As many non-essential retail assets, including restaurants, were ordered to close to in-person services during the height of the COVID-19 pandemic, grocery stores began to see an influx of customers. A recent report from Placer.ai shows that this trend might be here to stay as grocery stores are still seeing heightened demand from consumers.
The report, “Grocery Deep Dive” analyzes national grocery trends over the past two years, and shows that most recently in the last week of August, the grocery industry saw visits grow by 13.3 percent compared to the same time the previous year.
The report also shows that consumer traffic picks up in the weeks preceding a COVID-19 wave. For instance, while cases peaked nationwide during September, grocery visits peaked in August. Towards the end of September, when the fourth wave receded, grocery visit growth also slowed down, with visitor traffic falling from 11 percent year-over-two-year growth in August to just three percent year-over-two-year growth in September.
“The loyalty generated and the renewed appreciation for home cooking could drive an extended period of strength for leading players in the sector. Visits didn’t just rise as COVID cases did,” the report states. “Instead, late October has seen a significant increase in year-over-two-year visit metrics for the wider sector. The clear conclusion is that the short term strength created by the unique factors present in 2020 have generated a far longer term trend that is continuing to drive visits to brick and mortar grocery stores.”
While grocery visits have increased nationwide, some regions of the U.S. are seeing more traffic than others. According to the report, states in the northwestern, southeastern, and northeastern portions of the U.S. saw double-digit increases in foot traffic, while states in the southwest, mid-Atlantic, and midwest saw moderate increases. In the northwest, grocery visits to Montana were the highest at 21.9 percent, while Washington, Idaho, and Wyoming all saw increases between 11 and 17 percent as of the third quarter of 2021. Meanwhile, Southwestern states like California saw a slight increase at approximately 5.2 percent year-over-two-year.
Consumer traffic increases were also dependent on grocery store chains. For instance, Acme Markets, in the northeastern U.S. saw the largest increase at 32.7 percent, while nationwide retailer Whole Foods Market has seen a 10 percent decrease in visitors over the past two years. According to Placer.ai, this suggests consumers overall are more likely to visit local grocery stores, with regional stores overall faring better than their nationwide competitors.
Despite increased grocery traffic over the past two years, the report shows that dining out also picked up after initial closures. Grocery shopping continued to be the preferred option among consumers. However, the two retail assets shared a similar trajectory over the two-year time span and generally showed increases in consumer activity during the same months. Most recently, from September of 2021 to October of 2021, dining activity increased by eight percent while grocery shopping activity increased by seven percent.
“Grocery and dining are not necessarily inversely related. More surprisingly, grocery and dining visits also showed a loose correlation, suggesting that restaurant and grocery success are not inversely related. In October, as COVID cases declined, dining visits saw a sharp uptick when looking at year-over-two-year growth numbers. Yet, instead of declining, grocery visits rose in this period as well. This may not only offer optimism for both sectors, but also open up opportunities for more interesting interactions and partnerships between them,” the report states.
These trends are anticipated to continue, and consumer habits overall are returning to normal, according to the report. Weekday visits, as opposed to weekend visits, have increased nationwide and consumers have also returned to lengthier shopping times as opposed to quicker shopping times over the course of 2020. Median visit duration dropped by 2.4 percent in the third quarter, when compared to the same time frame in 2020. Year-over-two-year data also indicates that visit length has more or less returned to pre-pandemic shopping norms.
“The rise in weekday visits may reflect a change in how consumers view the weekend vs. weekday distinction since the pandemic. This is a significant takeaway for grocers, enabling both new types of offerings and indicating that incentivizing the continuation of this behavior could drive a significant win/win for grocers and their customers,” the report states.