Beef jerky sales are plummeting as consumers struggle to fill their gas tanks, according to a Wall Street analyst.
Convenience stores are the canary in the coal mine when it comes to selling salty and sweet snacks, including beef jerky brands like Slim Jim, because as fuel prices rise, Americans are less likely to hit the freeway and stop at convenience stores along the way .
“Rising gasoline prices appear to be weighing on sales of packaged snacks in the US [convenience] Store Channel,” Bonnie Herzog, an analyst at Goldman Sachs, wrote in a research note this week.
“This is evidenced by the slowing volume trend in most major snack food categories and the absolute volume decline in single-serve chocolate and jerky meat.”
As the busy summer travel season approaches and gasoline prices remain above $4 a gallon on average, fewer people are expected to venture out on vacation, experts say.
Even as gas prices have fallen in recent weeks, paying more than $4 a gallon is straining the budgets of low-income consumers.
Additionally, there are already signs that “gasoline demand and mileage data have been falling in recent weeks,” Herzog wrote.
According to the trade group Association for Convenience and Fuel Retailing, about 83% of convenience store purchases are impulse purchases, which are typically the first to disappear when inflation rises.
“Any time you’re selling convenience food and people’s wallets get pinched, you could lose sales,” Jeff Lenard, vice president of strategic industry initiatives at the National Association of Convenience Stores, told CNN, which was the first to report the decline in snack sales reported.
Low-income consumers are on track to use up their savings accumulated during COVID on headline inflation – which hit 8.5% in March.
According to Ryan Sweet, senior economist at Moody’s Analytics, the average US household spent $327 more in March due to inflation. That’s up from around $297 per household in February, when the CPI rose 7.9%.
And that means less spending on discretionary items like snacks at the gas station.
“We believe it is reasonable to expect volume trends [convenience stores] continue to erode as pent-up savings are depleted during COVID, tax returns fade, inflationary pressures broadly continue to rise and gasoline prices remain relatively high during the key driving season,” Herzog wrote.
https://nypost.com/2022/04/15/why-beef-jerky-sales-are-plummeting-as-fuel-prices-go-up/ Why Beef Jerky Sales Slump When Fuel Prices Rise