While consumers are reportedly scaling back on holiday dinners overall, a recent survey by the American Farm Bureau Federation indicates that Americans will dole out more this year for a traditional Thanksgiving Dinner.
AFBF reported Thursday (Nov. 19) that the average price of traditional Thanksgiving Dinner will cost around $5.11 per person or a little more than $50 for a party of 10. The cost this year increased 70 cents from the last year’s average price of $49.41.
The big ticket item, a 16-pound turkey, cost $23.04 this year, which was roughly $1.44 per pound. This year turkey prices rose 9 cents per pound compared to the $1.39 per pound price in 2014.
“Retail prices seem to have stabilized quite a bit for turkey, which is the centerpiece of the meal in our market basket,” AFBF Deputy Chief Economist John Anderson said. “There were some production disruptions earlier this year due to the highly pathogenic Avian influenza outbreak in the Midwest.”
He said turkey production is down slightly this year.
“Our survey shows a modest increase in turkey prices compared to last year. But we’re now starting to see retailers feature turkeys aggressively for the holiday. According to USDA retail price reports, featured prices fell sharply just last week and were actually lower than last year,” he added.
The AFBF survey shopping list includes turkey, bread stuffing, sweet potatoes, rolls with butter, peas, cranberries, a relish tray of carrots and celery, pumpkin pie with whipped cream, and beverages of coffee and milk, all in quantities sufficient to serve a family of 10 with plenty of leftovers.
Anderson said pumpkin and grain-based products such as rolls, pie crust and bread stuffing each were priced higher this year over last.
“Despite concerns earlier this fall about pumpkin production due to wet weather, the supply of canned product will be adequate for this holiday season,” Anderson said.
Anderson said dairy items were priced lower this year compared to last. He said milk, butter, whipping cream each cost modestly less than a year ago. Egg prices have increased for most of this year, but prices have come down in recent weeks. Canned and fresh vegetables such as carrots, celery, peas and cranberries are roughly the same prices as last year.
This marks the 30th year that AFBF has completed the holiday meal survey. The $50.11 cost is the highest in the past three decades. The holiday meal cost has risen 15.27% over the past five years. The holiday meal price is 36.24% most costly than it was 2005, a decade earlier.
Mass retailers like Wal-Mart, Sam’s Club and Target have each touted their holiday food and beverage selections, and with good reason. Food sales are more than half of the revenue generated at Wal-Mart Stores and an area of growth for Target.
Steve Bratspies, chief merchandising officer at Walmart U.S., has said Wal-Mart will no doubt attract holiday shoppers searching for gifts, but he reminded the media the retailer is also a favorite for food staples priced at everyday low prices.
A recent survey by IRI found that frugality is on this year’s holiday menu. IRI researchers said their survey indicates consumer budgets are still somewhat strained because of stagnant wages and rising health care and education costs.
“We’re taking a deep dive into those four crucial weeks following Thanksgiving that span Hanukkah and Christmas to determine how merry the holidays will be for CPG retailers this year,” says Susan Viamari, vice president of thought leadership at IRI. “Unfortunately, it’s shaping up to be a rather lackluster season. Still, marketers must keep in mind that two-thirds of U.S. consumers say they want to prepare the best meals possible. The trick to capturing maximum share of wallet this season will be to target consumers carefully and get on the all-important shopping list.”
IRI’s Shopper Sentiment Index provides insight into how the economy is impacting consumers and changing how they approach grocery shopping. The index baseline is 100. The index gives perspective in terms of price sensitivity, brand loyalty and changes in spending required to maintain desired lifestyles.
IRI said in the recent quarter ending Sept. 30, the index dropped to 119, versus 123 in the second quarter and a reading of 121 in the year-ago period. Viamari said simplicity is the new sophistication for this holiday season as consumers are demonstrating a conservative mindset.
“While they still want to make a splash with holiday celebrations, 32% expect to spend less this year than they did in 2014. Overall, this adds up to relatively flat sales for the upcoming CPG holiday season,” the report notes.
Experts said to make the most of opportunities this season, it’s important for marketers to reach consumers before they head out the door, because pre-planning and deal seeking will play a major role in their money-saving efforts. Following is a breakdown of consumer behavior prior to holiday meal shopping.
• 62% will prepare a list at home before heading out to the store
• 54% will clip coupons from newspapers/circulars
• 34% will rely on private label solutions
• 29% will redeem credit card/store points for product savings
Lower fuel costs are often cited as giving the U.S. consumer more disposable income. A recent report from Financial Times suggests that around 10% of savings from lower pump prices are spent on groceries, with about 20% used at restaurants. However, the report also noted that fuel costs are 5% of a consumer’s budget, which means other factors likely have greater influence on consumer spending – or lack thereof.