Sales of Spam rise as consumers trim spending

updated 7:56 p.m. ET May 28, 2008

MILWAUKEE - Love it, hate it or laugh at it — at least it's inexpensive.

Sales of Spam — that much maligned meat — are rising as consumers are turning more to lunch meats and other lower-cost foods to extend their already stretched food budgets.

What was once cheeky, silly and the subject of a Monty Python musical, Spam is now back on the table as people turn to the once-snubbed canned meat as costs rise, analysts say.

U.S. food prices rose 4 percent last year, the fastest pace in nearly two decades, according to the Agriculture Department. Many staples are rising even faster, with white bread up 13 percent last year, bacon up 7 percent and peanut butter up 9 percent.

There's no sign of a slowdown. Food inflation is running at an annualized rate of 6.1 percent as of April, according to the Bureau of Labor Statistics.

The price of Spam is up too, with the average 12-ounce can costing about $2.62. That's an increase of 17 cents, or nearly 7 percent, from the same time last year. But it's not stopping sales, as the pork meat in a can seems like a good alternative to consumers.

Kimberly Quan, a stay-at-home mom of three who lives just outside San Francisco, has been feeding her family more Spam in the last six months as she tries to make her food budget go further.

She cooks meals like Spam fried rice and Spam sandwiches two or three times a month, up from once a month previously.

Pulling Spam from the shelf prevents last-minute grocery store trips and overspending, said Quan, 38, of Pleasanton, Calif.

"It's canned meat and it's in the cupboard and if everything else is gone from the fridge, it's there," she said.

Spam's maker, Hormel Foods Corp., reported last week that it saw strong sales of Spam in the second quarter, helping push up its profits 14 percent. According to sales information coming from Hormel, provided by The Nielsen Co., Spam sales were up 10.6 percent in the 12-week period ending May 3, compared with last year. In the last 24 weeks, sales were up nearly 9 percent.

The Austin, Minn.-based company, also known for the Jennie-O Turkey Store, has embarked on its first national advertising campaign for the 71-year-old brand in several years. They've credited the sales increase to that, along with new products like individually packaged "Spam Singles" slices. Also helping sales, executives said in an earnings conference call, was the fact that people looking to save money are skipping restaurant meals and eating more at home.

Spam sales are reaching across all spectrums, young and old and rich and poor, said Swen Neufeldt, Hormel's group product manager for the area that includes Spam. Many of the consumers are new to Spam, which was created in 1937 and gained fame as the meat that fed Allied troops during World War II.

MORE FROM U.S. BUSINESS

U.S. business Section Front

Accounting rule helps boost some newspapers   Microsoft, News Corp. discuss Web deal Congress is losing its patience with the Fed BofA may reportedly extend search for CEO   Cities find the fine print is costing millions Report: Hershey may launch bid for Cadbury Chase drops arbitration from card contracts U.S. airlines' passenger revenue falls Investors to Goldman: Be less greedy Will Ferrell is Hollywood's most overpaid star U.S. business Section Front   Add U.S. business headlines to your news reader: