COVID-19’s Impacts on Food Shopping: How We “Source” Today
In years past, Hartman Group reports on consumer grocery shopping behavior (for example, Food Shopping in America 2017) nearly always had the word "shopping" in the title: this was, of course, prior to the COVID-19 pandemic, which has introduced unprecedented disruptions to how consumers "source" their foods, notably driving them to include online options (even if they'd never tried them before). COVID-19 has also introduced consumers to disturbances in the supply chain, made changes to how they plan their food shopping trips, and impacted how they physically move through stores while simultaneously interrupting restaurant dining.
Consequently, our new report, Food Sourcing in America July/August 2020, in both title and analysis takes a broad view of how consumers "shop" today and includes insights into the full landscape of where consumers source their foods from. Perhaps not too surprisingly, one of the primary insights from the study lies in the need for safety and security as a fundamental driver of consumer food sourcing decisions. During the pandemic, consumers are primarily focused on protecting themselves and their family members from exposure to COVID-19, an imperative that shapes every choice they make about sourcing food.
Whatever their view on safety, each consumer assesses risk differently based on where they live, household vulnerability, available shopping options, and overall risk tolerance, so there exists a broad array of approaches aimed at mitigating risk. These range from the use of a mask and hand sanitizer to shifts in who shops and when, how often, and where they shop.
Despite endeavoring to make fewer food shopping trips, consumers continue to rely on a broad range of channels, with each catering to specific needs based on trip type, category selection, experience, or safety. Grocery and mass channels are used most frequently, but channels like club, specialty/natural, and online cater to consumer needs around stocking up, procuring specific harder-to-find items, and avoiding stores entirely.
As seen in Figure 1, when it comes to overall engagement with channels and frequency of use, while consumers may have particular channel preferences for these different needs, they are now more likely than ever to stock up at smaller retailers. Figure 1 shows penetration by channel for past three months (P3M), past 30 days (P30D), and past seven days (P7D) on the left side of the chart and channel use and frequency compared to six months ago on the right. Figure 1 highlights how, despite sweeping changes in shopping that have occurred, use of channels resembles prior years — but smaller channels have gained in reach since our analysis of the Food Shopping in America 2017 report.
Figure 1: Food Channel Engagement and Channel Use Frequency
Source: Food Sourcing in America July/August 2020 (click to enlarge)
With regard to the left side of the figure, we see gains in P30D penetration among some of the more specialized food retailing channels. We redefined some of the channels this year, so we couldn’t show precise trending, but we do see gains for dollar, discount, and, of course, online-only retailers as well, while grocery has not gained in penetration. Related to the grocery channel, it’s worth calling out:
• Shopper penetration within the grocery channel was already high to begin with. Grocery stores are ubiquitous and most who might shop one already did.
• In terms of shopping frequency, while all channels gained some shoppers and lost some, more specialized channels see net gains in the change of frequency vs. six months ago. (Note: Food Sourcing 2020 was fielded in early August 2020, so “six months ago” was deliberately a comparison to patterns that existed immediately before the pandemic.) For the grocery channel, the 31% of shoppers who say they shop the channel less and the 31% who shop it more create a wash in terms of frequency gains or losses.
• We believe specialized food channels gained frequency due to some very specific ways they are able to cater to pandemic shopping needs (e.g., smaller formats feel safer, some retailers offer bulking up at reasonable cost, premium/quality feels safer). Grocery stores serving a wide range of needs may be finding it hard to be seen as excelling in any one of these pandemic-relevant areas. In fact, when we asked whether each channel meets their needs better, worse, or the same as before, more specialized channels got higher “better” ratings than grocery.
While the most used channels (grocery and mass) remain the same when compared to data from our Food Shopping in America 2017 report, shifts in shopping priorities and behaviors during the pandemic have resulted in changes to how consumers utilize and perceive various retail channels. While shoppers are striving to make fewer trips overall, there has been no change in the breadth of channels that they visit. They therefore appear to be more focused on spreading their trips across channels in order to continue getting the particular benefits they derive from each. In an effort to cut back on the number of shopping trips they make, while consumers continue to rely most heavily on club, grocery, and mass channels for bigger stock-up trips, they are also stocking up today at smaller retailers who appear to have made shoppers feel more comfortable in their stores in terms of core needs.