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The pandemic prompted historic changes in shopper and retailer behavior. Themes such as remote work, checkoutless stores,
e-commerce and micro-fulfillment are poised to continue to disrupt the grocery industry. Grocers will have to reimagine their operations for a society that shops, works and lives more remotely and more digitally then ever before.
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Tyson Fresh Meats is the world's leading supplier of beef and pork. We deliver a variety of the best meat products with consistent quality, every time. With decades of industry experience, we put a high priority on expert customer service. We've worked hard to earn the right to be called the Beef & Pork Experts .
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What do gig labor, plant-based crab cakes and nonfungible tokens have in common? They’re all part of the big bet that grocery retailers are making now on the future of the industry. Two years after one of the most challenging events in world history, Progressive Grocer’s 89th Annual Report and The PG100 ranking
of the top food retailers in North America show that the nearly
$3 trillion grocery industry is in the throes of a different kind of transformation this year, one that involves not just new technology or consumer habits, but also the evolution of an industry’s identity.
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What should grocers be doing to drive growth amid constant change? Be smart about keeping employees healthy and happy. Be prepared to act fast on technology and food trends. Personalize everything, from curbside pickup coupons to store checkout belts to marketing texts so that the customer can’t help but be loyal. And prepare for more supply chain disruptions and higher costs. Other mega-trends impacting the industry now include …
As Progressive Grocer reminisces during its 100th year, we can’t help but be struck by common threads that have sustained this industry over time, including perennially successful practices and a few full-circle trends. Things like strong customer service, a robust and relevant product assortment, and store shopability and cleanliness never go out of style. Interestingly, some aspects of the grocery business that were more common a century or even 50 years ago are coming back, albeit in a different form (think in-store classes, indoor farming, and community events).
Old
Is New
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12 Themes
Driving Innovation
The pandemic era reinforced the importance of essential workers in grocery, and industry leaders will have to provide their employees with more support. Grocers are offering expanded
Employee
Experience
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The brick-and-mortar store has gained renewed importance as a means of differentiation and innovation, especially post-COVID. As we move forward, a tech-enabled shopping experience with robots and expanded checkoutless payment options will make life easier for both shoppers and retailers. Following the lead of independent grocers such as Choice Market, with its multiple checkout options, or Nourish + Bloom, with its highly advanced delivery bots, the sky’s the limit for how retailers can reinvent the in-store experience.
The Store
of the Future
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There’s no doubt that plant-based food products are improving in flavor and texture, driven by a record period of investment in companies creating sustainable alternatives to conventional animal-based foods. As options grow across categories and flexitarianism becomes commonplace, grocers are increasingly treating the plant-based segment as just another lifestyle choice by
Plant-Based
Planet
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During the pandemic, dining spaces in grocery stores shut down, forcing retailers to demonstrate their takeout, pickup and delivery prowess. Now, as COVID restrictions largely disappear and consumers return to dining in public places, grocers are taking steps to make sure that shoppers stay with them rather than defect to re-opened restaurants. Some of grocers’ strategies include offering transparent packaging, fare that looks like it was prepared in-store, diverse offerings from a range of cuisines, bundled products for meal deals, and delivery/pickup options, with heavy promotion of fresh prepared meals and meal bundles on websites and apps.
The Post-Pandemic Hot Bar
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Just because something can be delivered in 10 minutes, does that mean it should be? No matter how you answer that question, grocers that can offer only same-day or even half-hour delivery must manage customer expectations when it comes to bringing orders to homes. Among larger operators, Walmart and Kroger are busily building out their respective distribution/fulfillment infrastructures, guaranteeing faster delivery times due to the sheer number of facilities cropping up across the nation. Meanwhile other grocers are investing in a faster last mile as they look to enhance the overall e-grocery experience, and drive shoppers to use their services again.
Burgeoning
Q-Market
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of consumers believe that companies are responsible for protecting the planet and its people.
