6%. That does not mean that all of the fast food chains are not keeping up however. McDonald’s Corp., which falls into this category, reported its comparable sales at U.S. units were up 8.9% from a year earlier, outpacing the industry as a whole.  And Chipotle, the nation’s second largest Mexican fast-food chain meanwhile, saw its first quarter 2012 comparable unit sales rise 12.7% from some 1,225 units.

With retail food price inflation continuing to decline from month to month, 2012 stands to be a positive year for food retailers and restaurant operators who were hesitant to pass along prices increases from early 2009 and continued through late 2010, but have been successful doing so lately and may find it easier to continue to do so if those increases are easier for consumers to stomach than last year’s nearly 5%.

www.foodinstitute.com