NRF 2022: Grocers stay prepared for tomorrow’s new and unexpected challenges
Sajal Kohli, senior partner and global leader of consumer goods and retail practice, McKinsey & Company, started his presentation last week at the NRF Big Show with perhaps the biggest understatement of the year so far. He said that this is an unprecedented moment in time to be a grocer.
What was new (and interesting) in the McKinsey research was its finding that trends that accelerated during the pandemic will maintain velocity as consumers and the industry move to the next stage. Also interesting were trends not included on its list.
He began with some of the numbers that got us to where we are. Sales in the grocery online channel rose 58 percent from 2019 to 2021. The 8.7 percent increase in food-at-home expenditures during this period was four times the historical growth rate. There has been a 16.8 percent reduction in food away-from-home, and the foodservice sector won’t fully rebound in the short-term.
Mr. Kohli said the primary themes shaping 2022 and beyond include the rise of the value (inflation-driven), social (ESG-driven) and health conscious consumer (lifestyle-driven). We’ll also see more focus on personalized and seamless omnichannel engagement, the “Great Retirement” and automation. Pushing these themes are the facts that 56 percent of consumers believe the economy will be impacted for at least the short-term and 61 percent of consumers are still waiting for their routines to return to normal.
Absent from Mr. Kohli’s list are some of the themes this space and others have given significant coverage to over the past several years. Think of diet-focused trends like gluten-free and last-mile trends like buy online, pickup in-store. Also left out were trends like meal subscriptions services and everything local.
Mr. Kohli said retailers are making significant investments in expanding capabilities and driving disruption in the retail food ecosystem. They are developing partnerships to modernize their tech stack, pursue automation, drive efficiencies in the last mile and create new, innovative value propositions.
DISCUSSION QUESTIONS: What is your take on the themes that will have the strongest impact on the way grocery retailers operate their businesses in 2022? How can grocers best address the challenges and related opportunities?