People still got to eat. No doubt the increased costs associated with the pandemic will present headwinds as stores start to comp, but the offset is some of the new trends in home cooking as noted. I believe that shopping patterns have changed for many customers, and some of these will persist while others will revert to pre-pandemic times. I suspect that some of the goodwill that grocery retailers created by serving customers through the toughest times during the pandemic will be rewarded with loyalty.

It will be a rocky path for the grocery retailer who thinks this surge of business will last forever. As people feel comfortable going back to restaurants – as restaurants open back up to full capacity – there will obviously be a drop in the average weekly grocery bill of the consumers who return to some sense of pre-pandemic normality. However there have been some new habits formed by consumers that should make store sales better than 2019, even if they drop compared to 2020 and early 2021. Forecasting will become more important than ever to ensure the right inventory levels are maintained. Retailers must look at data, watch store trends, and grab whatever information they can get that will help them make good decisions for the future.

2020 was an exceptionally good year for grocers. Stockpiling early on in the pandemic and a net transfer of spend from foodservice to food retail across the whole year both pushed up sales dramatically. As the pandemic abates, it is inconceivable that most retailers can beat this high watermark of 2020 and we should expect demand to be more muted. This should not come as a surprise and the deterioration in 2021 should not be taken as failure but, rather, as a market correction. Proper analysis will compare 2021 with 2019 as well as with 2020. That said, the tailwinds of 2020 will give way to some headwinds which are very unhelpful. Among them are a continued focus on price as the discount players (Aldi, Lidl, dollar stores) continue to expand. Higher costs from fulfilling more orders online. Investment requirements in infrastructure to adjust businesses as consumer habits shift. And overhead increases from higher energy costs and potential minimum wage hikes. Some of these things might be offset by mild inflation, but given the competition… Read more »

As one of my clients pointed out 2020 was, along with everything else, a rush in retail innovation. It was the only way to survive. And, particularly for grocers, it was overdue.

Now, do I expect them to exceed their sales from the height of the pandemic? Probably not, especially not during the first rush of vaccinations. I know I’ve eaten in restaurants about six times since my vaccination took hold on February 14. But I can’t do it forever. I’m tired of it already.

So grocers will have a dip in sales once mass vaccinations have occurred, but I believe many of those sales will return. And grocers now have the technologies, processes and experiences to support any kind of selling. This is no small thing.

I’ve said before, I believe grocery delivery (and BOPIS as well) is addictive. Now they’re ready to meet that request profitably.

All signs point to a growth slowdown, but that doesn’t mean it’s going to stop dead in its tracks. Pushing variety will help a lot. One of the downsides from buying from stores that specialize in large size/bulk purchasing is that you reduce variety at home. Grocery stores are well-positioned to take advantage of this – great stores will really push the idea that shoppers can have variety in their meals. And I don’t think the pressure is any greater from Costco, DG, Target, or Walmart – the latter has been a de facto grocery store for years now.

Grocers in 2021 are going to have a hard time comping against their extraordinary 2020 sales, but that doesn’t mean they aren’t long term winners due to the pandemic. Pre-COVID-19, restaurants and grocery stores shared a 50/50 split of consumers calorie dollars. During COVID-19 grocers received as much as 75 percent of that budget, and for the entire year averaged better than 60 percent. As restaurants open back up, grocery stores will lose some of those gains, but I don’t think they are going to lose them all. Many new cohorts of consumers learned to cook, took cooking lessons, discovered recipes, bought cookware, discovered that cooking was a better value, more healthy, etc. Some of that will stick. Furthermore those grocers will be competing against a weakened restaurant industry that will take many years to recover. The other factor is that all grocery stores did not fare equally. Grocers that had invested in digital and omnichannel before the pandemic had a distinct advantage over those that didn’t, and grocery stores with a full assortment had… Read more »

There will be a moderate decline as people yearn to dine out. However the demand will level off at the six month mark. We must also consider that the pandemic has forced grocery chains to undertake new, customer-centered service initiatives and those will remain in place, to the delight of customers and to the benefit of the chains.

A slower rate of growth or even negative comps are not at all a rocky path when they are totally predictable and totally understandable. I think the challenge is recognizing and capitalizing on the new sticky behaviors the article mentions. How do grocers capitalize on this new found love for cooking and eating at home? Where is the opportunity to differentiate and build loyalty versus competing on price? What role can BOPIS and delivery play in cultivating loyalty? A huge lesson can be taken from Target, who focused on and invested in the customer several years ago. They lived with the knocks they received from Wall Street while building a totally customer-centric business. Grocers might want to take a lesson and live with some of the short term hits they will take from some analysts for slow or negative growth. New shopping and buying behaviors simply must be recognized and invested in.

