Will grocery basket sizes be cut down to their former size?
For grocers, significantly larger basket sizes more than made up for fewer transactions due to lighter traffic during much of the pandemic. Whether in-store grocery basket sizes return to pre-pandemic levels appears to depend on a number of factors.
Grocery basket sizes were lower year-over-year against severely depressed traffic levels a year ago, according to Catalina’s CPG Shopper Insights for the four weeks ended May 2. Compared to typical traffic patterns in the same period in 2019, however, basket sizes were up 18 percent, shopping trips were down nine percent and dollar sales per store rose seven percent.
Recent first-quarter results from Sprouts Farmers Market and Natural Grocers have likewise shown basket sizes continuing to remain elevated despite improving traffic trends.
The home cooking craze could continue to elevate baskets. Fifty-one percent of Americans were cooking more and 41 percent were baking more, according to a survey from December from research firm Hunter. Of those, 71 percent plan to continue to do so after the pandemic ends, the leading reasons being to save money (67 percent), eat healthier (56 percent) and feel good (56 percent).
A return to eating out, however, will likely work against home cooking. U.S. Census Bureau data showed sales at eating and drinking establishments recovered to $64.9 billion in April, just below the $66.2 billion in February 2020 before the pandemic arrived.
The shift toward online grocery will also take away from in-store grocery spend. The online basket size has been found to be much larger than offline. At BMO Capital Markets’ Farm to Market conference, Kroger officials said the average digital basket size is close to three times that of in-store.
The work-from-home trend may also impact basket size.
Natural Grocers CEO Kemper Isely said on an investor call last month that an internal study found the higher baskets were largely due to fewer shoppers popping in for lunch, a drink or a snack.
“Until the office workers come back and are working in the office, I don’t think we’re going to see that impulse of smaller baskets come back to our stores,” said Mr. Isely.
- As COVID-19 Vaccination Rates Rise, Grocery Shopping Behavior Dramatically Evolves – Catalina/PRNewswire
- America Keeps On Cooking – Hunter/PRNewswire
- Consumers ramped up their restaurant spending in April – National Restaurant Association
- US Online Grocery Survey 2021: Post-Surge Prospects (Select Findings) – Coresight Research
- The Kroger Co.’s (KR) Management Presents at Virtual BMO 16th Annual Farm to Market Conference Call (Transcript) – The Motley Fool
- Natural Grocers by Vitamin Cottage, Inc. (NGVC) Management on Q2 2021 Results – Earnings Call Transcript – Seeking Alpha
DISCUSSION QUESTIONS: Will supermarket basket sizes return to pre-pandemic levels as comfort with in-store shopping returns? Will the online shift, home-cooking, work-from-home or other factors likely to elevate or reduce basket sizes?