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January 12, 2022

Grocery Stories that Defined 2021

Ever since March 2020 and the panic buying triggered by the pandemic, it’s been a race to adapt for grocery stores. In 2021, grocery stores continued to respond to rapidly shifting consumer demands while navigating challenges created by labor shortages, shipping delays and supply chain disruptions.

These were the defining grocery stories and trends of 2021.

Dairy, Frozen and Center-Aisle Sales Remained Rock Solid

The pandemic instantly changed the way consumers shopped. And as people began eating more meals at home, sales for pantry staples and versatile ingredients surged. One of the biggest beneficiaries was frozen foods, which offer convenient, nonperishable meal solutions. In 2021 frozen foods remained in high demand, with sales of frozen seafood being up nearly 25% from the year prior, according to a report from Supermarket News.

Meat sales have leveled off somewhat after increasing by a robust 19% in 2020, but dairy sales remain higher than pre-pandemic numbers. Sales of sweet and salty snacks are higher, too, likely because of a combination of consumers wanting to treat themselves during their workdays at home and turning to snacks to replace meals due to cooking fatigue. Cookies, crackers, popcorn and candy all saw sales increase.

Deli and Bakery Sections Bounced Back

Not all grocery sectors benefited from sudden shopper demand in the wake of the pandemic. Deli and bakery sections notably suffered big declines, as consumers did more of their grocery shopping online or with curbside pickup. But both sections made up some ground in 2021, thanks in part to shoppers making more frequent trips to the store. In the first half of the year, fresh bakery sales were up 12.5% from 2020.

Deli sales, meanwhile, were up about 11%, with some of that growth driven by a nearly 15% increase in prepared deli foods – very welcoming news for grocery stores that increasingly see an opportunity to compete with restaurants for “share of stomach.”

Online Grocery Shopping and Quick Delivery Proved They’re Here to Stay

Online grocery shopping existed before the pandemic, but it had yet to reach the mainstream. Online orders accounted for just 3-4% of grocery spending before March 2020. Once pandemic-related shutdowns hit, more than 50% of shoppers began online grocery shopping, and according to new research from Acosta, many of them have become permanent converts. At least 20% of shoppers now say they shop for groceries online all or most of the time.

Meanwhile, businesses continued to compete to see which company can deliver those online groceries the fastest. Instacart and Uber both began offering faster, same-day delivery options, while DoorDash announced a new “ultrafast” delivery service in New York that boasts delivery times as few as 10 minutes. No mode of transportation is off the table: Walmart even began testing a drone delivery service in Arkansas, which promises to deliver groceries by air.

Labor and Supply Chain Shortages Take Their Toll

According to a November survey from the U.S. Chamber of Commerce, there were 10.4 million unfilled jobs in the country, which shouldn’t come as news to grocers. Food retailers have been especially hard hit by the labor shortages, and some chains – including Schnucks and Harris Teeter – were forced to reduce their hours as they worked around limited staff.

Meanwhile, major food manufacturers announced they were increasing prices due to supply chain issues and difficulty finding workers. Skippy peanut butter, Oreos and Doritos all saw price increases, while Ben & Jerry’s announced it would reduce its product line to focus on its most popular flavors. Industry insiders expect these headaches to linger for the near future, and it’s likely manufacturers will respond by continuing to offer products in fewer sizes and flavors.

Retail Space Solutions Provides Grocers Relief During Uncertain Times

With employees stretched thin at many grocery stores, their time is even more valuable than ever. Retail Space Solutions specializes in display innovations that ensure attractive, front-facing inventory and increase sales. They help eliminate false out-of-stocks while greatly reducing the time employees need to spend organizing inventory.

Our solutions touch every corner of the grocery store, from the dairy, meat and candy aisles to frozen food and produce. We also offer personalized site assessments to help each store address its unique needs. When you’re looking for premium quality solutions to create attractive retail display spaces, we’ll work with you to identify your goals and how and where products should be placed on shelves and displays in order to increase sales.

For more information on our solutions, visit www.retailspacesolutions.com or call 1-800-279-5291.