NCR has separated into two separate and distinct companies: NCR VOYIX and NCR Atleos.
This website is temporarily being used by and for NCR VOYIX alone, and not by or for NCR Atleos. Click here to go to the NCR Atleos website.
Global grocery shopping trends create a big local boom
Published March 2, 2021
There’s been a lot of “new” over the last year, including what a hero looks like. Generally, according to Verywell Mind, researchers have defined heroism as “prosocial, altruistic actions that involve an element of personal risk or sacrifice.” And, during the pandemic, that includes grocery stores and their essential workers as people rely on them for basic necessities.
Grocery store employees have put in a major effort to keep those necessities available. Keeping shelves stocked; sanitizing carts, baskets and surfaces; putting social distancing measures and signage in place; repurposing shelves for faster shopping; creating pick-up and delivery service—even being a direct line to the rollout of the vaccine—all of it makes for an impressive grocery list.
And, partly due to people working from home, consumers are shopping locally more than they did before COVID-19. Like so many other new adjustments, it may be a grocery store sales trend that’s here to stay.
Learn how to rapidly grow online grocery revenue by downloading our eBook
Buying local gets an extra pandemic push
Even though convenience is king to most consumers, buying groceries from local retailers instead of making a quick trip to a chain store has been trendy for several years. Consumers appreciate the value their dollars bring to their local neighborhood, the sense of community they get and jobs they help create. And that goes for grocery stores, too, especially amid COVID-19.
A great example of the power of local loyalty is what happened to California-based Oliver’s Market during the pandemic. Even with a dramatic drop-off in deli sales and the forced closure of their popular taproom where they sold pastries and coffee in the morning and tacos and beer in the early evening, Oliver’s Market found that support from their loyal customers has offset the losses.
Thanks to their customers, they haven’t had to lay off any of their 1,100 employees. They’ve even been able to maintain their $2 increase in hourly employee pay. What's more, the grocery chain increased their revenue by approximately 5 percent in 2020.
So how did Oliver’s end up with such devoted customers? As reported by The Press Democrat who interviewed Robert Eyler, an economics professor at Sonoma State University, it’s because they embedded themselves in their community.
“If they have benefited from this (pandemic), it’s because they've spent decades ingraining themselves in the community to become a first choice for spending,” Eyler said. “As they expanded, they really became Sonoma County's grocer. They're ubiquitous in terms of charitable giving. You see them at events and their logo is very well known around the county.”
Eyler conducted a study on Oliver’s Market as part of his project to track the Sonoma local economy. It yielded some interesting facts that show the grocery store’s community support isn’t just about giving to local charities:
- The grocery chain makes a 68 percent more economic impact across the county than nonlocal grocers and retailers
- For every $100 spent at the store, $186 of spillover was created for the county’s economy
- State and local taxes received $19.60 for every $100 spent at Oliver’s
And you can bet that the residents in Sonoma who push the buy local platform appreciate seeing the benefits of it in black and white.
Small grocery stores (not just chains like Oliver’s) are also seeing a boost during the pandemic. This is particularly true in rural areas; people who used to commute to cities for work are staying home—which means they’re not stopping to buy from larger chains on their way home. Also, a larger grocery retail footprint can cause more anxiety for shoppers right now, especially when stores are crowded, because social distancing is harder and it may take longer to get in and out.
As reported by Harvest Public Media, for small grocery store owners like John Paul Coonrod, that’s largely good news, but it’s stressful, too. The owner of the Great Scott! Community Market that sells basic food items, like canned and dried goods, along with craft beer and wine, has seen sales nearly double during the pandemic. He told the publication he’s seeing a lot of new faces, which may mean that people who live in metropolitan areas may also be avoiding larger chains in favor of smaller stores.
“Walmarts are always packed with people,” Coonrod says, adding that makes it hard for customers to socially distance. “[So] I think [shoppers] decided to stay local. What it ended up doing is causing my store to be packed with people.”
