Two months into our global shutdown due to the coronavirus pandemic and one thing is pretty clear: there are some businesses that are inherently built to withstand a crisis like this one. One such industry: grocery.
Many households in America right now are visiting the grocery store more often than normal. For people that typically eat out but are concerned about eating food prepared by others, there’s a lot more cooking. And for families with children home from school, it’s probably noticeable how much more food you’re consuming as a household—not to mention toiletries, paper products and the like.
Strong Stock Prices
A quick look at the headlines shows that grocery chains and other consumer stocks are doing well. Stocks like Kellogg, Hormel, Clorox, and Campbell Soup come up on investor sites as smart buys, while grocer chain Kroger reported a 30% surge in sales during the month of March as Americans stocked up on food in response to the coronavirus outbreak. Publix, which isn’t publicly traded, reported a 16.1% increase in sales for first quarter of 2020 as compared to 2019.
The Future Could be Bright
As essential businesses, grocery stores remain open to serve the needs of consumers. While there are other challenges to deal with right now—shortage of stock and keeping employees safe, for example—the reality is that grocery stores are one of the businesses uniquely positioned to succeed during the COVID-19 crisis. Social distancing has become an everyday term and people are loading up on the things they need and eating at home more often. That isn’t likely to change for the foreseeable future.
SiteSeer: the Grocery Store Experts
If you’re in the grocery store business and looking for advice, you’ve arrived at the right blog.
Did you know that the majority of the SiteSeer leadership team all came from one of the nation’s largest grocers, where they led nationwide site selection and market planning, business strategy, and mergers and acquisitions? Our team has a combined 70 years’ experience in all aspects of grocery research, as seasoned analysts and modelers.
So, if you are a small neighborhood market looking to grow or a large grocer wanting to ensure you are well positioned for the future, there’s no better company to turn to for advice than SiteSeer.
Capitalizing on the Times: Planning to Grow
We’ve been singing the same tune since March 13: now is the time to plan.
It’s more natural to panic, we know, but what you should do is plan for the future so you can outlast your competition, take advantage of opportunities that are presenting themselves to you, and position yourself for success for the future.
Here is our advice on how to do so:
Lay out a 5-year plan.If you don’t have one, it’s time to create one. If you have one, it should change. There are opportunities coming with second-use facilities and junior anchor shopping centers. You’ll want to be ready to act so that you are able to seek opportunities, not just react to them.
Determine whether your locations are fulfilling their potential.We’re talking about capital investment—the four Rs:
- Remerchandise – Listening to your customers is more important than ever. If you’ve seen a big increase in revenues, you need to analyze where that’s coming from and how you should change your store (or if you should).
- Remodel – This might be less of a priority right now, but it’s still worth considering. Do you need to make your space more appealing? Prepare for your increase in customers with a bigger parking lot? Most importantly, do you need to add space for curbside delivery or instore pick up?
- Relocate – Is your current store network optimal? Would new locations or relocations maximize your sales and market share? Make sure your stores are positioned well for the future and if not, consider consolidating either through selective closures or selective closures + relocations.
- Resize – Make sure your sales square footage is appropriate for your business. Do you need to expand to serve a growing population? Is your shop space too large (e.g. could you serve the same customer base from a more economical space)? You might need to relocate, or maybe you need to add on or subdivide the space you’re in already.
Establish a good process for screening new sites.Grocery stores are the cornerstone for many shopping centers, and if the last two months has taught us anything, it is that here in the United States (and probably everywhere), people rely on grocery stores more than any other type of retail. If demand has exceeded supply these last two months, you should evaluate your capacity for expansion. It’s important not to do this haphazardly. The SiteSeer team can help you consider whether to grow through infilling your existing market or expanding into new areas.
Look at your e-commerce strategy.Having an online presence has never been more important than it is right now. No matter what the future holds, having an e-commerce platform in place will help you retain customers and gain new ones. If this is something you established pre-coronavirus, great! Let us help you fine tune. If you ignore e-commerce and had to scramble to put something in place when social distancing became a mandate, it’s a good idea to fix things so you’re better prepared for the “new normal” way of doing business.
A Temporary or Permanent Windfall?
Is your business experiencing a temporary rise in business or will it last for a long time? That’s a question none of us can answer for certain. The “new normal” that comes when businesses all reopen and there’s a treatment for COVID-19 might very well mean that restaurants recapture at least some of the lost revenue that is currently diverted to the grocery industry.
You can’t predict the future, but you can plan for it. Being poised to succeed in multiple potential environments will help you succeed—and hopefully thrive—in the long term.
Develop a Smart Growth Strategy
For now, the good news is that you’re in one of the few industries that is faring well through the COVID-19 crisis. But that doesn’t mean you should coast. Let the SiteSeer team help you develop a smart, data-driven growth strategy. Our software can help you evaluate sites intelligently and analyze the stores you already have, and our professional services team can help you evaluate markets and model growth for an uncertain future.
Contact us for a demo and to discuss how to succeed in the post-coronavirus world.