COVID-19 impact on Grocery Business: Everything Needs to Know

grocery delivery solutions

COVID-19, Social distancing, Lockdown, Quarantine- these words have completely changed our lives. There was a time when people used to visit stores, restaurants, movie halls, hotels, pubs and many other places, but the outbreak of COVID-19 has stopped the whole world at once. Now our lifestyle patterns are wholly transformed.

Today, if we need something from a shop, we try to avoid physical visits, we want everything at our doorsteps, to keep safe and sound from this crisis. The pandemic has had a significant impact on every industry right from automobile to the retail grocery business, and experts think this is just the beginning. Keep this in mind, today; we will be discussing the Coronavirus (COVID-19) Impact on Grocery Business.

Before starting a thorough discussion, Let’s take a look at the current happenings in the Grocery retail industry-

First, forget everything you read before about COVID-19 impact on the grocery business because it is much more than we think or understand.

Let’s see what kind of business model grocery retailers followed before the outbreak of Coronavirus- from decades, the grocery business has been more focused on reducing its costs in SCM (supply chain management), they hardly focus on reducing risks. And the Coronavirus has proven this gap when the virus hits the world.

Read Also: How to Start a Grocery Delivery Service Business

Currently, the online grocery retailers follow the “Just-in-time” business model, where the customers can order online with one click or go to the store to pick up groceries. The reason for the staggering rise in online grocery orders is because consumers don’t have other options, they find online ordering solutions safe.

The challenge with the current model of the grocery retail industry is that online orders never get lower. However, the volume increases but the cost remains constant. Many users order online, but from different areas, hence it will keep the prices high. If grocery retailers want to continue in the future market, they undoubtedly require to transform their business model.

Moving on further, let’s take a glimpse about-

The current market of Online grocery retail industry

According to recent reports of– The global food and grocery retail market size was valued at $11.7 trillion in 2019 and is foreseen to grow at a CAGR of 5.0% from 2020 to 2027.

For instance, Walmart has increased its online distribution channel and began same-day delivery in 2019. Similarly, Kroger Co has expanded its pickup sites for online orders.

The food and grocery retail industry are seeing a vital rise in demand globally. However, the lockdown in various countries has affected the supply chain process to a great extent. Both brick-and-mortar and online merchants are facing challenges to meet the increased demand for food and grocery products.

Moreover, the income of grocery merchants has jumped up exceptionally in the first quarter of 2020. The prominent retailer Kroger Co. has announced a 30% increase in identical-store sales in March. The freaked shoppers have been clearing the shelves and putting pressure on the available workforce. As a result, critical retail suppliers have started hiring workers to keep up with the demand.

For instance, Walmart, Amazon, Dollar General, CVS, and Albertsons are hiring 1.5 lac, 1 lac, 50K, 50K, and 30K employees, respectively, to serve their customers quickly.

Now let’s take a look at-

What challenges grocery retailers have faced during COVID-19?

Weak supply chain management

week supply chain management

Grocery retailers have witnessed a massive loop in their supply chain management process. Due to the pandemic crisis, people avoid physical visits to purchase anything, instead of that they prefer online ordering. The sudden increase in online demand has left the grocers stunned as they do not have proper workforce and resources to manage the orders. Moreover, delivery slots become congested, and it results in a shortage of deliveries.

Limited Workforce

limited workforce

Before the pandemic, grocery stores had a set number of the workforce as consumers used to go to stores, order their items and take the deliveries with themselves. But now, after the pandemic, the whole scenario is changed. People order their groceries online, and grocery stores do not have sufficient human resources to complete their demands. COVID-19 has put a significant impact on jobs in the grocery industry, as in the USA, the top companies from the food and manufacturing sector posted more than 750 jobs last month.

A massive change in Consumer behaviour

consumer behaviour

According to recent reports, a vast and surprising difference has been witnessed in consumer purchase pattern. To make themselves personally protected from the virus consumers are now preferring online platforms to order their required items.

So, what you think about the future of Online grocery industry?

During this pandemic, online grocery services have emerged as one of the most helpful solutions for the people. Consumers are now starting to cope with the new realities; the pandemic has taught. According to multiple surveys made on the USA shoppers, experts have seen the following results-

  • 70% of people are now doing proper planning for their grocery purchases.
  • 30% of customers prefer to visit only a few selected grocery stores.
  • 60% of users found online grocery shopping safer and sounder.

Big giants like Walmart, Kroger, Instacart, and BigBasket already have a reliable and trustworthy image in the eyes of consumers. Users are relying on their services as they offer hygienic and safe services during this crisis. Experts said that this online pattern is healthy for the present situation and it will be continuous for more upcoming years, as nobody knows when the world will get rid of this pandemic.

So, what are you thinking of-

Start investing in On-demand online grocery business and give your business a new face of success. For starting your own business, you require an application and a website, and for that, you need to consider the following points-

  • A practical idea
  • Detailed Market research
  • Competitive Analysis
  • Ideal Business Model
  • A robust app development team
  • Excellent features
  • Outstanding UI/UX designs
  • Best Tech stack
  • Sound Marketing

To learn more about On-demand grocery solutions or grocery app development, visit our website or contact us for a free consultation. Stay tuned for more insights from different industries.