More than 65% of retailers expressed that they are extremely or fairly confident in the strength of the overall economy going into 2021.
When asked how they anticipate sales to perform in the first six months 2021, 82% of respondents said they expect sales to either stay the same or increase during that time frame, with nearly half (46%) anticipating a sales increase of 1% to 9%.
Retailers were split pretty evenly on the subject of growing store count this year, with 54% planning growth versus 46% not. Still, moderate growth is in the cards for those who plan to open new stores, with 69% of those retailers planning to increase store count by 1% to 5%.
More than half of retailers (56%) plan to continue increased hiring in 2021, with the majority of those increasing the number of workers by 1% to 5%.
Although our survey was fielded in November before the announcements of a successful coronavirus vaccine, retailers were already feeling confident about the coming year. At the time, more than 60% of retailers surveyed said they expected to see a possible vaccine or downturn in cases by the second quarter of 2021.
To maintain the sales lifts that they experienced in 2020 due to COVID-19, grocery retailers will continue to expand many of the initiatives they launched last year as well as introduce more steps to make grocery shopping safer and more convenient for consumers. Top on the list of actions for 2021 are introducing or expanding online grocery/delivery and continuing enhanced safety measures (including masks and PPE, plexiglass partitions, social distancing), cited by 60% and 59% of retailers, respectively.
When it came to which product categories retailers expect to see the most success with in 2021, fresh produce, meat, center store grocery and frozen were all close at the top of the list.
Deli-foodservice and general merchandise were the categories retailers expect to be the most challenging in 2021.
More than half (56%) of retailers say they plan to alter or change their prepared food menus, with a focus on more grab-and-go and prepackaged items, for example. Another 36% of retailers say they plan to increase their prepared food offerings, while only 3% plan to cut back on prepared foods.
In 2020, 18% of retailers said that online grocery made up more than 10% of their sales. Just under 60% said that online grocery made up anywhere from 1% to 10% of total sales.
In 2021, almost a third of retailers (30%) say they expect online grocery to make up more than 10% of sales. Among all respondents, 22% said they did not offer online grocery in 2020; for 2021, only 14% say they will not be offering online grocery.
Plant-based sales continue on the upward trajectory that began pre-COVID, with 57% of retailers saying they expect the category to grow in 2021. Other anticipated growth categories include private label, vitamins/supplements and CBD.
Almost two-thirds of retailers surveyed say they plan to bolster their better-for-you positioning in 2021 in a variety of ways, most significantly by including growing/updating assortment (68%) and offering new products (64%), including plant-based, CBD, etc.
When asked which retail channel would be the biggest threat to their business in 2021, online retail was the No. 1 response, at 43%, followed by direct-to-consumer online channels at 29%. Rounding out the top five were dollar stores (11%), warehouse clubs (10%) and convenience stores (4%).
Millennials will continue to be the target demographic for retailers in 2021, with just under a third of respondents saying it’s the group on which they will most heavily focus their marketing efforts.
Among the most important social initiatives being undertaken by retailers in 2021 will be diversity in the workforce (57%), supporting local businesses/suppliers (56%), sustainability (55%), reducing food waste (45%), racial equity and justice (42%) and fighting hunger (35%).