Higher prices and lingering concerns about mercury are putting pressure on supermarket seafood sales this year
In an economy where many consumers are struggling to tread water, supermarket seafood sales may be one of the latest casualties as shoppers reel in their food budgets.
The Perishables Group reported that fresh seafood sales in supermarkets have struggled slightly in the past 13 weeks, declining by 3.6% compared to the same period in 2007.
According to the report, which covers supermarket seafood performance through June 1, eight of the top 10 fresh seafood categories have declined in sales over the past 13 weeks. Overall retail prices on fresh seafood are up 1.4%, according to Steve Lutz, executive vice president of the Perishables Group.
“While overall retail prices on fresh seafood have generally not increased at the rate of other fresh foods categories, it is possible the sales declines are a result of consumers opting for lower-cost products for center plate meals,” Lutz said.
The data represents only fresh seafood sold through conventional supermarkets. Frozen seafood was not included. Sales averages from approximately 13,000 supermarkets are included in the totals.
Other industry observers attribute the decline in sales to increased prices due to rising fuel costs and an increase in imported seafood.
“I haven't looked at prices, but certainly, everything else is increasing,” said Howard Johnson, president and seafood industry and marketing consultant, H.M. Johnson & Associates.
“And since we're importing so much — 80% of our seafood is imported now — you've got transportation costs, the weak dollar; I think those two things clearly would drive prices higher, not across the board, but in some areas.”
While David Lockwood, consumer insights director for research consultancy Mintel in Chicago, agreed that consumers are looking for cheaper meals, he said he believes the seafood industry has other problems that might be contributing to the category's recent ebb.
“I would put pricing down around fourth or fifth of important things to look at in the seafood market,” Lockwood said.
“The market has been up and down over the years, and the reason why it's been up and down is the safety issue. People just don't know which fish is safe and which isn't safe. I really think that that's the No. 1 problem that's keeping the market from growing faster.”
Lockwood said he believes the fresh seafood market could benefit from better education and communication with consumers on issues ranging from mercury levels and health benefits to preparation information.
Mintel surveyed people who said they eat fish in their households, and nearly half agreed that they tend to eat seafood while dining out, but they almost never prepare it at home.
“There's no reason for that to be the case,” Lockwood said, adding that this is why preparation instructions might help recapture some of the lost sales in fresh seafood.
“Again, it's no safer if you eat it in a restaurant than at home. It's just striking there's no other food where people say, yeah, I eat it in the restaurant but I don't eat it at home. That's just quite unusual, so that's another big point.”
Johnson agreed that mercury is still an issue with consumers.
“Mercury is probably a little more top of mind when it comes to tuna — more so than anything else — and that's probably affecting canned tuna sales,” he said. “But some of the other food safety things, they kind of come and go, because we get bombarded with so many messages now,” he said. “The mercury is more ongoing, because it is something that certain consumers need to be aware of.”
However, Michelle Barry, president of Tinderbox, a part of the Bellevue, Wash.-based Hartman Group, disagreed that safety concerns are driving shoppers away from seafood departments, noting that the species whose sales have been hit hardest recently generally aren't associated with high mercury levels, while some species that are associated with higher mercury levels have experienced sales growth.
“Given the pattern of increases and decreases, we would hesitate to blame mercury concerns,” she said. “Their data don't fully suggest this is what's going on. Shrimp, salmon, crab and catfish reportedly do not have excessively high levels of mercury, but have all suffered over the 13 weeks shown. Halibut, snapper and perch, on the other hand, normally have higher levels of mercury than these, and have all enjoyed at least some growth during the same period.”
Shrimp was down 3.6% in the 13 weeks ending June 1, 2008, and its average retail price went up 1.4% from a year ago. Crab sales went down 16.2% in the same period, with the average retail price increasing 1.6%. Lobster sales were down 9.7%, with the average retail price increasing 3.2%.
Lockwood attributes the decline in sales of crab, shrimp and lobster to the generally higher price per pound in comparison to other fish such as tilapia and salmon.
“Salmon can sometimes be higher, but in general, crab, lobster and shrimp are going to be the higher-end seafood,” Lockwood said.
“I can definitely see some people passing that by because of the price, and they're doing that throughout the store — the higher-priced cuts of steaks will get passed up for the cheaper cuts as well.”