After a turbulent year that saw tremendous highs and lows in the grocery industry, optimism abounds as we enter 2021
More than 150 grocery retailers (including brick-and-mortar, online and omnichannel) shared their thoughts and plans for 2021 in Supermarket News’ first Retailer Expectations Survey, covering such topics as the economy, sales projections, store count and hiring and, of course, the impact of COVID-19 as we get closer to the one-year mark since the pandemic first struck the United States.
Although our survey was fielded in November before the announcements of a successful coronavirus vaccine, retailers were already feeling confident about the coming year. At the time, more than 60% of retailers surveyed said they expected to see a possible vaccine or downturn in cases by the second quarter of 2021.
As COVID numbers have surged nationwide throughout November and December, the approval and rollout of a vaccine in the United States will only help to boost retailer optimism.
As for grocery sales, the optimism was even higher: When asked how they anticipate sales to perform in the first six months of 2021, 82% of respondents said they expect sales to either stay the same or increase during that time frame, with nearly half (46%) anticipating a sales increase of 1% to 9%.
Retailers were split pretty evenly on the subject of growing store count this year, with 54% planning growth versus 46% not. Still, moderate growth is in the cards for those who plan to open new stores, with 69% of those retailers planning to increase store count by 1% to 5%. Notably, another 25% of respondents plan to grow store count by a more ambitious 6% to 10%.
Hiring will be another area of continued growth in 2021, following a year in which supermarkets hired thousands of associates to meet COVID-spurred demand, both in-store and online. More than half of retailers (56%) plan to continue increased hiring in 2021, with the majority of those increasing the number of workers by 1% to 5%.
To maintain the sales lifts that they experienced in 2020 due to COVID-19, grocery retailers will continue to expand many of the initiatives they launched last year as well as introduce more steps to make grocery shopping safer and more convenient for consumers.
Top on the list of actions for 2021 are introducing or expanding online grocery/delivery and continuing enhanced safety measures (including masks and PPE, plexiglass partitions, social distancing), cited by 60% and 59% of retailers, respectively.
Other steps retailers plan to take include introducing or expanding curbside pickup (48%); improving supply chain efficiencies (42%); a return to in-store promotions (39%), which many stores and CPG companies halted or limited earlier in the pandemic; expanding fresh offerings (36%); and increasing private label (32%).
When it came to which product categories retailers expect to see the most success with in 2021, fresh produce, meat, center store grocery and frozen were all close at the top of the list; conversely, deli/foodservice and general merchandise were the categories retailers expect to be the most challenging.
Given that deli/foodservice was perhaps the most challenged in-store category during the early part of the pandemic, it’s not surprising that more than half (56%) of retailers say they plan to alter or change their prepared food menus, with a focus on more grab-and-go and prepackaged items, for example.
Another 36% of retailers say they plan to increase their prepared food offerings, while only 3% plan to cut back on prepared foods. Twenty-four percent of retailers have no plans to change their prepared food offering in 2021.
