The COVID-19 crisis has brought with it a new norm for many of the activities we have been accustomed to in our daily routines. For example, grocery stores are experiencing empty meat displays on a daily basis. Certain products are flying off the shelf faster than retailers can restock. Shoppers are having to wait outside of the store to provide ample physical space between shoppers in the store. Retailers are finding that what was a slow seller is now a top seller in their stores. Shoppers everywhere are being told to practice physical distancing.
All of this is creating an enormous surge in the adoption of grocery e-commerce across the country. Consumers who have never used online ordering and delivery for groceries are now jumping on the bandwagon. There is strong reason to believe this will drive permanent changes in consumer behavior going forward. Food retailers need to be ready to adapt to these changes and adjust their business models accordingly.
Unfortunately, grocery chains are having a difficult time keeping up with the demand, and there are long waiting times for deliveries. Some consumers are experiencing delays of a week or more. This has caught the grocery chains by surprise and many chains are now hiring staff to meet the demands during the COVID-19 crisis.
To help meet the demands, many chains are hiring new employees to clean, restock, shop and deliver groceries. Not only food retailers, but, throughout the supply chain, companies are in a hiring mode to keep up with the demands, from food manufacturers to distributers to delivery services. All of this is being done to ensure that the food supply chain remains intact for retailers and consumers.
Meanwhile, food suppliers are stepping up efforts to protect their employees while consumers are stocking up their pantries during the COVID-19 crisis. In addition, there is a huge focus on employee health and safety. Companies are adjusting leave policies to accommodate paid sick leave. For those at work, physical distancing is practiced by staggering breaks and very strict food service guidelines are being enacted including frequent hand washing.
As more and more states and cities are implementing “stay at home” policies across the country, consumers are concerned about the available supply of food products. In reaction to these changes in consumer behavior, many food manufacturers and suppliers are beefing up and revising their supply chain capabilities to meet higher demand. In the near term, instead of focusing on the hospitality industry, manufacturers are shifting their focus to retail grocery.
For now, the key is to ensure we are all practicing physical distancing to keep the workforce healthy. This will allow the industry to have the necessary manpower to staff the supply chain in order to deliver products to retailers and consumers. Manufacturers and suppliers feel confident the temporary changes that they have made will keep the food supply chain intact.
With the changes that are occurring in consumer behavior, convenience store retailers need to also be prepared for any changes that may impact their ability to keep their stores stocked appropriately. As always, it’s a fine balance between not ordering enough vs. ordering too much inventory. But, what if there is a breakdown in the supply chain for certain products? How will stores be prepared for such an event? Food retailers need to consider reviewing their technology and processes to ensure they are ready for the lifestyle changes that are result of this crisis.
A great example of this may be occurring this week in real time. Instacart employees are threatening to strike because of complaints regarding unsafe working conditions and health benefits for their employees. Amazon may be experiencing the same threat of a strike as well. If these occur, the last mile of the supply chain will be broken, thus impacting the retailers and consumers which can have a ripple effect.