The new year is here, and the grocery business gets to finally close the book on a difficult and complicated 2020. But while the year may be over, the pandemic that defined it will be an issue for the foreseeable future. Still, according to several new reports and developments, it is shaping up to be a very good year for grocery in the U.S.
“With periods of economic uncertainty often privileging grocers for their ability to provide meal-time value, and mission-driven shopping likely to linger at least through Q1 2021, it is hard to see any grocery brands not producing very effective performance in the coming year,” Ethan Chernofsky, vice president of marketing at retail analytics company Placer.ai, told Supermarket News.
The Placer report, which examines transactions for the seven top U.S. grocers, saw fewer overall shoppers, but those shoppers saw a significant increase in visits. The company attributes the drop in shoppers to COVID. But compared to 2019, the seven top grocers saw only a 2.5 percent sales decline. If Trader Joe’s, which it counts as non-traditional, is removed from the equation, the numbers improve significantly to an average 0.9 percent decline on Dec. 23 and a 1.0 percent increase on the 24th. This took place in an environment where wholesale clubs dropped 14.7 percent before Christmas.
“The takeaways here are important, as they further deepen the divide between the ‘do-it-all’ traditional grocer and the niche player,” Placer said. “Critically, this doesn’t mean that the ‘niches’ are all that small. Wholesale clubs and Trader Joe’s themselves have proven there is a huge market for brands that don’t check all of the boxes for a standard supermarket trip. Nonetheless, it does give a potentially significant boost to the brands that do, as the continuation of certain trends, including a shift to grocery at the expense of restaurants, is expected in 2021.”
Price Chopper’s Omnicommerce Investment
Golub Corporation-owned grocery chain Price Chopper is taking a turn for the omnichannel, having signed on with Manthan-RichRelevance, a leading experience personalization and customer engagement platform, to drive “intimate, highly personalized customer engagement across the lifecycle,” according to a statement announcing the partnership. Price Chopper Supermarkets will leverage the company’s integrated SaaS suite, including Customer Data Platform, Advanced Customer Analytics and Omnichannel Lifecycle Marketing, to achieve insights-driven personalization, the release noted.
“We’re proud of the product mix and shopping experience we provide in our stores and online. Personalization is an important strategic initiative in our continued endeavor to enhance customer experience across digital and in-store,” said Glen Bradley, Price Chopper Supermarket/Market 32’s group vice president of marketing. “We did a comprehensive evaluation of the market before selecting Manthan-RichRelevance. We’re excited to announce the partnership and the comprehensive capabilities of the platform to help us execute our strategic vision with speed.”
More Prop 22 Problems Arise in CA
In what seems to be a response to the passage of Proposition 22 in California two months ago, Albertson, the country’s second-largest grocery store chain, has announced it will eliminate its unionized delivery drivers in California.
The delivery outsourcing effort by Albertsons, which operates Vons, Pavilions and Safeway stores, will be in full effect by the end of February. The company will officially turn its delivery operations over to DoorDash or other outside companies that specialize in that type of work.
Although it is not known how many of the company’s unionized drivers will be impacted, a spokesman for Albertsons said efforts are underway to find other opportunities within the company for any displaced drivers.
“Albertsons Companies made the strategic decision to discontinue using our own home delivery fleet of trucks in select locations, including Southern California, beginning Feb. 27, 2021,” said spokesman Andrew Whelan, as reported by MarketWatch. “We will transition that portion of our eCommerce operations to third-party logistics providers who specialize in that service.”
While notable, Albertsons isn’t the first firm to respond to Prop 22 in a big way. Both Uber and DoorDash have announced plans to roll out new fees to offset the cost of the concessionary wage and benefit programs the companies promised in lieu of adding hundreds of thousands of Golden State workers to their payrolls.
Pandemic-Driven Redesign in Asia
With U.S. supermarkets adjusting to social distancing and digital-first tools, Asian retailers are considering redesigning their stores. According to the South China Morning Post, wider aisles, bigger entry/exit points and contactless payment technology are attracting new investments.
The goal in Asia, as in the U.S., is for consumers to feel safe and comfortable inside stores. However, in an effort to see a return on this extra investment, operators are looking for ways to get consumers to stay longer and spend more, according to Oliver Corrin, regional director for Asia at CADA Design, an interior design consultancy with studios in Hong Kong and London.
“The outcome is a new wave of supermarket interiors that are designed to be calming, welcoming and atmospheric for users with new features,” said Corrin. His firm recently redesigned the 140,000-square-foot Lotte Food Avenue in Seoul and The American Club Hong Kong’s Town Club.
“Particular attention is also being focused on high-congestion areas such as entrances and pay points. Employing measures to keep customers at safe distances from each other has been a focus, as is the tech that can make this possible,” Corrin added.