Perimeter Spotlight: Sales Pain and Gain on the Perimeter

At a 30,000-foot level, the broad collection of fresh departments collectively referred to as the perimeter appear to have fared well during the first seven months of the year. As a whole, sales increased 10.4%, to $84.1 billion, in the combined perimeter departments of produce, meat, deli/prepared foods, bakery, floral, deli meat, seafood and deli cheese.

However, on closer inspection, it’s apparent that the pandemic caused uneven gain and pain throughout the perimeter, along with an uneven sales cadence among the growers and decliners. For example, three of the eight categories tracked (deli/prepared foods, bakery, floral) saw sales decline for the measured period, with deli/prepared foods the top decliner, having experienced a 16.9% drop. At one point, as food retailers were forced to curtail deli and prepared food operations, sales declined 40.3% during the four weeks ended April 19.

Business has rebounded since then, or at least declined less sharply, down 32.4%, 24.4% and 19.6% in the successive four-week periods following the big drop in April.

Conversely, the stars of the perimeter were the meat and seafood departments, posting gains of 23.2% and 22.7%, respectively, for the entire measured period. Upon closer inspection, meat sales spiked 41.4% in the four weeks ended March 22, the height of pantry loading, and remained elevated during subsequent four-week periods in April and May, advancing 32.9% and 42.9%, respectively, causing some retailers to restrict sales in certain protein categories, due to the combination of strong demand and supply disruptions caused by COVID-19 outbreaks at processing facilities.

At the time that meat sales were beginning to moderate, seafood sales took off. After growing relatively slowly during the first four months of the year, seafood sales shot up 45.7% during the four weeks ended May 17, and in the four weeks ended July 12, they grew nearly 50%.

The powerhouse of the perimeter is the produce department, accounting for nearly 45% of perimeter sales of $84.1 billion. The produce department saw sales advance 10.7%, to $37.6 billion, with a key driver of the gain being shoppers’ desire to eat healthier as a means to boost immune-system strength. Produce sales spiked 18% during March and pulled back slightly in subsequent months, but maintained a double-digit growth rate through the measured period ended July 12.