Supermarket Perimeter - December 2020 - 31

levels as restaurants, grocers witnessed similar challenges as state
MANY RETAIL GROCERY DEPARTMENTS saw a surge in demand with
and local mandates shuttered instore foodservice, self-serve and hot
the onset of COVID, and overall grocery sales were up nationwide.
food bars.
But not all departments thrived, and some suffered because of the
Food, beverage and household product online purchases were
hands-on nature of their products and services. Of these, none has
up more than half, which contributed to foodservice loss for those
been hit harder than retail foodservice.
businesses without the ability to offer this digital convenience as an
A new report from Arlington, Va.-based FMI - The Food Industry
option, according to the report.
Association, however, finds that despite the challenges it faces, retail
Two-thirds of the meals consumers make at home are prepared from
foodservice is well-positioned to compete for more of the total
scratch with semi- or fully prepared items to complement the meal.
foodservice pie going forward.
Retailers can be a solution for this growing segment of customers,
" Food retail business owners navigated state and local challenges
according to FMI.
to operations and adapted by redistributing labor across the store,
Additionally, the association's analysis found that nearly oneand foodservice employees embarked on their new roles maintaining
third less of shoppers are deciding what's for dinner on a daily basis
sanitation and supporting shelf-stocking during times of unprecedented
compared to 2019, offering an opportunity to help consumers meal plan
consumer demand for essentials, " Rick Stein, FMI's vice president of
a few days at a time or even for the entire week.
fresh, said in the report, The 2020 Power of
The pandemic continues to limit what restaurants
Foodservice at Retail, which was sponsored by
can offer for instore dining due to capacity
Hussmann Corp.
restrictions and consumers' wariness of dining
Almost at the beginning of the pandemic,
out, but carry out and pick up opportunities are
share of dollars spent at-home and away-frompopular.
home for food flipped, with food-at-home dollars
In addition, the study found that nearly 65% of
moving from 50% in February to 68% in April, and
shoppers say they focus a lot or put some level of
food-away-from-home dollars moving from 52%
effort against choosing healthy, nutritious meals
in February to 32% in April. Still, retail foodservice
when buying from grocery foodservice.
sales were down 17% March through July,
Reinvest in top-of-mind
according to FMI.
awareness
A growing category
Fewer trips were made to the grocery
Retail foodservice has been an area of growth for
store due to shelter-at home mandates. Food,
the grocery industry for several years, and 2019
beverage and household product online
was no exception. Leading up to the pandemic,
purchases were up more than half, which
dollar sales for retail foodservice overall
contributed to foodservice loss for those
Building a reputation for
(including beverages and other ancillary items)
businesses without the ability to offer digital
foodservice starts with
were up 3.4% and deli-prepared foods were up
convenience as an option.
stronger and more direct
3.1%, according to Nielsen.
To address these challenges, the report
communication with shoppers
This was based on slightly higher household
recommends three main things for retailers
engagement, at 94.3%, more trips, at 21 per
to keep in mind when plotting their retail
year, and a greater purchase size, at $8.04 per
foodservice futures:
transaction.
x Reinvest in Top-of-Mind Awareness
However, the pandemic fundamentally
x Building a reputation for foodservice starts
Emphasize convenient,
changed the growth trajectory of retail
with stronger and more direct communication
healthy meals
foodservice, much like it did for restaurants,
with shoppers
according to the FMI report. As retailers had to
x Emphasize convenient, healthy Meals
close self-serve buffets starting mid-March, dollar
High-tech solutions
sales for deli-prepared foods quickly declined.
Also central to any retail foodservice strategy: highlighting technology
Pre-packaged solutions were able to offset some of these declines, but
solutions.
sales decreased 17% during the pandemic period between March and
" Seventy percent of shoppers say the ability to order the food in
the end of July.
advance, whether via app, online or phone, would positively influence
" Throughout the pandemic, shopping patterns have been very
their decision to order from retail foodservice instead of restaurants or
different, with fewer but bigger trips, " the report says. " People were less
cooking, " according to the report.
likely to plan dinner one day at a time (26%) and more plan dinner a few
The analysis suggests the ease of ordering could be more seamless,
days at a time (46%) or lay out the entire week (29%). "
from separate apps or integrated apps with grocery ordering, for example,
Meal planning is closely related to eating more meals at home. The
as well as in-store pick up, curbside carryout and delivery options.
number of home-prepared dinners shot up from prior-year levels
COVID fundamentally changed foodservice businesses for both
to an average of five per week. Meal preparation increased across
restaurants and food retail. While certainly not at the same devastating
demographics and mixing items prepared from scratch with semi- and

3 main things
to keep in mind

1
2

3

KRISTINA BLOKHIN - STOCK.ADOBE.COM

supermarketperimeter.com

DECEMBER 2020 - 31


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Supermarket Perimeter - December 2020

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Supermarket Perimeter - December 2020 - 1
Supermarket Perimeter - December 2020 - 1
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