The Scoreboard
Commentary
- Last week, we learned that… every once in a while, a fast food LTO can drive significant traffic gains. I’ve been puzzling over comparatively robust QSR traffic the past several weeks, wondering aloud if, oddly enough, the SNAP situation in November sparked an increase in fast-food restaurant visits. Seeing the strength wane each week during the month seemed to lend credence to the theory. Then the Placer.ai data for the week ending December 7 landed. It showed QSR visits up 4.3% year over year, the best showing since January. That was a head-scratcher. Digging a little deeper, burger chains led the way, with visits to seven leading chains up 12.8% compared to the same week a year earlier. Huh. Then it dawned on me: McDonald’s (+8.2%) and Burger King (+18.9%) are riding a massive wave created by the “Grinch Meal” at the former and the SpongeBob Square Pants promotion at the latter. People turn out for these. A story in Nation’s Restaurant News offered a great first line and details:The Grinch may actually be saving Christmas this year, at least for McDonald’s. Less than a week after launch, McDonald’s has sold out of “The Grinch Meal” in several markets, according to reports on Reddit. Over the weekend, the chain was also experiencing supply shortages at some restaurants. In Louisville, for instance, two restaurants didn’t have a sufficient supply of Big Mac buns or sauce. The Big Mac is one of the options in The Grinch Meal. McDonald’s senior marketing director Guillaume Huin posted on X: “The McDonald’s Grinch Meal is taking everything by storm. Performance levels we have not seen even during the Minecraft Meal or the return of the Snack Wrap. “If you want to try the Grinch Salt Shaker Fries or grab the collector socks, I recommend going soon. They won’t last long…” The meal includes the choice of a Big Mac or 10-piece Chicken McNuggets order, medium drink, and dill pickle “Grinch Salt” McShaker Fries, a twist on the chain’s signature fries making their domestic debut. The Grinch Meal also includes a pair of seasonal socks, available in green, blue, red, and yellow, and with a scribbled mischievous message from The Grinch. Pricing of the meal varies by market, but in Louisville, it is $12.18. Meanwhile, Burger King’s SpongeBob menu was also introduced December 2 and is also experiencing shortages, according to Reddit reports. The menu, which coincides with The SpongeBob Movie: Search for SquarePants, includes a Krabby Whopper, Mr. Krabs’ Cheesy Bacon Tots, Patrick’s Star-berry Shortcake Pie, and Pirate’s Frozen Pineapple Float. In an email to Nation’s Restaurant News, Burger King wrote: “The SpongeBob menu has been swimming off trays faster than Gary can chase it.” SpongeBob is a wildly popular character. Since the show’s debut 1999, it has been watched by more than 100 million viewers and remains the most in-demand children’s television show in the world.
This seems positive for cheese demand, even if it’s a temporary boost. Even so, I’m not yet convinced that we’ve turned the corner on restaurant spending. Indeed, sit-down restaurant traffic sagged during the week ending December 7, declining 2.2% year-over-year, the softest performance since early April. We’ll keep watching for a trend change, but in the meantime, cheese marketers will take the wins where they can find them.
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Convenience continues to win. Grocery delivery is gaining popularity at an accelerating rate, likely due to a new push by Amazon. Data from Brick Meets Click showed online grocery sales totaled $12.3 billion in November, up 6% from October and 28% from November 2024. Morning Consult polling indicates that 30% of Americans used grocery delivery at least once in November, up from 22% in November 2024 and 17% in November 2022.
If you’re an Amazon Prime customer in certain areas, completing a “same day delivery” transaction, you’ve probably seen a screen pop up offering free, same-day delivery of groceries if the overall ticket tops $25. According to a USA Today story, Amazon launched in 1,000 cities in August but expanded the service to 2,300 markets in early December. The story mentioned that Amazon offers more items, too:
Over the past four months, Amazon has expanded its grocery selection for same-day delivery by 30%, according to a news release. The retailer found that the top 10 most-ordered grocery items include bananas, avocados, strawberries, Honeycrisp apples, limes, blueberries, blackberries, organic bananas, Navel oranges and 12-packs of toilet paper, respectively, as outlined in the news release.
Grocery Dive reports that Amazon seeks to position same-day distribution sites within 20 minutes of 70% of the US population.
How do dairy products fare in this environment? What about impulse or discretionary purchases of specialty cheese or candy bars? I’ve seen a gallon of milk and other perishable dairy items show up on my Amazon “free delivery today” pop-up screens. You can buy dairy that way. I’m not sure I’d race to do it, personally (especially in the Phoenix area). Keep in mind, too, that people aren’t entirely abandoning grocery stores. According to Morning Consult surveys, 79% of us still bought groceries in stores in November, down from 81% in November 2024 and 84% in November 2022.
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This week’s “bifurcation quote of the week” comes from Kroger. During the company’s earnings call on December 4, Interim CEO Ronald Sargent said that middle-income shoppers are increasingly looking like lower-income shoppers. Supermarket News noted:
Higher-income shoppers continued to keep a strong pace with Kroger, but middle-income consumers are feeling the heat, Interim CEO Ronald Sargent told analysts. “They’re making smaller, more frequent trips to manage budgets, and they are cutting back on discretionary purchases,” Sargent noted.
Kroger’s same-store sales increased 2.6% year-over-year during the third quarter, roughly in line with food-away-from-home inflation. Kroger stock closed Friday at $63.19 per share, down 16% from the August highs.
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Retail natural cheese sales topped year-prior levels for the eighth time in the past nine weeks. According to Circana, volume increased by 1% year over year for the period ending December 7. Average price: $5.13 per pound, up a penny on the week and down 4% year-over-year. For the nine-week period (weeks 42-50), sales are up between 1% and 2%. That’s not spectacular, but solid, especially considering that the previous nine-week stretch featured flat volume growth. Butter continues to move okay, too, with volume up by a bit more than 2% year-over-year. The average price: $4.69 per pound, up 24 cents on the week but down 7% year-over-year.
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