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Below is a complimentary excerpt from a research note written by our Consumer Staples analysts Howard Penney and Daniel Biolsi. If you are an institutional investor interested in accessing our research email sales@hedgeye.com |
C+R conducted a survey of 2,012 consumers in late March to measure how their shopping behavior and budgets have changed. 73% said they were making fewer trips to the grocery store down from an average of 2.3 visits per week to 1. Kroger (KR) recently said consumers rarely visit anymore to pick up the night’s dinner.
At the same time, the average weekly grocery spends increased from $159 pre-COVID-19 to $184.
- 44% of the respondents said they were using more restaurant delivery, meal kits, or grocery delivery.
- 60% said they had anxiety or were fearful when shopping at brick & mortar grocery stores.
- A survey conducted by the International Food Information Council in early April found that the #1 concern from food shoppers was the health of other shoppers (42%).
The majority of consumers are clearly not looking to visit grocery stores unnecessarily. Yet CNN published an article on Sunday titled “Experts say it may be time for grocery stores to ban customers from coming inside because of COVID-19.” The experts cited turn out to be union officials, some worker experts, and some small grocery owners.
I would note that it would be near impossible for grocers to pick all the items for shoppers at current staffing levels, grocery delivery is already maxed out, and many stores do not have the digital capabilities to offer curbside pickup. The grocery store has become the most essential of stores in the current COVID-19 environment.
It would seem that the grocers need to do more to make their customers feel safer.
Food retailers, including Kroger, have cited the increased costs in the current environment to stock the shelves and keep employees and customers safe.
