Food and fun make a comeback
Diners are eating out more and returning to prepared foods in supermarkets. To capitalize on the trend, grocery chains have added food halls and other in-store experiences.
- James Cook
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Shopping for fun or just to get it done?
When it comes to grocery day, I don’t mess around. On Saturdays, I make a menu for the week, write up a shopping list and then head out on a mission. Don’t come home until the errands are done.
During the worst months of the lockdown, encouraged to spend as little time shopping as possible, many more consumers took on the “one weekly trip” approach. And because of this, foot traffic to mid-price and value grocers spiked. Meanwhile, experiential grocers saw shopper numbers slip.
Experiential grocery took a hit, but it’s coming back
Evidence of this is found in the dramatic foot traffic swings seen at two popular chains.
The perception of Kroger’s overall value and selection meant a spike in foot traffic, followed by an eventual return of stable foot traffic. But at Wegmans, renowned for its delightful and expansive prepared foods selection, there was a 32% dip in foot traffic, followed by a gradual return. Supermarket shoppers just weren’t in the mood for having fun.
Thankfully, we’re now back to having fun with our food, and traffic to experiential chains has returned.
Estimated chainwide foot traffic – % change, monthly
Eating out is in again
With dine-in options gone or limited during the worst of the lockdowns, many consumers weren’t allowed to eat out. And when the option returned, it took time for diners to feel comfortable inside restaurants again. National spending at dining establishments was eclipsed by supermarket spending in March 2020. This was a reversal of a trend that we had seen since 2015 and it took over a year for that reversal to reverse itself again.
Now, diners are going out with family and friends in bigger numbers. Since April of 2021 Americans are again spending more on restaurants overall than they are on groceries.
Spending at restaurants overtakes grocery stores in April
Online grocery went big and stayed there
The other dramatic swing was to pick-up and delivery. Total online grocery sales, which were only $2 billion in August 2019, had exceeded $8 billion per month less than a year later. Many shoppers have discovered the convenience of online grocery and found an ongoing place for it in their lives.
While online sales may have found a new higher plateau, I’m not much of an online supermarket shopper myself. I like picking out fresh produce, checking out new products, and impulse buying treats of dubious health merit.
Online grocery sales in billions
Chains betting on food fun
Many supermarket chains have bet big on the return of experiential shoppers like me.
- H-E-B opened its Main Streat Food Hall in Austin, Texas in August of 2020.
- Hy-Vee has been adding nail bars, shoes, clothing, and much more to its stores.
- In Chicago, Dom’s Kitchen and Market opened in Lincoln Park in June. It’s a smaller supermarket with an equal emphasis on prepared foods and everyday grocery items.
- Wegmans announced that it’s coming to Manhattan in 2023.
With its second location in the Big Apple, Wegmans is betting not only on the return of the supermarket experience but also of New York City. I think they’re both pretty safe bets.