I guess it depends on what you mean by conventional supermarkets. The shift to digital will continue but obviously the pace will slow compared to peak pandemic.

Consumer behavior doesn’t simply go back to the way it was before. Consumers got used to convenience, and many ordered online groceries for the first time ever. Grocers (including Instacart) got a lot of things wrong that they need to improve and transform in order to drive that next wave of digital adoption. The whole replacement item process is one such area. Grocers that continue investing and experimenting will be the long-term winners.

I do not see a rocky path ahead for grocery. This pandemic is not over! Online grocery will never return to pre-COVID-19 levels and is here to stay. The grocers who invest in Micro-Fulfillment Centers (MFCs) will reap the rewards over the long haul. Robotic picking can pick 20 times the speed of a person at a cost effective price and that ratio will just go up. With the price of this technology coming down and the cost of people going up, retailers need to move quickly before they lose the market to Amazon, Walmart, Kroger and Target who are already marching down this path.

The return to everyday spending is expected after the pandemic. It is not a loss to stop operating in high-stress stockpile emergency mode. Many grocery retailers have invested in innovative technology solutions during the pandemic that will continue to improve their in-store shopping experiences long past the pandemic. For example, reaching over 30 percent adoption, the most popular grocery technology investment during the pandemic is scan and go touch-free mobile checkout. Leading grocery retailers that have invested in scan-and-go mobile checkout include Fairway Market, Westside Market, McKeever Price Chopper, Big Y, Co-Opportunity, Mother’s Market, Hy-Vee, Walmart, Sam’s Club, Kroger, Wegman, H-E-B, AHOLD, Tesco, Waitrose. Making their in-store experience mobile-friendly is the best way to connect with their shoppers and help make the shopping experience stress-free and fun.

I stopped pandemic grocery shopping at least six months ago and returned to my normal in-store shopping habits. I wonder how many others did the same?

The challenge for grocers now is keeping shoppers engaged. Consumers who enjoy cooking at home are likely to continue but grocers will need to find new ways to keep them cooking.

All grocers have cooking videos and recipes online, but what about in-store? Bring back cooking demos when it’s safe, offer kits assembled in one bag at one price or merchandise components necessary to create an entire meal in one place, post recipes and ideas with QR codes in the meat and vegetables sections. When shoppers know a store will continue to offer fresh ideas that store remains top of mind.

2021 will be the year of negative comps for the retail food industry. While nothing can be done to change that, stores have an opportunity to reinvent how they go to market. Will they stick with the same old promo process, with more offers and limited-time sales and coupons, or will they really try to change the shopping experience to make it more seamless for shoppers?

Retailers should expect a reversion to the mean in terms of total at-home eating expenditures. But that doesn’t necessarily portend traditional grocers’ demise. They have learned a lot in a hurry about meeting shopper needs in online order and delivery during the pandemic. Let’s hope they use it to their advantage. It may be the thing that saves the good ones from Amazon.

Before the pandemic, the grocery industry was transforming to shift to meet rapidly changing consumer behaviors. While in a post-pandemic world consumers will have more food choices, grocery operations that have shifted to the digital-first, health-conscious, time-strapped consumer will be amongst the winners when the traffic shortfall begins.

We already saw at least 30 percent to 40 percent of the center store re-imagined and repurposed with additional perimeter services. These include increasing the organic fresh and perishables, prepared foods, groceraunts, cafes, financial and health services. Consumers have plenty of choices for commodity products and can order these on a subscription service basis.

While there will be a traffic shortfall, Whole Foods, Kroger, and all the independent grocers have to continue to drive technology, services, and product innovations to keep the customers returning and preserve their gross margins and revenue growth.

Wow, what a lesson learned over the last 12 months for grocers: hoarding pandemic customers, sales booming, product sell-outs, panic. Now the tsunami has passed and more normal times return. It means being a retailer again, figuring how to draw customer foot steps from competitors, how to “up” the average sales, and not getting depressed about sales comparisons of the pandemic versus today.

Now it is time for the merchants to make some great calls. The strategies we employed before the pandemic have now resurfaced again, and we must be our best in merchandising presentations, in-stocks positions and especially on the loyalty programs. We must make customers want to run to the store again, and make new customers demand to join the loyalty club. We’re back to real retail.