Even as shoppers are dealing with higher prices than in the past, 79% intend to mark Thanksgiving with the usual foods, setting the stage for a sizable sales surge during the next few weeks, according to data released Thursday by Circana.
The Thanksgiving basket accounted for three-quarters of the sales uplift retailers saw last year during the two weeks prior to Thanksgiving, and the research firm said in its first Thanksgiving Tracker said it expects that trend to continue in 2023. Nearly 80% of the Thanksgiving-driven increase in sales recorded during that stretch in 2022 took place during the week before the holiday and the seven-day period when it occurred, underscoring the importance of those weeks to the grocery industry.
Thanksgiving traditionally serves retailers a heaping sales boost compared with the revenue they generate during a typical week, making it the second-largest holiday of the year after Christmas, Circana noted in the tracker. The holiday drove a sales uplift of $2.8 billion during the week of and before Thanksgiving in 2022, up from $2 billion the year before and $1.3 billion in 2020, with inflation significantly affecting the trend, according to the report.
The cost of goods in the Thanksgiving meal basket is collectively up over 27% compared with 2019 — a level that makes the rapid decline in grocery inflation during the past year almost imperceptible to consumers, Circana said in a press release about the tracker.
The sense among consumers that they will be asked to dig deeper into their wallets to put food on their table this Thanksgiving points to a need for grocers to use promotions to demonstrate a commitment to helping people find ways to save, Circana said. Younger shoppers — especially those in Gen Z and younger millennials — are likely to be looking for deals, the research noted, adding that about half of Thanksgiving basket sales in 2022 involved a promotion.
“Manufacturers and retailers have the opportunity to help consumers, many of whom continue to buy on deal, and celebrate Thanksgiving as they always have by understanding their specific needs and targeting promotions effectively,” Joan Driggs, vice president of content and thought leadership for Circana, said in a statement.
Circana — formed last year through the merger of IRI and The NPD Group — also pointed out that while retailers control most Thanksgiving meal-related sales, 10% of sales connected to the meal comes from restaurants or foodservice.
Retailers have been taking steps to differentiate themselves as Thanksgiving approaches by advertising deep discounts on holiday-related items.
Aldi announced last month that it would cut prices for dozens of Thanksgiving foods by up to 50% starting Nov. 1 and keep the price reduction in place until the end of the year. Lidl plans to offer a complete Thanksgiving meal for up to 10 people for under $30, while Walmart and Target are also promoting grocery discounts related to the holiday.
“Demonstrate support for the host by promoting shortcuts that bring something new or alleviate work,” Circana said in the report.