IRI Reports Data on Rising Grocery Demand Ahead of Thanksgiving

With supply chain shortages and inflated prices, this year’s holiday grocery shopping season may be notably different from years prior, according to IRI. In recent reports, the market research firm has examined grocery demand, out-of-stock rates, holiday promotions and shopping trends ahead of Thanksgiving this year.

As consumers resume more traditional holiday celebrations following last year’s more modest celebrations due to the pandemic, retailers and brands should anticipate a higher and earlier influx of demand as shoppers look to stock up on supplies for their family dinners, festive parties and seasonal baking. The four weeks leading up to Thanksgiving are worth approximately $2.2 billion, with the top 25 Thanksgiving-related grocery categories making up 81% of those sales, according to IRI.

“Consumers are planning for big holiday celebrations this year, so the weeks leading up to Thanksgiving are a tremendous opportunity for grocery retailers and CPG brands,” said Dr. Krishnakumar (“KK”) S. Davey, president of IRI Client Engagement in a press release.

While Thanksgiving-related shopping typically revs up roughly two weeks prior to the holiday, last year IRI found holiday shopping shifted a week earlier. This year, IRI urged both retailers and manufacturers to prepare for an early uptick in holiday grocery shopping with holiday bestsellers and promotions in place in order to “capitalize on heightened demand.”

The research firm found that several Thanksgiving-related categories currently already have elevated out-of-stock rates. For the week ending October 19, availability of products like whipped topping, gravy, frozen pie and pastry shells, refrigerated pies and bakery pies was down between 5% to 11% year-over-year, and down 1% to 9% just in the past two months. Gravy had the most notably decreasing in-stock rates, down 11% year-over-year and 9% over two months.

These out-of-stock rates differ slightly from region to region, IRI found. Across the top 25 Thanksgiving-related categories, in-stock rates were around 7% to 9% above the national average in retailers in Pennsylvania, Michigan and Florida, while those in Texas, Nebraska and Kansas saw in-stock rates 9% to 11% below the average. Because of this, manufacturers should “keep product allocation strategies nimble” in order to feed inventory to retailers and regions as needed, IRI said.

Due to lower supply and high demand, retailer promotions were down 6% across total edible CPG for the week ending October 24. For the week ending October 17, promotions were down between 1% to 9% in whipped toppings, gravy, frozen pie and pastry shells, refrigerated pies and bakery pies.

Overall prices across CPG are up 7% year-over-year in the past month, IRI found. Whipped toppings, gravy, frozen pie and pastry shells, refrigerated pies and bakery pies saw prices rise about 3.6% from a year ago, with frozen pie/pastry shells increasing the most at 6%. Low availability and higher prices may cause some shoppers to substitute their traditional Thanksgiving purchases, or to visit multiple stores to find their favorite products, IRI predicted.

With these factors in mind, brands should be tuned into the evolving grocery shopping environment to make the most of this unique holiday grocery shopping season, Davey noted.

“Brands must be strategic and leverage real-time data to understand demand granularly and optimize their promotions and supply chain operations to capture a slice of that opportunity and earn shoppers’ loyalty,” Davey said.

Looking ahead, IRI said it is continuing to track many Thanksgiving-related categories as the holiday grows closer and demand continues to increase. As of October 19, its data indicates an “availability risk” for cranberries and stuffing, while bottled cider and pie and pastry filling categories have also seen low stock levels and declining supply week-over-week.