Celebrate today, yes, but...

When I look at the headlines of what's happening at retail, it looks like this year, like most, will not be immune to change. While inflation is softening (finally), consumers will continue to make shifts in order to best take care of their families and finances.

"Asked how they were dealing with the higher prices, 57% of respondents said that they were buying less food, 52% said that they were buying less expensive store brands, and 48% said that they were buying less expensive national brands. Thirty-seven percent of respondents said that they were shopping at less expensive grocery stores".¹

Our collective experience over the last few years created trends

The last few years have also given rise to new routines and new consumption patterns. In a recent article, "Where are Consumers Heads - and Wallets - This Year?" two trends jumped out that highlighted opportunities at retail:

"With consumers refocusing their priorities during a stress-filled decade, Euromonitor emphasized the emerging importance of short-term buying approaches that often include surprise-and-delight items. Euromonitor’s experts recommended that businesses create campaigns targeting special occasions and offer instant gratifications that can still fit within budget constraints."²

The other day CODA, our DE&I Council was joined by Ginger as well as Our House, Working Families ERG for a panel discussion to help our company's parents and those that lead them. Here are some themes and suggestions that emerged during the conversation.

Being a parent provides us with some of life’s most precious moments, but it also can present challenging ones as well. For working parents, juggling responsibilities at home with a career can certainly be stressful. As we approach another school year and many working parents transition back to the office, the family dynamic may be changing once again!

The other day I went grocery shopping. I took a small cart and began my usual path through the store. I didn’t find Mandarin oranges, so I asked a helpful clerk if they had any. He mentioned that while there were on promotion the next day, but had not arrived, citing supply-chain issues. I continued on with my shopping. At check out, I was presented with a bill that was higher than expected. ~ By a lot! I was aware we are experiencing price inflation but was completely caught off guard.

In fact, we are seeing the highest inflation in years. Currently, the fast-moving consumer goods (FMCG) inflation in the US is at 6.8%¹. While the drivers of inflation are complex, it does make sense that prices are increasing when supply-chain issues and unprecedented labor shortages are straining the system.

Have you noticed, it seems like everyone has a new pet. On Facebook, a show of hands in any social group proves many caved and bought a pandemic puppy. Comments range from hell yes, to huge excitement surrounding the new fur baby (and a million pictures). Some raise their hands with some embarrassment (with pictures and pup names also included).

"During the COVID-19 pandemic, nearly one in three of Americans adopted a pet, according to the Insurance Research Council’s October 2020 report and 85 million families own a pet." ^1. In 2020, the pet category market size was $104 Billion. ²

So why are we, as SAS Retail Services, writing about the uptick in the purchase of puppies? At retail, the pet category is a complex category with multiple manufacturers, much variety, many, many SKUs. It's a category that can be quite profitable for retailers. It's also a category that, like those young pups, is HIGH MAINTENANCE. Here's a recent Supermarket News article about some of the challenges.

Keeping in stock is key and people just really like purchasing for their pets, so introducing a well-thought-through variety of products is also important. That's where we can help. Call us complex category crazy, but we love working these categories, and we are experts.

As the country opens up there will once again shift in consumption patterns. Restaurant patios will once again fill. And, as confidence increases, people will move from at-home alcohol consumption to out-of-home consumption.  According to a recent CNN article, alcohol sales fell for the first time since the pandemic began.

Consumers, with the change in routine and habits are making different choices than they were even eight months ago. There has been a definite shift where money is being spent and this requires grocery retailers to act and change up stores in response to that shift. I recently attended a Supermarket News industry webinar that highlighted some of those changes. Some were surprising, others were not. Here’s a broad sweep list:

We are Ready With a Playbook

This year may escalate unprecedented changes to the grocery retail environment. Grocery retail, despite having a boon year for growth had previously been challenged on many fronts and the current economic climate, among other things, may mount those challenged retailers.
Amazon’s stronghold in the e-commerce space was made even stronger by consumers sheltering in place and trip consolidation. Direct to consumer companies are also gaining market. Shopper behavior, which has been shaping store sets and sizes, may also see dramatic changes. Categories that were often an afterthought at retail have come to the forefront.

As with so many things, Millennials are making changes and redefining how we think about customer experience. Shopper types have changed and continue to evolve. The relentless rise of on-line continues to shape expectations at store level also. Shoppers and consumers are certainly more educated today and peer reviews play into expectations as well creating fluidity of loyalty. No doubt, exceeding expectations at the point of purchase is key in gaining market share, across all industries. For grocers, the opportunities to continue capture this demographic are rife. Most especially, the HBC (health and beauty care) and GM (general merchandise) categories have so much potential to introduce unique products that appeal.