Retailers

New Signs of Stabilization in Grocery

The ‘supply chain is working’ for Kroger, H-E-B, Stater Bros.
Photograph courtesy of Stater Bros.

A growing number of executives at major supermarket chains say the nation is one week to two weeks away from fully stocked stores (with the exception of hand sanitizer). Grocery data management experts also report stabilization. And increasingly, retailers are extending store hours and other services, crediting an improving supply chain and greater product availability.

In the most recent step toward normalcy, Stater Bros. Markets, San Bernardino, Calif., is extending its operating hours, beginning April 27, at all 169 locations. Its new temporary operating hours are 8 a.m. to 11 p.m. The stores will continue to offer an exclusive senior shopping hour from 7 to 8 a.m. daily.

H-E-B of San Antonio is also expanding its temporary hours of operation at stores across the Lone Star State beginning April 27. While other grocers, including Supervalu’s Stillwater, Minn.-based Cub Foods is adding 24-hour service at 11 stores. Select Kroger banners and certain Hy-Vee stores, which had reduced operational hours last month, have resumed normal hours, citing stocking improvements and increased opportunity for social distancing as reasons for the adjustment.

“The supply chain is working,” Rodney McMullen, CEO of Cincinnati-based The Kroger Co., told Good Morning America on April 22. “I was at a [Kroger] store last night, and we had plenty of toilet paper, a variety of meat products—beef, pork, chicken—all of those things.

“Within a week or so, you’ll be able to find [toilet paper] everywhere,” he added, although he noted that hand sanitizer could will take a little longer.

Ahold Delhaize CEO Frans Muller agrees. In a televised interview with CNBC on April 21, he said U.S. supply chains “look much better,” citing strong collaboration between partners, and estimated a return to normal conditions “in two weeks.”

Data management and analytics company 1010data, which has been tracking the impact to the food industry in the U.S. since the outbreak of COVID-19, further reports a stabilization in grocery.

It found that grocery store traffic peaked in the week following President Donald Trump’s March Oval Office address at 10% above January and February levels, while spending increased 80% in that same week. But as of April 23, 1010data said traffic has now stabilized about 30% below those averages. Spend is about 10% above average.

1010data, which tracks the credit and debit card spending of 5 million U.S. consumers, points to bigger purchases and grocery delivery as drivers. In January and February, grocery baskets using credit and debit cards averaged $48, finds the company. By the end of March, baskets were up 40% to $66 and continue to creep up.

“Some of that basket change is a mix shift due to the growth in online shopping,” according to 1010data. “Throughout 2019, Kroger’s average online order was 40% higher than in-store purchases. However, in-store purchases caught up in March 2020 and were only 10% below online levels.”

Grocery delivery is experiencing record growth, surpassing restaurant food delivery, continues 1010data. “The potential for permanent customers is also very real—in 2019, almost half of Instacart’s new customers used the platform again within the next three months, and more than 20% were still active customers within six months,” it said.

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