Panic-driven, stock-up shopping drove massive grocery store visit growth in the first few weeks of March 2020, leading the relatively strong performances of the same period in 2021 to pale in comparison, says a new report from Placer.ai.
The location analytics firm notes that, despite a year-over-year 28% drop in store visits the week of March 8, 2021, the outlook for grocery is much more positive than it appears at first.
“The large year-over-year declines are being driven by the massive heights that these same grocery brands saw in the early weeks of the pandemic when consumers were afraid of not having enough key items,” said Ethan Chernofsky, vice president marketing at Placer.ai in a blog post. “But 2021 is going to be mired in the unique challenge of trying to make sense of certain sectors in a world where year-over-year data could be heavily misleading.”
For instance, Chernofsky points to the case of two leading grocery retailers: Albertsons and Publix were down in store visits 34.6% and 20.3%, respectively, during that week of March 8 — the worst weekly year-over-year mark either brand has seen since Placer.ai’s dataset began in 2017. Yet, when looking at the same brands compared to the equivalent week in 2019 — two years ago — the picture shifts dramatically with Albertsons down just 0.3% and Publix up 0.8%.
“Not only is grocery not in a weak position, it’s actually gaining momentum even in the shorter term,” said Chernofsky. “Looking at week-over-week visits for these same chains shows that most are seeing consistent growth with the primary cause of declines coming from severe inclement weather in late January and early February in specific regions.”
Placer.ai’s report notes that top grocers are “actually trending in the right direction and could be heading into a period of unique strength,” when all variables are taken into consideration. Add in some cultural changes — more flexible work schedules, longer shopping trips and bigger basket sizes as well as more vaccinated shoppers — and grocers may actually end up outperforming 2020 this year.
“While COVID’s health effects seem to be dissipating, the economic consequences will last far longer,” said Chernofsky. “This should buoy grocery as it provides a cost-conscious alternative to eating out. Additionally, greater flexibility in work from home should allow more people to shop when they want, enabling them to have longer visits driving larger basket sizes.”
