Friday, April 17, 2020

Foodservice Retail Disequilibrium

Restaurants, Grocery Stores, C-Stores, and Dollar stores in densely populated urban centers are seeing stores that are either shuttered, soaring, or barely sailing along. All while in rural areas consumers are scared, stocking-up, and stock-piling, contributing to even greater disequilibrium according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.   
In new research from National Retail Solutions (NRS) shows dollar sales at urban stores surged more than 36%, and store traffic jumped nearly 8%. These number indicate that consumer were stocking up.  It’s also good news for restaurants that have been closed as it indicates traffic only jumped 8%, reflecting that in a battle for share of stomach those shopping trips were a necessity not a brand migration according to Johnson.
We all know that, densely populated inner-cities are among those areas to be hit the hardest by COVID-19. The consequences have already impacted, and in some cases redefined, every single foodservice sector. So, for the urban dweller, it has disrupted everything about their lives, but let’s specifically talk about how it has impacted the way they shop for their families. Temporarily gone are the days where Saturdays entailed jumping a few trains for a weekly stock-up trip to COSTCO.
Most inner-city neighborhoods do not have the luxury of having a supermarket or a supercenter safely and easily accessible. So COVID-19 has strengthened the relationship and dependency on the local C-store, bodega, neighborhood market. Bodegas are “essential” businesses and are more essential now than ever before for the residents of urban communities for their groceries, household products, OTC medicines, and pretty much anything else. In urban centers the study found that:
1.        Traffic is up: Transaction count up by 7.8%
2.        Dollar Sales Surge: Scanned Dollars up by 36.1%
3.        Tobacco and Alcohol greatest net dollar gains categories
4.        Disinfectants and Personal Protection and Hygiene top % dollar growth categories
In the non-urban core while the convenience channel remains open for business during the COVID-19 pandemic; new research found basket rings are smaller than usual. So, according to TrendSource, since the novel coronavirus began to spread across the United States, 64.4 percent of consumers have reported a decrease in spending in convenience stores.
All is not lost, a little more than half (51.7 percent) reported they expect their c-store spending to return to normal once the spread of COVID-19 begins to decrease, and 45.2 percent expect normal spending levels to return once the virus is eradicated.
Brand managers can refocus a unified brand messaging as the COVID-19 subsides and Governors begin ‘opening’ states back up.  If success does leave clues remember there brand messaging can be unifying, reinforcing, consumer touchpoint that drives sales while helping all of us get back to normal.
Invite Foodservice Solutions® to complete a Grocerant Program Assessment, Grocerant ScoreCard, or for product positioning or placement assistance, or call our Grocerant Guru®.  Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche. Contact: or 253-759-7869

Battle for Share of Stomach

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