Consumers take a pass on fresh seafood purchasing

Fresh seafood prices are on the decline, but the ramifications of the cost-cutting are going against conventional wisdom.

While the average price of fresh selections fell 1.8% to $9.52 a pound for the 52 weeks ending 9/8/24, volume sales declined 2.2% to 886.8 million, reports Circana, a Chicago-based market research firm. Within the sector, the price of finfish and shellfish fell 0.6% and 5.0%, respectively, to $10.43 and $8.30 a pound. Finfish has a volume decline of 1.5% to 521.3 million, and shellfish a 3.3% decrease to 320.2 million.

The decrease in fresh volume sales contrasts with other seafood categories in which lower prices are leading to sales increases.

The average price of frozen seafood decreased 5.3% to $7.30 a pound, with volume sales of 1.11 billion, a 0.6% gain. Frozen shellfish prices declined 6.5% to $8.12, with volume sales of 561.6 million, up 0.2%. Frozen finfish prices dropped 4.1% to $6.44 with volumes of 487.1 million, a 1.8% gain.

Pricing in the shelf stable sector is also becoming more attractive, with an average price of $5.18 a pound, a 0.5% decline, and volume sales up 1.1% to 635.4 million. Shelf-stable salmon had a 7.5% price decrease to $5.41 and a volume increase of 7.4% to 53.2 million.

Tuna, the most popular shelf-stable seafood selection, went against the trend with a 0.5% price increase to $4.87, but still had a 0.1% volume increase to 486.6 million.

Despite the fresh seafood price reductions, many shoppers are still hesitant to purchase items as they can pay less for other fresh proteins, including diverse types of chicken and beef, said Melissa Rodriguez, Circana vice president of perimeter.

A regular pack of boneless/skinless chicken breast had an average advertised price of $2.91 a pound at major supermarket outlets from August 30 to September 5, reports the U.S. Department of Agriculture (USDA). Value packs were $2.50 a pound.

Chicken thighs had average per-pound prices for regular and value packs of $1.21 and $1.49, respectively, and whole wings were $3.35 a pound.

The average advertised per pound price for beef selections during the period includes $4.23 for 80% to 89% lean grinds; $6.10 for ground sirloin; $7.40 for top round steak; and $8.53 for skirt steak, the USDA reports.

“Because seafood is still exponentially higher than a pound of chicken breast or ground beef, many consumers are not welcoming fresh seafood back to their baskets,” Rodriguez said. “Shoppers are still having to make tradeoffs.”

The steep cost of maintaining a seafood department counter is contributing to the higher prices of fresh seafood versus frozen, she said. That includes the need to consistently sanitize cases while keeping the counter looking fresh and clean; restocking displays with ice; dealing with waste; and having knowledgeable staffers who can serve shoppers while answering questions and making meal recommendations.

“More management is needed to operate the seafood counter in contrast to just having workers who take products out of boxes and place the items in the frozen cases,” Rodriguez said. “There is an extra expense that comes with making a store a seafood destination.”

She said that while consumers have low expectations about the appearance of frozen aisles, “they expect a different experience when they go into the specialty areas of the store and that comes with a cost.”

To help spur fresh seafood activity, retailers should focus on differentiating their stores’ seafood departments from those of competitors, which can involve offering unique species along with value-added products, such as pre-marinated and pre-seasoned selections, Rodriguez said. Despite the typically higher price of value-added seafood, multitudes of consumers are still willing to pay more for convenience, she said.

“Shoppers backed off from value-added selections in 2020 and 2021 as they were home more and had time to explore foods and learn how to cook new things,” Rodriguez said. “But more consumers now are seeking meals that they can prepare in under thirty minutes.”

It is vital, however, that operators teach shoppers how to create unique dishes, as “that is always going to be a barrier to the purchase of more exotic seafood species,” she said.

Also impacting fresh seafood activity is the move by merchandisers to reduce promotions as prices decline, Rodriguez said. Retailers, however, can still spotlight the lower pricing via in-store signage and through stores’ smartphone apps, she said.

“Retailers should make their customers aware that they are offering better pricing, and that will drive traffic to the seafood counter,” Rodriguez said, adding that operators can get “creative” in their merchandising, such as by placing signage in the front of stores that lead customers to the fresh seafood case.