I had a visit today with Desmond O'Rourke, president of Pullman, Wash.-based Belrose Inc. The renowned ag economist said that he will soon publish a free report on his web site called ""Great Recession of 2008 Effects on Consumer Spending."
Desmond has always been patient my questions about the state of the industry in the context of the broader economy. I think readers should watch for Desmond's insights on effects of the recession on consumer spending on fresh produce. From an advance crop of the report, this excerpt should whet your appetite for the complete report from Desmond:
Total food, food at home and food away from home all showed small increases in current dollars. However, in constant 2004 dollars, expenditure on all food fell by over 10 percent, while that on food away from home fell by more than twice as much as that for food at home, 14.7 percent versus 6.6 percent.
Among the 12 commodity categories shown in table 2, only alcoholic beverages and meats, poultry, fish and eggs had declines in current dollar expenditures (more than 10 percent in both cases). In contrast, only four categories showed increases in 2004 dollars. By far the biggest winner was processed vegetables with a 31 percent real increase in expenditure. It is believed that to save money, many consumers purchased processed vegetables for home use as a substitute for eating out.
The second largest increase in real expenditures was on fresh fruit, which grew by over 10 percent in 2004 dollars. A close third was the miscellaneous foods category with an increase in real expenditures of almost 10 percent. The two hardest hit categories were alcoholic beverages and the meats, poultry, fish and eggs category. It appears that strapped consumers cut back on protein foods and on alcoholic beverages.
Speaking of emerging from the recession, here is the latest quarterly report on Winn Dixie, follow this link. From the report:
During the 12 weeks ending September 21, 2011, our sales were impacted positively by inflation and sustainable merchandising and marketing initiatives and were impacted negatively by competitive activity and other general market factors. As a result, our net sales increased 3.1% for the 12 weeks ended September 21, 2011, as compared to the corresponding period in the prior fiscal year.
Our identical store sales increased 3.3% as compared to the same period in the prior fiscal year due primarily to a pass through of inflationary price increases in certain categories, and to increases in sales from our fuelperks!® Rewards program and computer generated ordering initiatives, and our remodeled stores. The increases were partially offset by competitive activity and other general market factors, and the continued mix shift from brand name pharmaceutical products to generics.