- Experts are forecasting price fluctuations for the annual Thanksgiving feast, albeit at different levels. Mintec said the traditional Thanksgiving foods will be 9.2% pricier than they were last year. However, the American Farm Bureau Federation is predicting the average cost of this year’s Thanksgiving feast for 10 people will fall 4.3%, or $2.01, compared to 2019.
- Not only are prices in flux, but the amount individuals are spending on the holiday will look different in 2020. Nielsen predicted how shoppers celebrate often will be determined by their income levels. The market research firm found consumers earning less than $50,000 are planning smaller festivities or bypassing them altogether. Those earning more than $70,000 are planning to celebrate in a similar fashion but with more online shopping to get the food to the table.
- As Thanksgiving represents the largest grocery shopping holiday outside of Christmas week, sales during this period are crucial to retailers. With the pandemic disrupting supply chains and shopper habits, retailers and CPG manufacturers will need to pay close attention to what consumers are demanding and how they are connecting with them in order to capitalize on the season.
While the food consumers eat this year is unlikely to change much, how they shop and where they celebrate is likely to look very different. Annual turkey consumption has nearly doubled since 1970. Last year, 5.3 billion pounds of turkey were consumed in the U.S., an average of about 16 pounds per person. This year though, Nielsen said 70% of Americans are planning their festivities for gatherings of six people or fewer, meaning that over-the-top spreads and large turkeys may not be as in-demand as smaller, personalized portions.
At the same time party sizes are shrinking, the gap between shoppers' buying power is widening depending on their income levels. The result of this divide is that retailers and manufacturers will need to be conscious of how they go about catering to two sets of consumers this season.
Mintec data underscores the importance of recognizing this consumer divide as the firm found turkey prices rose 14.9% in October from a year ago due to a 1% decrease in turkey production as well as an increased demand for exports. The American Farm Bureau Federation, however, said turkey prices are at their lowest level since 2010. Turkeys will cost $19.39 for a 16-pound bird, or 7% less than last year, according to the trade association.
These disparate forecasts are reflective of the uncertainty of turkey farmers who are struggling to determine their processing plans due to politicians and health officials urging consumers to restrict their travel and scale back any large celebrations. Even with these recommendations, an opinion poll conducted by the farm group last year found turkey remains a staple for 95% of consumers, while half serve both turkey and ham at the holiday.
Even though some shoppers may cut back on their spending, Nielsen noted plenty of people plan to celebrate while maintaining or increasing how much they dole out for the holiday, most notably those living in rural areas, households with children, and younger shoppers belonging to the Generation Y and millennial generations. With less money being spent on entertainment and travel, they will turn to "small luxuries like premium meal delivery options, imported spirits and wines and large package formats meant for entertaining guests," Nielsen said.
Not only are prices going to dictate what festive foods end up on the holiday table for Thanksgiving, but it will also be defined by the availability of online and offline offerings, Nielsen noted. Shoppers with more disposable income are planning to spend more online this Thanksgiving than lower-income households. Nielsen noted retailers are going to have to support omnichannel demand as half of consumers have indicated they will be shopping online to some extent for seasonal foods.
This holiday season will be unlike any other and will require manufacturers and retailers alike to adjust their plans and expectations in order to meet the needs of consumers.