More than ever, consumers are planning for Thanksgiving by shopping for key items. Early shopping drove a 4% increase in sales across the entire grocery category for the week ending Oct. 31, 2021, according to the latest data on Thanksgiving-related grocery trends from IRI, a market research and data analytics firm.
The holiday season is approaching, and widespread supply chain challenges continue to affect industries and the economy. IRI said it is monitoring various holiday-related items to gauge their availability, demand, pricing, and promotion for Thanksgiving and Christmas, the two holidays driving the most significant sales increases for retailers in the United States.
“The latest data also shows that shopping habits vary widely among consumers of different demographics, primarily across age groups and household income levels. The distinct behavior patterns of each shopper demographic create important insights for manufacturers and retailers as they optimize their advertising and promotion strategies in the final weeks leading up to Thanksgiving,” said Dr. Krishnakumar (“KK”) S. Davey, president of client engagement for IRI.
The items tracked include the top 25 Thanksgiving-related grocery categories, which account for 81% of the $2.2 billion in grocery sales uplift typically seen in the four weeks leading up to the holiday. The important insights gathered from this initiative enable retailers and manufacturers to make better decisions about merchandising, promotional activity, and other variables to drive growth and profitability and deliver for shoppers during the holiday season.
Key findings based on data for the week ending Oct. 31, 2021, include:
- More shoppers than ever are shopping early.
Sales uplift of Thanksgiving items in the three weeks ending Oct. 31 was 63%, compared to a historical uplift of 45% in years prior. This trend accelerated during the week ending Oct. 31, 2021, with sales lift 86% compared to a historical average of 54%, primarily driven by sales of wet broth/stock, turkeys, pie pastry filling, and stuffing. Following widespread media reporting on supply chain challenges, 34% of consumers reported stocking up on certain items because they are concerned that the products might not be available the next time they shop. By closely monitoring these uplifts, manufacturers and retailers can more easily meet the needs of consumers with the right products, prices, and promotions.
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- Shopping behaviors differ significantly across income level and age demographics.
Lower-income shoppers wait to buy meat and sides items until closer to Thanksgiving, while middle- and high-income households are more likely to shop those categories ahead of the holiday week. However, data shows that households at all income levels buy pies, baking products and beverages in the weeks leading up to the holiday. Manufacturers and retailers without supply constraints who are targeting price-sensitive consumers should focus promotional efforts on pies, baking products and beverages as early as three weeks before Thanksgiving but wait to discount meat and sides until the week before or the week of the holiday.
Older households are typically more likely to shop for their Thanksgiving supplies early, while younger households are more likely to wait to shop until the week of Thanksgiving, and are also more open to new traditions and brand-switching. Manufacturers and retailers should launch holiday digital campaigns when holiday shopping is most relevant to their target demographic, and focus promotions targeting younger households on products that attract shoppers to a new category.
- Meat and Pies categories have the most out-of-stock risk.
Despite the continued acceleration of demand for certain Thanksgiving items ahead of the holiday week, in-stock levels for the week ending Oct. 31 were largely consistent with levels reported the week prior, with the exception of meat, which was down 3 percentage points. Meat and pies continued to be the only categories that show lower in-stock percentages compared to the year-ago period, down 13 and 3 percentage points, respectively.
For the 2021 season, retailers and manufacturers should prepare for an earlier wave of Thanksgiving shoppers and ensure they have key products stocked and a promotion strategy in place to capitalize on heightened demand.
Manufacturers should keep product allocation strategies nimble to accommodate in-stock level variation across regions. The in-stock rates of the top 25 Thanksgiving-related categories vary significantly across the country.
In markets in Pennsylvania, Michigan, and Florida, in-stock rates of the tracked Thanksgiving items are generally 7 to 9 percentage points above the national average. In markets in Texas, Nebraska, and Kansas, supply shortages have contributed to in-stock rates between 9 and 11 percentage points below the national average. Manufacturers should closely monitor their in-stock levels by retailer and region and leverage historical and real-time purchase data to anticipate shortages and allocate products across markets to accommodate shoppers’ shifting holiday demand patterns.
Shoppers should prepare to make substitutions, given supply chain risks in critical categories. Product availability in the whipped toppings, liquid gravy, bakery pies, and frozen pie/pastry shells categories were between 5 and 13 percentage points lower this week than the same time last year. Still, availability has been improving in these categories compared to a week ago.
Conversely, bottled cider and pie/pastry filling categories have in-stock levels on par with this week last year, but their stock levels are low, and supply is declining compared to the previous week. Holiday shoppers should plan to shop early for those essential ingredients experiencing significant out-of-stock levels or prepare to make creative substitutions.