In its recent Home For The Holidays report, IRI found that with daily cases of COVID-19 surging once again – and 42% of respondents expecting the health crisis to last past March 2020 – many consumers are tabling their holiday plans of gathering with extended family, which will have a noticeable impact on food sales.
Despite dampened holiday spirits (31% of respondents said they are not looking forward to the holidays this year), there is still ample opportunity for CPG manufacturers and grocery retailers to capture consumer attention and dollars, said IRI.
“Shoppers are navigating the ongoing COVID-19 pandemic with a variety of altered behaviors, creating opportunities for manufacturers and retailers that recognize and address these new behaviors quickly,” said Joan Driggs, vice president of content and thought leadership at IRI.
“CPG companies that satisfy these changing needs gain the opportunity to attract new shoppers as well as win back shoppers that might have migrated to other brands and/or channels earlier in the pandemic.”
Downsized Thanksgiving: Table for five
For Thanksgiving, 29% of consumers will host or attend a meal with extended family who does not live with them, down from 48% last year, according to IRI’s new research. Approximately one-third (34%) of consumers will prepare a meal just for themselves or their household this year, up from 27% last year. The median number of people sitting at the Thanksgiving dinner table this year will be five, down from eight in 2019, according to IRI.
Even as consumers hosts smaller holiday gatherings – if at all – this year, according to IRI, turkey sales are expected to be strong over the next several weeks as consumers switch over to smaller whole birds and cuts, says IRI.
According to IRI, turkey and roasting meats have seen a surge in sales during the pandemic with the most robust growth coming from younger and lower-income shoppers.
National turkey sales are up 19.6% with 250,000 more pounds sold compared to last year, according to IRI, and whole bird turkey sales have been especially strong, said IRI, with sales up 28% to $21m compared to last year.
Between April and September, shoppers bought turkey nearly 4x more often than in the same period in 2019, said IRI.
While whole turkey sales are registering strong growth this season, IRI still anticipates some changes to consumers' shopping carts. IRI notes how just over 20% of consumers are planning to spend less this year due to smaller gatherings, with some planning to buy a smaller turkey, and 15% saying they will not purchase a whole turkey.
"Retailers should also promote chicken and other cuts of meat for smaller holiday meals," said IRI.
December holidays: ‘Strictly a family affair’
Much like Thanksgiving, the number of consumers hosting meals for extended family during the month of December will drop from 48% in 2019 to 32% this year, while those preparing a special celebration just for themselves or their households will increase to 32% from 27% last year, said IRI.
Gift-giving outside of the household will also decrease from 39% last year to 31% this year, notes IRI, which found that 25% of respondents will spend less on gifts this year while 14% plan to spend more.
Opportunity for manufacturers and retailers to step up
With reduced gatherings and a continued move away from foodservice, restaurants, and dining – which tends to spike in Q4 every calendar year – food consumption at home will see another spike during the 2020 holiday season providing manufacturers and retailers with additional opportunities, said IRI.
“The typical spike in restaurant visits will not materialize this year,” said IRI, noting that while restaurant visits have rebounded from their lowest point in April, the amount of people dining out last month was approximately 50% of October 2019 levels.
“Manufacturers and retailers that act quickly on these trends have the opportunity to generate enhanced consumer loyalty, win new shoppers away from competitors, and win back shoppers who might have migrated to competitors earlier in the pandemic,” said IRI, recommending that manufacturers lean in and find creative ways to participate in the holiday shopping season.
“They can promote holiday essentials to assist those shopping on a budget while also making available premium products for those interested in splurging. Optimizing online resources will enable shoppers to find new recipes and cooking tips, offer entertainment ideas, and suggest effective budgeting practices. Creative cross-promotions with other holiday items, such as complementary food categories, wine pairings, cooking utensils, or tableware, will also engender shopper loyalty.”