Will grocers maintain COVID share gains as restaurants reopen?
Just a few short months ago, the retail grocery industry was all about the expansion of e-commerce, growth in ethnic categories and the push for foodservice. While the coronavirus pandemic accelerated some of these trends, the FMI “U.S. Grocery Shopper Trends 2020” report* suggests that it has dramatically altered others.
For starters, supermarkets and other retail food stores had nearly a decade of spending growth compressed into four weeks ending mid-April. The erosion of sales to foodservice experienced for years did a 180° turn when most restaurants closed or switched to take-out only. In the first month of the pandemic, revenue for grocers jumped by more than 25 percent compared to the previous month, and reports are that subsequent months are more than 10 percent higher than pre-pandemic levels. Share of stomach for retail changed from 50 percent in February to 68 percent in April, according to David Feit of The Hartman Group, which conducted the study for FMI.
E-commerce experienced similar spending growth during those early months. The number of shoppers getting at least some of their groceries online nearly doubled in March to about 30 percent.
The third big impact from the pandemic for retail grocers is in the number of meals made at home. Two out of five consumers are cooking more meals at home, and Millennials and Gen Xers are now cooking meals at an even higher rate.
All of these dramatic growth trends are expected to fade at least a little after the country resets, Mr. Feit said. But the numbers for retail share of stomach, online ordering and meals cooked at home are certainly not returning to their pre-pandemic levels any time soon.
A few other points from “Grocery Shopper Trends 2020” include shoppers:
- Wanting retailers to stress hygiene efforts, including keeping stores clean, providing sanitizing wipes and requiring masks for customers and staff;
- Spreading their increased retail spend over an increasing number of stores;
- Being concerned about the items they need being out of stock;
- Remaining focused on the quality of fresh categories.
*The initial research for the report was conducted prior to the pandemic lockdowns that saw massive hoarding and related supply issues. FMI subsequently went back to shoppers and retailers to see how sudden pandemic changed their opinions.
DISCUSSION QUESTIONS: How can grocery retailers best take advantage of the sales growth and goodwill they’ve attracted during the pandemic? What grocery shopping changes made by consumers do you most expect to stick as states across the U.S. reopen more fully?