Americans flooded the supermarket when the pandemic hit in early 2020, creating well-documented spot shortages of staples. But they also patronized restaurants at a steady rate in the early weeks, according to a USDA analysis of sales data, suggesting families at first were stocking up for an uncertain future rather than actually eating at home.
“Changes were substantial, essentially amounting to a 50- to 60-percent increase” in retail food sales during the week in mid-March 2020 when President Trump declared a national emergency and in the following week, said Economic Research Service report. “In contrast, a similarly dramatic year-over-year decrease in the number of food service transactions did not appear until mid-April,” although transactions were trending downward in the interim.
“Increases in food retail sales (coupled with delayed decreases in food service transactions) suggest most of the increases in food retail sales during the early weeks were due to consumers stocking up on FAH in the face of an uncertain future and restrictions and restrictions on economic activity, as opposed to consumers purchasing less FAFH alone,” said the ERS Covid-19 working paper. (FAH refers to “food at home,” or groceries, and FAFH refers to “food away from home,” which includes restaurant, carry-out, cafeteria and snack food.)
After the initial shock, weekly grocery store sales declined but remained high for the first year of the pandemic, up 10.7 percent when adjusted for inflation from the same period before the pandemic. During the second year of the pandemic, retail food sales were 7-percent higher than before the pandemic and the number of food-service transactions remained 12-percent lower.
In an illustration of the abrupt changes, the USDA report said grocery sales, adjusted for inflation, rose 56.4 percent in the week ending March 15, 2020 — the emergency declaration was on March 13 — while the number of food service transactions declined 8.5 percent. “The latter number continued to fall, bottoming out at -46.5 percent the week ending April 12, 2020, while year-over-year changes in real food retail sales fell to 18.4 percent,” said the USDA.
There were disproportionately large changes in purchases of many grocery items, such as alcohol, fats and oils, grains, sugars and sweeteners, and vegetables, wrote the six ERS economists.
“However, the meat, eggs and nuts category was the largest driver of the sales increase,” they wrote. The category had the largest year-over-year increase in sales and also the largest increase in share of the food dollar, growing to 17.8 cents from the pre-pandemic 17 cents. At the same time, meat prices were surging. “This shift indicated a substantial increase in real expenditures sustained through the first year of the pandemic, despite supply chain challenges affecting meat products.”
The composition of retail food sales largely returned to its pre-pandemic makeup in the second year of the pandemic, said the report.
For the report, USDA analysts examined weekly grocery sales data drawn from retail-based scanners and aggregated at the state and national level. They used privately compiled data on the number of food service establishment sales and material collected for the monthly Consumer Price Index report.
The report, “Covid-19 working paper: National food retail sales during the Covid-19 pandemic,” is available here.