The goal is to offer shoppers a quality product at an affordable price. When it comes to shrimp, a top seller in supermarket seafood departments, it's a goal retailers are having trouble meeting this summer.
Tight shrimp supplies and higher prices are forcing many retailers to substitute their typical offerings with smaller-sized shrimp and sometimes other species of shrimp.
Some seafood executives interviewed by SN said they have held back on passing on their higher product
costs to customers, at least temporarily, and are thus cutting into profits.
One West Coast retailer said the situation has turned shrimp, once a star, into a "nonperforming item."
"We can't feature it. There's nothing we can do with it," said the buyer, who asked not to be named. "The prices are too high and we've had to lessen our margin on the product."
And unlike fish fillets, there are really no like items to substitute for shrimp, retailers said.
Darla Hood, seafood buyer at Brookshire Bros., Lufkin, Texas, said the company hasn't been able get all the kinds of shrimp it usually offers.
"There isn't the availability on the China white shrimp, which is what we normally carry. So we've had to change to a domestic shrimp, and the prices are higher."
On the China white, Brookshire had been paying about $3.45 per pound. "The last time we got them they were over $4 a pound," Hood said. But now they aren't even available, she said in a recent interview.
Brookshire is now buying domestic shrimp for more than $4 per pound for the 50- to 60-count size and retailing them for $5 per pound, said Hood, who couldn't offer a price comparison for this shrimp because the chain had not carried it before.
"We are still moving quite a bit of shrimp, even though the price has gone up," she said.
China's farm-raised shrimp production, which represents about 10% of world supply, plummeted last year. There were also reductions in crops from other producing countries, including Indonesia, the Philippines and Ecuador, according to an industry source.
One shrimp processor from the Northeast said the crop failures in other parts of the world have been a boon for sales of domestically raised shrimp.
Bill Shauvin, president of Shrimp World, New Orleans, said that over the past few years, the increase in the development of aquaculture around the world had served to lower shrimp prices, making it a more widely consumed item.
R.J. Harvey, meat buyer at Ingles Markets, Black Mountain, N.C., said in his marketing area shrimp prices have gone up sharply over the last two and a half months. So far, said Harvey, "it really hasn't affected our sales in any way because our retail prices haven't gone up. But I don't know how much longer I can hold the retails.
"If the cost continues to go up, we will have to raise prices; you can only absorb so much," he said. "So far, we haven't had any difficulty in obtaining product. It's just the matter of cost." At Riser Foods, Bedford Heights, Ohio, shrimp prices also have been going up.
"Prices [wholesale] are going up about 4% to 6%, depending on what it is," said Frank Fox, buyer at the 50-store chain. "Right now my supply is OK, but if this continues, supplies will be getting tighter and tighter."
Regarding prices, he said, "we have kind of bit the bullet. We have not taken retails all the way up as high as they should be."
The increases, he noted, have varied for different products. And he said despite the rise, the seafood departments continue to routinely feature two shellfish each week.
A Midwest retailer said he also is feeling the pinch. "The market is definitely tight," said the buyer, who asked not to be identified.
He said customers have "gotten a shock" from the price increases, which have hovered around 24%, and have been slower to buy because of the pricing. "They are not buying the quantities," he said.
Not all retailers have been hit hard by tight supplies. "We haven't had much problem at all," said Duane Savageau, director of meat operations at Leevers Supermarkets, Devils Lakes, N.D.
