The great grocery boom is slowing down
By Nathaniel Meyersohn, CNN Business
September 14, 2020
New York (CNN Business)As the pandemic began in the spring, consumers were hoarding groceries and household staples, driving up sales at top chains like Walmart, Costco and Kroger.
But the height of the boom is over for America's biggest grocers. Food and beverage sales at US retail stores grew 11.5% in August compared with last year, according to Nielsen. That compares with 31.2% year-over-year growth in March.
Sales online have also moderated. Delivery and curbside pickup sales totaled $5.7 billion in August, down from $6.6 billion in May and $7.2 billion in June, consulting firm Brick Meets Click said in a report Thursday.
That's because shoppers have settled into a routine, retail analysts say. Some restaurants have reopened, leading consumers to shift their spending. Stimulus checks have ended and an extra $600 in weekly unemployment benefits have expired. This has strained people who were already struggling before the pandemic, as well as those who have been laid off from their jobs during it.
"People aren't hoarding. They're not stocking up on products like they were," said Katie Thomas, head of the Global Consumer Institute at Kearney, a strategy and management consulting firm.
Top grocery chains are reporting slowdowns, too.
Kroger said Friday that sales at stores open for at least one year, excluding fuel, increased 14.6% during the quarter ended August 15 versus a year ago. That compares with 19% sales growth the prior quarter.
Kroger said that sales dipped from mid-July to mid-August in part because of the end of federal stimulus and a reduction in food stamp benefits. Kroger also attributed the drop-off to customers adapting to the pandemic and resuming some of their normal spending patterns, such as eating out for dinner.
"Customers are now adapting to some level of a new normal," Kroger chief financial officer Gary Millerchip said on a call with analysts Friday. Kroger forecast that sales will grow at 13.0% for the remainder of the year.
During its latest quarter ended August 1, Walmart, this country's largest grocer, said food sales...
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A Second Grocery Stock Up on The Way
Victoria Campisi, The Food Institute
Sep 9, 2020
More than half of shoppers plan to stock up on groceries if another coronavirus-related shutdown occurs, according to data from Acosta.
“As COVID cases continue to rise, most shoppers believe we’re headed for another shutdown and plan to respond accordingly, so retailers should be prepared for a new surge in stocking up,” said Darian Pickett, CEO of North American Sales at Acosta.
Acosta’s research found 67% of shoppers think another shutdown is extremely or somewhat likely to occur.
And the 23rd installment of the Axios-Ipsos Coronavirus Index indicated most Americans are hopeful COVID-19 will be under control in six months
The Index, released Sept. 1, found that two thirds of Americans say that returning to their pre-COVID lives is a large or moderate risk, down from 71% at the beginning of August. Americans’ social engagement is essentially unchanged over the last week with similar numbers reporting self-quarantining (18%), social distancing (76%), going out to eat (37%), or visiting friends or relatives (46%).
Meanwhile, Acosta found that 38% of shoppers stocked up at the start of the pandemic and plan to stock up again, while 15% did not stock up at the start but plan to this time and 17% stocked up at the start but won’t this time. Twenty-four percent of shoppers did not stock up at the start and also won’t be doing so if another shutdown occurs.
Although kitchen fatigue may be developing for many consumers, a new set of grocery related habits has been set by COVID-19, reported The New York Times (Sept. 8).
“People are moving on to more complex cooking, and we don’t see that going away,” said Rodney McMullen, the chairman and CEO of Kroger, where sales rose 30% at the onset of the pandemic.
McMullen noted that he and others in the business say the COVID-driven return to the kitchen could change grocery shopping forever.
“This is a pivotal time in our history,” said Anna Nagurney, a professor in the Isenberg School of Management at the University of Massachusetts who studies supply chains. “Not all of what we’ve seen will stick, but a lot of it will.”
For example, the need to avoid infection has taught people how to get by on fewer trips to the store and to make adequate shopping lists.
“People now go to the store with purpose,” said John Owen, the associate director for food and retail with Mintel...