In the same article, Shannon McCord, owner of Ideal Market in Superior, Nebraska backs what Coonrod is seeing. His store is reporting a 20 to 30 percent increase in sales which has led to 70- to 80-hour work weeks, leading to some “tremendously difficult days.”
Small grocery stores like Great Scott! and Ideal Market are doing more than keeping their shelves stocked with essentials to keep their customers well supplied; they’re also turning to local resources to meet supply chain demands. McCord is connecting local hog farmers and butchers to keep fresh meat available and Coonrod is buying flour from local restaurants, repackaging it and selling it in his store.
The online factor: grocery retail ecommerce and analytics for the win
The convenience of ordering groceries online and either picking them up or having them delivered is something more consumers are counting on during the pandemic. In the U.S., as reported by Supermarket News, close to 80 percent of U.S. consumers have shopped online for their groceries. That’s an increase of nearly 40 percent.
Among the 80 percent choosing to shop online amid the pandemic, more than 50 percent said they would rather make their online purchases from a grocery store (rather than an online-only company like FreshDirect). But they’re particular about which grocery stores they choose. Nearly 40 percent of consumers base their choice solely on whether their desired time slot for pickup or delivery is available.
And it’s not just in the U.S. Online grocery shopping is surging across Europe, too:
- In Italy sales more than doubled in April 2020
- In the U.K., the online grocery sales at Tesco—a multinational grocery and general merchandise retailer—accounted for 16 percent of the country’s grocery sales, a seven percent jump
- In the EU, 15 percent of consumers said they have shopped for groceries online on a website that was completely new to them and 50 percent said they will continue to use the new site
- In Italy, France and Germany, while there has been an increase, only 13 to 16 percent said that they were very satisfied with their online grocery shopping experience
And there are many more variables that come into play in the online grocery shopping space. Keeping in mind that convenience and safety are the forces driving the trend, grocery stores that provide the best clicks-to-bricks experience gain the most loyalty and will win the online battle. So, knowing how well your operations are performing can be crucial in keeping loyal customers and attracting more.
But how do you measure all the moving parts of your operation, especially your online ordering success, including pickup and delivery? Just how convenient is online grocery shopping for your customers? Use retail data analytics, which measure your success against goals, objectives and competitors.
Keep reading: Retail analytics answer the “why” of business performance.
Analytics help you gauge customer satisfaction; you can use data to understand your customer behaviors, patterns and sales trends. If there’s a glitch, the data from your analytics platform will alert you so you can fix the problem. Analytics can also help you efficiently manage your inventory and supply chain, helping you keep up with customer demands—and keep the most popular items in stock—to avoid any interruption in your customer’s experience.
Post pandemic: What will grocery shopping look like?
There’s no doubt that consumers value their local grocery store like never before. And when they refer to them as heroes, they mean it. Being isolated for months and not being able to do “normal” things like dining out may seem like hardships, but what if grocery stores had closed, too? Simply getting any food or basic supplies would have presented unimaginable global problems.
Still, it took a lot of pivoting on grocers’ part to stay open. Add to that all the consumer behavioral changes and so much “new” all at once, and it’s hard to predict exactly what grocery shopping will look like in a post-pandemic world. According to Forbes, 91 percent of shoppers miss shopping in stores. And 15 percent avoid the grocery stores where they usually shop. Additionally:
- 36% of consumers have changed who shops for food (in their family) because of safety concerns (FMI)
- 11% of produce sales are up from 2019 levels. (Produce Marketing Association)
- 78% of natural grocery product sales are up from 2019. (IRI)
- 80% of Americans have yet to return to their pre-COVID-19 levels of comfort about everyday out-of-the-house activities. (McKinsey)
Only time will tell how many of these and other trends will remain after the pandemic. But knowing how your business is operating and the ability to see where changes may be needed can prepare you to adapt and keep customers coming back. It’s just one way to keep items stocked, essentials available and feeling like a hero—whether you’re a big regional chain or small local grocer.