Source: Wunderman Thomson Intelligence
Food retailers are creating positive changes by actively nurturing healthier communities, fashioning more equitable workplaces and fighting against environmental damage. Ahold Delhaize USA has joined an advanced recycling initiative billed as the first of its kind in the United States. Walmart is asking packaging companies with innovative solutions to submit them online via a new portal. From sustainable store design to hyper-localization of assortments to climate-friendly supply chains, indoor farming, ethical retailing, greener packaging, upcycled foods, and diversity, equity, inclusion and belonging initiatives, grocery retailers are prioritizing purposeful retailing.
Purposeful Profitability
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Payment was among the first avenues for customer-facing, tech-enabled innovation at food retail, and the pandemic brought with it a more pressing need for touchless checkout options. Digital payment options like Apple Pay, Venmo and PayPal are being more widely accepted, and even cryptocurrency is making inroads at retail. Further, a wider rollout of computer vision cameras in stores could potentially give rise to technology that can recognize shoppers, scan items as they select them and even tie back to credit systems.
Checkout Reborn
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merchandising such products with their animal protein counterparts. The success of this strategy is undeniable: Record-setting plant-based sales growth shows no signs of slowing down.
As a majority of grocers ramp up their private label offerings, and with inflation showing no immediate signs of slowing down, shoppers are more than likely to continue their quest for these lower-priced items. While price will remain a consideration, consumers will also expect a solid premiumization of store-brand products, in common with national-brand offerings across the store. With studies finding that consumers increasingly expect retailers to take the lead on sustainability, private label packaging will also need to become more environmentally friendly.
Popularity
of Private Label
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Does anyone really believe that soon, very soon,
many Americans will be conducting a major part of
their lives in virtual reality? Walmart does, if several new trademarks filed in December are any indication. According to the retailer, it plans to make and sell virtual goods, including electronics, home decorations, toys, sporting goods and personal care products. Food retailers and brands taking the metaverse seriously understand that what the metaverse offers is another
way for them to create connections and community among consumers.
Welcome to the Grocery-verse
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It’s not what shoppers or grocers want to hear, but it seems like high prices will be sticking around as geopolitical upheaval continues, and as other contributing factors linger. Changes are accelerating to help
Inflation Nation
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Food retailers are reimagining the retail
media business model to seize the
opportunityin the depreciation of third-party
cookies. Consumer privacy concerns regarding
data collection have led to browsers such as Chrome removing third-party cookie functionality; Apple is
also changing the IDFA (identifier for advertisers) in the app store. These changes are contributing to a seismic shift in how companies acquire, retain and engage with digital shoppers, and grocery retailers are uniquely positioned to benefit from the changing dynamics of the digital media ecosystem. To capture the full retail media opportunity, grocers will need to ramp up capabilities as e-commerce footprints continue to grow.
End of the Cookies
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manufacturers and retailers keep a lid on costs, and grocers are also focusing on providing value to their shoppers. Having several tools on hand should prove useful even when prices come back in line and the situation is less acute. Value and price are longstanding purchase drivers through many economic states, after all.
Winning
Post-Pandemic
Grocery
CONCLUSION
Food and consumable
sales rose
post-pandemic
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92 companies saw sales increases, while 8 saw decreases
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Consumers kept pantry-loading and cooking at home post-COVID
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Adoption of
grocery e-commerce accelerated
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Several companies merged or were acquired
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New entrant
Gopuff doubled growth YOY
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A new era of
transformative growth
UNDERWRITTEN BY
By the PG Staff
Click on the chrysalises below to reveal
the trends in this year's PG 100
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Tyson Fresh Meats is the world's leading supplier of beef and pork. We deliver a variety of the best meat products with consistent quality, every time. With decades of industry experience, we put a high priority on expert customer service. We've worked hard to earn the right to be called the Beef & Pork Experts .
TM
benefits, higher wages, flexible schedules (including gig labor), tuition reimbursement, and child-care options. In addition, grocers are quickly learning that they need to support their workers by creating a culture of inclusivity, mental and physical wellness, and open, shared communications.