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Market Profile: Trucking, Technology Among Trends For Grocers Across Bluegrass State

Tod Griffin
by John McCurry, contributing writer

Tod Griffin, executive director of the Kentucky Grocers & Convenience Store Association, is among industry observers who believe the pandemic has accelerated the trend toward online grocery shopping. 

Many stores had been sitting on the sidelines, waiting to see what some of the bigger players were going to do. 

“A lot of our independent grocers may have waited another three to five years before making a decision. But it is here now,” he said. “You are either doing it, or your competitors are taking your customers.”

The pandemic has pushed other technologies to the forefront. Griffin cited increased interest in no-touch processing solutions. More online platforms are being explored, both for customer shopping and for working with vendors. 

Board meetings and manager meetings are now being held online, as well as meeting with sales people. Suppliers are seeing the savings in not having sales people on the road as much. 

“It will be interesting to see whether these trends will continue when this is over,” Griffin said.

Kentucky had a labor shortage issue prior to the pandemic. Unemployment was low, challenging grocers. Cushioning that to a degree was that the restaurant and hospitality industries were hit hard by the pandemic, so some of those people transitioned to the grocery sector. Still, Griffin said nearly every grocer continues to look for additional staff.

Another trend in Kentucky: shopping local. More shoppers are seeking out neighborhood independent grocers, local butchers and farmers markets. However, finding meat in stores was a problem in the spring.

“When the meat industry was having some shutdowns, and the prices were going up, that hurt a lot of our independents,” he said. “They were having a tough time keeping their meat prices in line with larger competitors. 

“As far as I know, there was no price-gouging going on, but there were a lot of independents that were very concerned about the price of meat and eggs. Fortunately, that has somewhat gone back to normal. The packing industry is starting to catch up again.” 

A continuing and concerning trend, Griffin said, is the shortage of truck drivers for industries across the board. He said companies have tried to attract former military personnel to trucking, with mixed success. This shortage could lead to more local sourcing of products. 

“We are fortunate in Kentucky that we are within a day’s drive of 75 percent of the country’s population. That’s why Amazon and UPS and other companies have located logistics centers here. They can ship very easily to a vast number of customers. That factor helps our retailers get product in also. We have a very good interstate highway system here as well.”

Griffin said he thinks some of the news media have exaggerated how much grocers have supposedly profited from the pandemic. 

“Obviously, their sales numbers are up overall,” he said. “But on the other side of it, they have had to reduce their shopping open hours. Many dedicated special hours for senior citizens. They had to implement and purchase the PPE for their staff, implement additional cleaning protocols. 

“In many instances, they have chosen to increase staff pay. All these things cost money. When shortages arose, a lot of them took a lesser profit margin on those products. These are things a lot of folks don’t think about.”

He added that the implementation of the new technologies is not cheap. That is something grocers have “rushed to get into place that they may not have budgeted for ahead of time.”

For more from the Kentucky Grocers & Convenience Store Association, click here.

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