Why Grocery Stores Are Headed For "Unique Growth" in 2021

The grocery sector continues to charge ahead, with major chains logging consistent weekly growth despite a relaxation of COVID-19 shutdown orders across the country.

A new report from Placer.ai notes that while grocery was a strong performer during the pandemic (thanks largely to its apt categorization as an essential retailer), the overall data picture is a bit more complex than first meets the eye. The big reason? Year-over-year analyses—typically incredibly useful tools to judge factors like seasonality and brand strength over time—don’t tell the full story.  

The week beginning March 8, 2021, for example, shows grocery visits are down 28% year-over-year, according to Placer.ai analysis. And what’s more, leading grocer Albertsons or Publix were down 34.6% and 20.3% respectively over the same period in 2020, marking the worst weekly year-over-year mark either has seen since Placer.ai began logging such data in 2017. But when you compare those numbers against performance during the same week in 2019, Albertsons is down just 0.3% and Publix is up 0.8. And this year, both chains are showing consistent week-over-week growth, according to Placer.ai data.

Why? “The large year-over-year declines are being driven by the massive heights that these same grocery brands saw in the early weeks of the pandemic when consumers were afraid of not having enough key items,” the report states. “This panic-driven, stocking-up-oriented shopping drove massive visit growth in the first few weeks of March 2020, leading the relatively strong performances of the same period in 2021 to pale in comparison. And this can lead to significant mistakes….Not only is grocery not in a weak position, it’s actually gaining momentum even in the shorter term.”

The key takeaway, Placer.ai analysts maintain, is that grocery is headed toward a period of “significant long-term potential appears,” with top grocers potentially heading into a period of what the firm terms “unique strength.” 

“While COVID’s health effects seem to be dissipating, the economic consequences will last far longer,” the report notes. “This should buoy grocery as it provides a cost-conscious alternative to eating out. Additionally, greater flexibility in work from home should allow more people to shop when they want, enabling them to have longer visits driving larger basket sizes. These factors among others should give the grocery sector an extended lift.”