by John Ross / President and CEO of IGA
It was a long time coming, but somewhere around 2018, the lines crossed – Americans started getting more of their meals from restaurants, takeout and delivery than from meals they prepared themselves at home.
And it looked like, based on a 10-year trend, that grocery retailers would continue to see declines in “share of stomach” for the foreseeable future.
The share of stomach slide was gradual and insidious. Because the U.S. total population has been growing, the shift from “meals you make yourself” to “meals prepared for you by others” was masked, albeit slightly.
To grow a business when the population is growing – or when they are growing their interest in what you sell – is a golden experience. Our parents and grandparents felt this as Baby Boomers moved to the suburbs, had a lot of kids, built bigger houses and consumed more.
To grow your business from a shrinking pool of interested shoppers is hard work. Some days it may seem impossible, leaving retailers to wonder:
• How do we attract younger shoppers back into our store?
• How can we get all consumers excited about cooking at home again?
• And how can we compete for the increasing demand for meals you don’t have to cook, or meals brought to your doorstep?
And then along came COVID-19, and everything changed.
The trend between meals you make yourself and meals prepared outside the home flipped. We are now back at a 2002 share of stomach levels.
Young people spent an entire year learning to shop, cook and enjoy meals made at home. Sales of cookbooks have never been higher. Online cooking courses, cooking videos and reruns of Julia Child have set new download records.
This is not just in grocery. My alma mater, Home Depot, saw millions of Americans trapped at home choosing to finally get around to delayed home improvement projects. Americans learned new skills in home improvement, home networking and cooking.
The question is, what happens now? Are Americans exhausted with cooking? Will they get a COVID shot and rush back out to a seafood restaurant?
Or has a new generation of people learned a new way to eat? Has a generation of adults re-learned the joy of cooking?
IGA’s stores in China, where the virus has raged and then ebbed way faster than in the U.S., is giving some early warning signs – shoppers have started to go back to old behaviors. Grocery sales are being buoyed up only because many restaurant chains didn’t survive the pandemic.
The exception? Online. Online sales were growing before COVID. They accelerated by more than 50 percent during COVID. And they appear to be holding strong. And Chinese consumers – who run about eight weeks ahead of U.S. consumers due to the early start of the virus effects in China – appear to be cooking more at home but buying more of the ingredients and staples online.
Thankfully, with vaccinations rates increasing, and the total population finally edging toward herd immunity, we may be just a few months away from a dramatic reduction in COVID-impacted shopper behavior.
What are we going to do to ensure we keep the share we earned? What can we do?
First, and foremost, realize that COVID-19 accelerated grocery digital shopping perhaps by a decade or more in the U.S.
If you aren’t connecting to your shoppers electronically now, do it. It is not too late. Get online, find an e-commerce provider. If you need advice, reach out to your industry group, peer groups or IGA. We will help any independent retailer, regardless of whether they are an IGA, because we as independents need to grow as a class of trade.
Second, upgrade your offering. You received share during COVID-19, what are you offering to shoppers now that you didn’t before? Reinvest in your physical plant, upgrade your décor and signage; renovate restrooms, store exteriors, all the things you wanted to do for so long but put off. Show shoppers you appreciate what they have given by giving them back a better store.
Third, be honest with yourself about the print ad. Those younger shoppers we wanted – the ones that just learned how to shop and cook for themselves – are never going to read your print ad. And just sticking a digital PDF on your website won’t reach them either.
You have to be where they are and present information in the way they want to consume it, which means buying digital media, creating content and drawing them into your store.
I am advising you go online, give shoppers a better shopping experience and modernize your media. I would have given those same three suggestions before COVID-19.
I will still be giving those suggestions a year from now. The difference? If we act fast now, we have a better chance of keeping shoppers in our channel.