Dive Brief:
- Thanksgiving dinner is likely to be more expensive this year thanks to inflation and supply chain issues, according to the American Farm Bureau Federation’s annual price survey. The total cost will be $53.31 for a traditional feast for 10 people, a 14% increase from last year’s average of $46.90. The group cautioned that its shoppers were likely performing this survey before stores instituted pre-holiday discounts, so consumers may be able to fill their tables for less.
- Turkey saw the steepest increase, with prices up an average of 24%, according to the Farm Bureau survey. However, the weeks after the data was collected saw discounts in turkey prices, according to USDA figures. Other meal components with large price increases include frozen pie crusts, which cost 20% more than last year; dinner rolls, which are about 15% more; and veggie trays, which saw a 12% price increase.
- Inflation has contributed to a rise in prices on grocery store shelves. The Consumer Price Index rose at a 6.2% annual rate in October, which was the highest increase in 30 years — and larger than economists expected.
Dive Insight:
Considering that food prices have been rising everywhere and manufacturers have announced price increases, the fact that Thanksgiving dinner will be a bit more expensive should come as no surprise.
Consumers appear to be ready for a hit to their wallets. According to a survey done last week by market research firm Numerator, 98% of consumers said they expected price increases this Thanksgiving. More than seven out of 10 respondents said they thought turkey would see the largest price hike. But only 14% of respondents said they are going to try a gobbler-less Thanksgiving dinner as a result. Numerator found a quarter of people are cutting out alcohol, while more than half will seek out more promotions and coupons.
Data from IRI focusing on turkey suggests the best prices on birds are available as Thanksgiving gets closer. There is adequate supply leading up to the holiday, but a record-setting number of people bought them the week ending Nov. 7 — potentially taking a page from the early-pandemic playbook in March 2020, when consumers afraid of shortages cleaned out store shelves. During the first week in November, IRI found 50.5 million pounds of whole bird turkey were sold — 114% more than the same week last year.
Aside from turkey, other items on the traditional Thanksgiving table are feeling the pinch of inflation. According to a Mintec report breaking down the cost of Thanksgiving dinner, potatoes saw a poor growing year caused by drought and high temperatures, which caused prices to spike.
At the same time, the cost of bread is up because of skyrocketing wheat prices. Increased global demand for the commodity, coupled with harvesting setbacks and dry conditions in key growing areas, have led wheat prices to rise 38.3% on a year over year basis, Mintec analysts found.
While consumers may be paying more for their Turkey Day this year, it’s unlikely these prices are going to let up in the months to come. Mintec noted there are still pandemic-related logistical challenges in processing, packaging and manufacturing food products. These issues, along with weather-related problems in many growing areas, mean there are many areas along the supply chain where food costs are increasing.
Until some of the logistical challenges clear up, a reprieve may not be in sight. Several food companies are already warning retailers of further price increases in 2022, meaning consumers may continue to feel the pinch.
