A year after the coronavirus pandemic began, has grocery shopping changed forever? – Cincinnati.com

A year after the coronavirus pandemic began, has grocery shopping changed forever? – Cincinnati.com

Alexander Coolidge
 
| Cincinnati Enquirer

This story is part of an Enquirer series focusing on how life has changed – and will continue to change – because of the pandemic.

Attention shoppers: Huge cleanup ahead of grocery-buying habits in Aisle 2021.

After a year of the COVID-19 pandemic, shopping for food in America has transformed.

Before the pandemic set in, grocery shopping was already in the midst of changing. You could pick up your own, have someone shop for you, have groceries delivered, have whole meals delivered, all from your local store.

Then came the virus and its demands and we adopted new strategies in order to buy food more safely. American supermarkets raced to meet the surging consumer demand amid the crisis.

Even as the country plunged into a sharp, pandemic-induced recession, grocery stores saw a nearly $62 billion infusion of food dollars thrown into cash registers. That’s an astonishing 9% jump in total sales during the last nine months of 2020 from the same period in the year before – in an industry that battles for incremental gains.

How big was e-commerce for supermarkets?

Many shoppers started ordering groceries online but busy supermarkets never closed – deemed “essential businesses” from the start of the pandemic.

How big was e-commerce for supermarkets? Kroger reported last week its digital business more than doubled in 2020 to $10 billion. The nation’s largest supermarket chain’s digital channel, serving orders for delivery or pickup, itself is large enough to be a Fortune 500 company, bigger than several tech companies on that list.

Kroger’s e-commerce business is about as big as that of eBay or Nvidia. Its sales top Intuit, Xerox or Lyft and are gaining on Adobe, Uber and Wayfair.

Walmart and other grocery rivals have offered less detail of their own fast-growing online efforts, but have disclosed robust growth. Last month, Walmart said its e-commerce sales grew 69% in the fourth quarter.

Safe to say, as we start to come out of the pandemic, the table that was set in early 2020 looks a lot different only a year later.

If last year the big question for shoppers was ‘How do I shop safely?,’ this year it’s ‘How much of my adapted behavior will I keep?’

It’s different now

Shoppers like Nellie Haverkos, a 43-year-old full-time mom from Symmes Township, still push a cart through the aisles at Kroger in Madeira, but in the last year has cut the number of visits in half. She tries to load up on items she knows she’ll need for the week.

She cooks more at home after her family cut back their previous two or three meals out a week down to one take-out meal a week.

“My habits have definitely changed. Now, I try to be thoughtful… so fewer trips,” Haverkos said.

Another big change is the supermarket is no longer a family affair. In the last year, her kids haven’t set foot in a store to limit their potential exposure to the virus.

“They miss their Kroger. They used to ask to come for their birthday. They miss all their friends,” Haverkos said. (Before, her 3-year-old especially liked to roam the aisles and catch up with people, like Elaine, the associate she learned owns her very own parrot.)

Yeah, she wants to go back to what it was.

Still, grocers are bracing for their business to slow and even shrink. It’ll be hard to keep up those sales levels once more shoppers are vaccinated and feel safer to venture back into restaurants again.

Kroger forecast a key sales measure – identical store sales without fuel – would decline 3 to 5%. Walmart, which is less reliant on just groceries, said the same figure would see growth slow to low single digits.

Kroger, Walmart and others are under pressure by Wall Street not just to grow their e-commerce businesses, but to wring profits out of them. So far, they are labor-intensive (expensive) channels that require extra work from associates who have to handpick items from shelves to fulfill orders.

Shopper Jack Klette, a 60-year-old project manager for a logistics company, was inspecting vegetables at Roth Produce at Findlay Market.

“I would say my wife and I are just coming back,” he said. 

He says they’re both more comfortable venturing out. But this past year Klette and his wife cut way back on grocery visits and other unnecessary trips outside the home. The couple has relied heavily on Kroger’s Pickup (curbside or parking lot) service for the last year.

Is e-commerce at Kroger, other grocers here to stay?

Did the pandemic make e-commerce a permanent service for customers?

Kroger, for one, is betting on it.

This spring, Kroger is expected to automate more of its home deliveries with a series of robotic warehouses set to open. The first one in Monroe quietly filled its first order last week, company officials said, offering few other details. 

Also in Greater Cincinnati, Kroger is testing a pickup-only format at a closed store in Mt. Carmel – the only one in the nation.

But grocery executives caution e-commerce isn’t the only thing in the offing. In fact, both Walmart and Kroger compared the momentum to a “flywheel” where both online and in-store growth stimulates demand for each other.

In its latest quarter, Kroger noted identical store sales grew 10.6% – with its digital channel driving 5.5% of that.

That means the traditional stores are continuing to generate robust sales. (Think about it: Kroger’s total annual sales just hit $132.5 billion. If total sales increased $10.2 billion with about $5 billion from digital, then the other $5 billion of sales growth came from brick-and-mortar operations. So there’s plenty of shoppers in the stores too.)

Prior to COVID-19, Kroger said its stores served about 11 million shoppers every day. Since then, customers have cut back visits but loaded up their carts when they do shop.

Testing other changes to the shopping experience 

With an eye toward improving in-store experiences, Kroger is testing other new technologies. Some of those include initiatives that would reduce human contact for people who want to avoid face-to-face interactions.

One pilot project in Dallas is a store without traditional checkout lanes, but only self-service scanning checkout.

Another pilot being tested in Madeira is new smart cart technology, called Kro-Go, that allows shoppers to put items in their cart, tally as they go, bag, pay, and leave the store – skipping the checkout line.

“What we find is, by far the majority of our customers that move online, they still physically go into our stores,” Kroger CEO Rodney McMullen told Wall Street analysts last week. “So it’s incredibly important for us to create a seamless experience to where customers can bounce back and forth.”

And maybe the pandemic has prompted some shoppers to try smaller stores.

Laura Domet, a 45-year-old school counselor, wanted to avoid crowds after growing wary of big box stores during the early days of the pandemic. 

“I thought that’s the last place I want to be,” she said.

Since last year, the Linwood resident buys most of her household staples online but gets her vegetables and coffee from local shops.

“So many small businesses were struggling and I heard all the big stores were doing more business than ever and I thought, if people don’t start supporting them they might not be there when we’re out of this,” she said.

That habit could stick.

For the latest on Kroger, P&G, Fifth Third Bank and Cincinnati business follow @alexcoolidge on Twitter.

Published at Thu, 11 Mar 2021 02:36:33 +0000