Supermarket News recently reported that 2020 was a record-setting year in sales in the grocery industry due to the pandemic — including periods of stock-up shopping, the increase in meals at home and the expansion of online services and curbside pickup/delivery.
I recently overheard a shopper tell someone he’d gained the “Covid-15,” or fifteen pounds because, well, sheltering in place brings us a lot closer to our refrigerator – and our mobile phones. In many ways, we have become too tethered to our mobile “ordering” devices, which can be a mixed blessing with productivity versus inactivity.
Did Covid-19 Make Us Corpulent and Lazy?
In the 2008 animated film WALL-E, “future humans degenerate into helpless corpulence due to laziness .. their every whim catered to by machinery.” The movie appears dangerously close to the current American experience.
Both food retailers and restaurants are equally responsible for fostering our overly comfortable meal transactions. But after the pandemic ends, what will eating occasions resemble? In our opinion and evidence-based research, we believe while some behaviors may change, we will return to pre-Covid-19 habits as soon as the social, political and business systems return. Which of course, is a task in itself.
Five Infallible Consumer Truisms
The social infrastructure may take the longest to repair – with many Americans still unvaccinated and many others skeptical of the vaccines and electing not to take it. However, even if the delivery/ordering of prepared foods changes to meet the advances achieved during the pandemic, the mutual benefit to the consumer and retailer will remain. There are, and always will be, a set number of “truisms” when it comes to consumer behavior, and there are five we believe are infallible:
The Five Truisms: Retail Prepared Foods
|Truism||Implications to Food Companies|
|Consumers continue to report they plan to purchase prepared foods once a week to several times a week in-store. The reasons relate to value and convenience.||There is no clear evidence that demand and growth of in-store prepared foods will decline.|
|Retailers report that prepared foods are critical to customer satisfaction, driving traffic and building margins.||Retailers view prepared foods as a response to QSR competition and this will only continue.|
|Made-to-order sections in a supermarket are top destinations for busy professionals. Remote workers cling to the days when these were open.||Look for demand to pick up in the made-to-order sections, as it accelerates dinner preparation and is (often) less expensive than a restaurant meal.|
|Prior to Covid-19, 78% of shoppers purchased prepared foods in-store, leaving 9% to use online, 7% telephone and 6% mobile app.||While the share of ordering may erode in-store transactions, online ordering will not come close to surpassing in-store ordering.|
|Delivery was 16% for prepared foods prior to Covid-19. This will increase as consumers were forced into online ordering due to the pandemic.||Once again, online delivery gained traction over the past 12 months as more aggregators joined retailers. However, the first choice, by a longshot, will still be in-store purchasing and selection.|
In 2021, the effects of Covid-19 will continue to linger throughout the year, and we will likely not have a sense of the permanent changes coming until 2022. Still, the retail segment represents a strong area for foodservice/prepared food growth as both consumers and retailers remain in nearly perfect tandem.
If you are looking for a fresh strategy, please see our services for Covid-19 planning.
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