After spring surge, Maine grocery prices largely reverse course - Press Herald

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Prices and supplies at Maine grocery stores appear to have stabilized after a spring of wild fluctuations caused by the coronavirus pandemic.

Still, intermittent product shortages caused by supply chain hiccups continue to be an issue, and for some items the choice of types and sizes remains limited.

A Portland Press Herald survey in May and June of prices on 40 items at Shaw’s and Hannaford supermarkets, Maine’s two major grocery chains, found dramatic price increases for some products, especially meats, and shortages of others, such as paper products. But a follow-up survey in August suggests many products have returned to their pre-pandemic price ranges, and supplies have become more reliable, as well.

That’s likely to continue, although buying patterns are likely to change as fall approaches, said Doug Baker, an analyst with FMI – The Food Industry Association.

“Overall, things continue to improve on a daily basis,” Baker said. A survey conducted in July by FMI found that 53 percent of shoppers reported some products were unavailable at their local groceries, an increase from 40 percent who reported that in March.

However, the FMI survey found that people were reporting fewer widespread shortages. In March, 46 percent of respondents said they were unable to find many of the products they were shopping for, but that fell to 18 percent in July. FMI’s survey also found that the number of shoppers who felt their local stores were fully stocked rose from 13 percent in March to 27 percent in July.

The decline in widespread shortages seemed to have a calming effect on prices. For instance, meat prices had jumped significantly from May to June at Maine grocery stores, in large part because of the pandemic, which hit some meat-packing businesses hard.

Many plants had to close temporarily and reconfigure after outbreaks of the coronavirus among employees, which caused some meat prices to jump as a result. In Maine, meat prices increased by as much as 50 percent from May to June.

However, prices on many meat products retreated – some significantly – in the latest Press Herald survey, conducted from Aug. 15 to Aug. 17, after packing houses got back to work, which led to more plentiful supplies.

For instance, pork chops at Hannaford rose from $3.29 a pound to $4.09 a pound from May to June, an increase of 24 percent. But the price dropped sharply in August, down to $1.49 a pound at mid-month, a decline of nearly 64 percent from June to August.

The price of boneless chicken breasts at Hannaford increased by nearly 48 percent from May to June, and then retreated by about 10 percent from June to August. Still, the per-pound price of $2.79 in mid-August remained 33 percent above mid-May’s price of $2.09.

A few products continued to experience wild price swings that defied any simple explanation. For example, the price of a head of organic cauliflower at Shaw’s jumped from $3.49 in May to $4.99 in August, after falling to $1.97 in June. But at Hannaford, the price dipped from $2.99 in May to $2.49 in August, after jumping to $3.99 a head in June.

Overall, food spending by the average U.S. family has increased, from $101 a week on groceries in February to $134 in mid-July, according to the FMI survey.

That’s due in part to rising prices, according to Baker, but it also reflects that families have to buy more groceries because parents are working from home, fewer families are dining out, and children spent the last three months of the 2019-2020 school year at home. Although some children may be going back to school this fall for at least part of the week, there’s no sign of a wholesale change in the new eating patterns, with more families continuing to eat more meals at home, Baker said.

Purchases may shift to more “just-in-case” buying, he said, with families stocking up on food that can be prepared quickly when everyone finds themselves at home. That means more items such as soup and frozen vegetables.

Grocers also will need to anticipate other changes in buyer behavior as the holidays approach, Baker said. For instance, instead of big Thanksgivings with family members and friends coming from around the country, the holiday this year probably will generate smaller gatherings. That might mean smaller turkeys and fewer side dishes needed, he said, so the normal pre-holiday run on grocery stores might be a little less hectic.

FMI’s survey found that the pandemic has changed shopping, eating and cooking habits. Two of five respondents reported cooking more, and nearly one-quarter said they were spending more time planning their meals. Nearly 40 percent said they were eating healthier and that they expect to cook more and dine out less often in the future.

Many of those surveyed said they expect such behavioral shifts to continue even after the pandemic fades.

Maine grocers have responded well to the changes forced by the pandemic, said Christine Cummings, executive director of the Maine Grocers and Food Producers Association.

“In general, the industry is recuperating” after the upheaval, particularly in March and April, Cummings said.

She said any persistent shortages of items are likely due to changes in scheduling – when products are delivered to manufacturers and processors, and then when they are shipped out to retailers. Cummings said there have been some shortages of ingredients that have caused production delays, and that some manufacturers and processors have had to shut down temporarily to make their procedures more resistant to the spread of coronavirus among workers.

Some packaging materials are in short supply, she said, particularly aluminum for canned items. That’s due largely to a change in how people were consuming some products such as beverages – instead of buying them at restaurants, where they are often served in a glass, consumers have been buying more cans to take those beverages home.

But overall, prices and supplies are plateauing, Cummings said, and grocers and growers are now eyeing harvest season warily and worrying about the changes it may bring. She said farmers in Maine are still worried about the availability and health of migrant farm workers who help bring in the harvest in early fall, although early signs are reassuring.

“It can change at the drop of a dime,” Cummings said.

Cummings said farmers hope that the business of supplying local food directly to Maine restaurants will continue. Most restaurants have stayed afloat by offering outdoor dining, but that will become problematic as the weather cools and fewer diners are interested in eating outside.

Many farmers also supply produce to local stores, and she said maintaining that business through the harvest also will be critical.

Cummings and Baker both said grocers had to innovate and change practices to adapt to the new business environment that came with the pandemic. That should serve them well if they have to handle another curve, Baker said.

Retailers put the new approaches into practice quickly, he said, opting to “pressure test” them by adopting them sooner than they might have otherwise.

Most retailers used the “fail fast and learn” method, Baker said, finding out quickly what worked and what didn’t, and making the changes needed.

That should help those retailers if the pandemic takes a different direction this fall and winter, he said.

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