The United Fresh Produce Association has released its FreshFacts on Retail report for the first quarter of 2019, and its webinar on the findings included conversation around how shoppers responded to different price changes, many that were driven by supply issues.
Strawberries saw dollar sales increase less than 1% and unit sales drop 9.5% as availability challenges translated to higher prices.
The average unit price in Q1 was $3.54, up about 11% from 2018.
“When we look at overall sales, three-quarters of strawberry sales occurred in that first quarter occurred when they were sold on promotion, so this is definitely an instance where some pricing sensitivity is evident,” Matt Lally, associate director of Nielsen Fresh, said on the webinar. “It could also be an instance where shoppers are being trained that they will hold off on their purchases until it’s on promotion, so sometimes too much of a promotion can actually cause a decrease in our overall profitability.”
Iceberg lettuce, on the other hand, saw big growth despite higher prices. For the lettuce category as a whole, dollar sales were up 8.6% despite a 3.4% drop in volume and a 12.5% increase in price.
Iceberg prices were even higher, offsetting the slow recovery of romaine in the wake of a string of recent outbreaks tied to it.
“When I looked specifically at iceberg, there were two things that really stood out to me,” Lally said. “The first was the tremendous increase in price, a 23% increase in price, and yet that didn’t seem to deter shoppers. So this is almost the opposite instance, where there is less price sensitivity; whether it’s a $1.60 or $1.89 for a head of iceberg lettuce, shoppers were still willing to make that purchase, and that drove a lot of that dollar growth.
“And then simultaneously, (there was) a sharp reduction in promotional volume,” Lally said. “So last year, in the first quarter, it was about 45% of all iceberg lettuce sales occurred with type of sale, and that promotional volume was only about 25% for this quarter.”
Pears, while they did not make the top 10 list for fruit, were another driver of growth.
“In this instance a pretty signifcant reduction in pricing drove a lot of that growth, so again, a real opportunity to understand that balance between just what a change in price can determine in terms of that overall bottom line with sales,” Lally said.
Jeff Cady, director of produce for Tops Friendly Markets, who was also participating in the webinar, also noted the uptick in pear sales.
“It’s been a better pear year, I can tell you from my perspective,” Cady said. “Pears has been on fire.”
Cady also mentioned cabbage as an item that enjoyed growth in the first quarter.
“Cabbage had a very good quarter before St. Patrick’s Day and everything, however, it was probably one of the highest cabbage markets that I’ve ever seen in my life, and I think most of us had, just because of growing conditions,” Cady said.
For more information about how different commodities fared in the first quarter, you can find the FreshFacts on Retail report at the United Fresh website.
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