How High Out-of-Stock Rates Could Impact the Holidays

While the nation’s entire supply chain continues to face historic challenges, IRI has identified five Thanksgiving-related categories that could cause a major upset this Thanksgiving.

IRI, a global innovative solutions and services provider for consumer, retail and media companies, has released new data on the availability of a basket of 25 Thanksgiving-related grocery categories across stores nationally. This latest data shows high out-of-stock rates for five Thanksgiving-related categories that will—at the very least—mean fewer promotional deals for expectant shoppers this year.

For the week ending Oct. 19, 2021, IRI finds that five Thanksgiving-related categories have elevated and worsening out-of-stock rates. Product availability of whipped toppings; liquid gravy; frozen pie/pastry shells; refrigerated pies; and bakery pies was between 5% and 11% lower this week than the same time last year, and between 1% and 9% lower than the recent two-month average. Among these challenged categories, liquid gravy had the lowest in-stock rates this week, down 11% from the year-ago period and 9% compared to the last two-months average availability.

Promotional and pricing activity already reflects shortages, says IRI. As a result of lower supply, retailers are running between 1% and 9% fewer promotions in these five categories compared to last year. On average, prices in these five categories have risen about 3.6% over this time last year, with frozen pie/pastry shells showing the highest pricing increase of 6% over the year-ago period.

“As the holiday season approaches and widespread supply chain challenges continue to impact industries across the economy, IRI is tracking a basket of items for their availability, demand, price and promotion for Halloween, Thanksgiving and Christmas,” said Dr. Krishnakumar S. Davey, president of IRI client engagement, in a release. “Halloween season is shaping up nicely with the category growing in double digits, [but] we are recording significant out-of-stock rates on several Thanksgiving-related grocery categories at this time.

“IRI’s real-time data provides critical insights for retailers and manufacturers managing an increasingly complex and volatile supply chain environment, particularly ahead of high-demand events,” continued Davey. By tracking availability of critical holiday-related products and categories, IRI is enabling our retailer and manufacturing clients to make better decisions on merchandising, promotional activity, and other variables to drive their growth and profitability, and deliver for shoppers.”

And not only should shoppers expect lower levels of promotion, but an increased need for substitutions as well, adds IRI. While some of these categories typically see high levels of promotion as the holidays approach, retailers will have less incentive to promote this year given the high demand and low in-stock rates, the company notes. As a result of availability, lesser anticipated promotional levels and continuing inflation, shoppers may be forced to substitute items across key Thanksgiving categories, such as replacing fresh with frozen desserts. Shoppers may also try multiple stores to find their favorite products.

 Additional shortages of traditional Thanksgiving ingredients may also occur. As the Thanksgiving holiday approaches and demand begins to spike, IRI data foreshadows availability risk for items including cranberries and stuffing.

The data for IRI’s holiday availability predictions comes from IRI CPG Demand, Supply, Price Inflation and Promotion Indices, which are calculated from daily point-of-sale and e-commerce transaction data reported from major chains’ sales transactions.