Significant Increase in Grocery Prices in the US
Relatively Affordable Chicken Gains Popularity
As grocery prices have risen sharply in the United States, consumers are increasingly seeking relatively affordable chicken over beef or pork, according to a report by Yonhap News on the 13th citing the Wall Street Journal (WSJ).
"Consumers Shop More Cautiously Than Before"... Chicken Sales Rise in the US
Earlier, on the 12th (local time), WSJ reported that "the 52-week retail sales of chicken products in the US as of the 21st of last month increased by 3% compared to a year ago." During the same period, retail sales of beef and pork slightly declined. As high inflation persists, the share of grocery spending in US household incomes has increased, prompting consumers to start seeking relatively cheaper food items.
According to Yonhap News, it is a common phenomenon for consumers to turn to affordable chicken when grocery prices rise. However, with inflation tending to remain at a high level, it is uncertain how long this trend will continue. Donnie King, CEO of Tyson Foods, the largest meat processing company in the US, recently stated in an interview, "Consumers are showing more caution compared to before," adding, "Demand for chicken is currently very strong, and some of it appears to have shifted from beef demand."
Chicken Demand Increase Boosts Chicken Company Stock Prices
The increase in chicken demand is also evident in fast food chains and restaurants. Pilgrim's Pride, a chicken processing company, reported that its fast food chain sales in the recent quarter rose 6% year-over-year. Pilgrim's Pride's stock price increased by 64% over the past year as of the 10th. Wingsstop, a fast food chain famous for its chicken wing menu, saw same-store sales surge 21.6% year-over-year in the first quarter. Wingsstop's stock price (as of the 10th) rose 88% over the past year. Michael Skipworth, CEO of Wingsstop, recently commented during earnings announcements that "(the sales growth) has not yet reached its peak." Additionally, the US chicken-specialized fast food chain 'Chick-fil-A' also saw its average sales per store increase by 10% last year to 7.5 million dollars compared to the previous year.
Although chicken demand has increased, feed prices have fallen, further improving the profitability of chicken suppliers. The price of corn, a primary ingredient in chicken feed, has dropped more than 20% over the past year, and soybeans have also fallen about 15% compared to a year ago. However, with rising chicken demand, chicken prices are likely to continue increasing. WSJ cited data from market research firm FactSet, reporting that chicken breast prices have already risen more than 30% compared to a year ago, and chicken wing prices have more than doubled during the same period.
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