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Eggs' Impact Felt in January Dairy, Deli, Bakery Sales

Specialty Food Association

Eggs ruled the marketplace in the month of January 2023, impacting the price and purchase of many categories including baked goods, according to a recent webinar from the International Dairy Deli Bakery Association. The event was led by Jonna Parker, IRI fresh foods leader, and gave insight into how dairy, deli, and bakery departments are managing this year.

As a staple item, the impact from eggs' fall off was felt across the store. Parker shared that grocery items like bacon and biscuits also suffered from the fact that consumers were eating fewer eggs because these foods are typically paired with an egg breakfast. In addition to cost-prohibitive prices, some major retailers had stock shortages for weeks.

According to research from IDDBA, in partnership with data insights companies 210 Analytics and IRI, 96 percent of shoppers are concerned over the high price of groceries. Parker shared that this contributed to consumers looking for sales at the shelf, prompting 70 percent of Americans to seek money-saving measures like buying what’s on sale, cutting back on non-essentials, looking for coupons, or switching to store-brand items. This initiative also drove purchases of all sale items, even if the sale didn’t offer a deep discount.

The shifting landscape also necessitated a warning, “If you do what you’ve always done, don’t expect to get higher growth,” Parker said. She advised retailers to experiment with tactics to get more people into stores like offering discounts or opportunities for unique food occasions.

The dairy category’s 18.2 percent growth in dollar sales in the year ending January 29, 2023, compared to the year before, was largely due to eggs, which saw an 83.6 percent increase over the period. Parker also said that dairy prices were a large contributor to dairy's current 13.2 percent average rate of inflation compared to January 2022.

In the deli, meats saw a lower rate of inflation in January 2023 than in 2022, resulting in lower dollar sales. She expects at-home entertainment to help the deli category, as well as hot-and-ready and prepared foods, which both saw strong growth in January.

She considered deli-prepared foods to be “some of the fastest growing categories in the store,” because consumers perceive retail foodservice to be a better value than any other foodservice. This trend also applies to frozen pizzas, and salads, which provide an easy meal choice for shoppers.

In the bakery department, Parker noted that pastries, Danishes, and coffee cakes were noticeably down, especially compared to the same category at coffee shops. “The consumers [of this grocery category] tend to be older and more income constrained,” and are likely not buying because they don’t see flavors that resonate with them, she said. Donuts, however, saw gains, which she noted maintained both in the morning and evening.

Related: Despite Inflation, Food-at-Home Spending Up; Private Label Sales Up 11.3 Percent