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Sunday, December 4, 2022
COVID-19: The Checkout: How grocers and consumers are changing

NOTL resident John Scott is chair of Niagara College, as well as a former CEO, current board member and retail adviser in the grocery industry. He offers his perspectives from the grocery aisles in the era of COVID-19.

John Scott
Special to The Lake Report

If you’re a baby boomer you no doubt remember the days when mom went to one grocery store to buy all of the family’s consumable goods.

Over time that concept has changed as a plethora of food retail outlets have been developed to appeal to differing preferences.

For example, before the COVID-19 pandemic it was quite common for customers to purchase packaged goods at discount stores while picking up produce and meats at specialty outlets or perhaps securing organic and gluten-free products at still other unique stores.

The need for a store to have a consumer valued point of differentiation became critical to success. The days of loyalty to an exclusive store shopping experience were replaced by the reality of sharing customers.

The result has been a dramatic change in the structure of the traditional supermarket. Given that since the great recession in 2008, packaged goods have been increasingly purchased at discount operations, most traditional grocery stores have reduced the amount of shelving in the centre of the store.

While you can still find most products, the number of brands in each category has been reduced. The new supermarket design favoured increasing space for fresh, specialty departments and frozen offerings.

The goal is to delight consumers with superb produce, mouth-watering artisanal breads, a variety of fresh seafood, creative cheese from around the world, outstanding deli selections, unique cuts of some of the finest meats and delicious home-cooked meals prepared under the supervision of amazing chefs – all at reasonable prices (in fact, as a share of income, Canada’s food cost is among the lowest in the world). As Canadians we have truly enjoyed an amazing feast of fabulous food.

COVID-19 almost immediately introduced a profound change in consumer habits and buying patterns. One of the chains I work with has researched its sales product and volume through the years and the data suggests we are behaving in a similar manner to the early 1980s.

There are many ways we measure success in a store – one is weekly customer count. After the initial surge of panic buying this chain’s count is exactly half of that of a year ago. That would imply a problem until you consider a second determining factor – basket or average transaction size.

Transaction size is the average of purchases by all customers regardless of size, which means it can range from a litre of milk to a full order of groceries. Our stores have become accustomed to an average transaction in the mid to low twenties.

The new reality is an average transaction of more than double that amount, which, combined with the customer count, has told us two things: our consumers are coming much less frequently but buying substantially more.

We’ve also seeing a return to customers sourcing food products from a single store. After all, who wants to repeat all of the necessary precautions in a multitude of stores? The reality of fewer customers per week has also eased the pressure on sanitation and staff safety issues as well as the logistics involved in facilitating social distance measures.

Consumer product purchasing has changed dramatically. The decline in packaged good purchases has been more than reversed, which initially led to several “out of stock” sold out situations. 

Our meat and produce sales continue to hold at levels prior to the pandemic but the in-store deli and prepared meals sales have declined to the point where they may be suspended until after the crisis. 

Very popular in-store features such as salad or olive bars have been closed. Frozen exotic foods are becoming extinct but plant-based protein is surging. 

Our online business rose a brisk 27 pere cent but we “pick” in store and needed spaced so we have been creative in closing in-store eating areas to facilitate staging areas. 

Frankly, I can’t believe how quickly stores adjusted and how effective retailers are meeting the needs of consumers in this new reality. And we’re all very proud that staff and customers are safe and that a superb, welcoming atmosphere has been maintained.

Soon it will be time to figure out where we go from here.