Three of the nation’s four largest supermarket operators — The Kroger Co., Albertsons Cos. and Publix Super Markets — are expected to be “winners” in 2021 when it comes to store visits, according to location-based retail foot traffic specialist Placer.ai.
All three retailers — grouped in a category dubbed “traditional grocery” — already turned in “a huge year” in terms of customer visits for the first 11 months of 2020, according to Ethan Chernofsky, vice president of marketing at Israel-based Placer.ai, which has U.S. offices in Los Altos, Calif.
In a blog post last week, he reported that store visits from January to November rose 5.3% year over year for Albertsons and 0.7% for Kroger, while Publix saw just a 1.7% decline despite a heavy presence in Florida, one of the hardest-hit states in the COVID-19 pandemic. Industrywide, grocery retailers have generally seen a drop in store visits but a rise in average transaction size.
“Yet this is only a small piece of the puzzle,” Chernofsky explained about the three grocers. “While their respective overall visits were impressive enough, looking at the period between June and November saw visits up for all three year over year. And the situation was even better because the pace of visit growth actually increased as the year went on.”
What’s more, Kroger, Albertsons and Publix have seen “more valuable visits,” Chernofsky noted. Visit duration for the three retailers climbed 7.1% year over year, on average, for the June-November period, “indicating jumps in basket size,” he said. Publix posted a 7.9% gain in visit duration for that time span, while Kroger and Albertsons saw respective increases of 7.7% and 5.7%.
"These are huge leaps, and when taken alongside visit growth, present a powerful picture. Not only are these brands seeing more visitors, but they are seeing those visitors spend more time at the locations, even while visits-per-visitor numbers decline for the same period year over year,” Chernofsky wrote in the blog.
“With periods of economic uncertainty often privileging grocers for their ability to provide meal-time value, and mission-driven shopping likely to linger at least through Q1 2021, it is hard to see any of these brands not producing very effective performance in the coming year,” he added.
A fast-growing competitor to supermarkets and other grocery retailers, Dollar General, also is deemed as a 2021 winner by Placer.ai. The deep-value retailer saw store visits from January to November jump 14% year over year and, even excluding December, the chain’s visits are up 2.9% for 2020 versus 2019.
Our final winner for 2021 is Dollar General. In 2020, Dollar General saw 2.9% more visits than in 2019, and that’s without counting December 2020 at all. Looking at January through November only, Dollar General saw visits increase by 14.0% year over year.
“And the trends driving this added success aren’t changing and may actually become more significant,” according to Chernofsky. “Firstly, Dollar General is not afraid to expand offline and has even moved upmarket with its new Popshelf concept. Second, the brand has a huge audience that may actually be expanding, with average household income metrics increasing as more audiences look to their value offering.”
That value offering includes a rapidly expanding brick-and-mortar presence, despite the pandemic. Through the first three quarters of fiscal 2020, Dollar General opened 780 new stores, remodeled 1,425 stores and relocated 76 stores. Plans call for the chain to close out the fiscal year on Jan. 29 with 1,000 new store openings, 1,670 remodels and 110 relocations.
“Even when COVID goes away, the economic uncertainty it caused will linger far longer, putting an even greater emphasis on the value Dollar General can provide,” Chernofsky added. “In the end, it’s hard to see anything but success for the brand in 2021.”
For the first 11 months of calendar 2020, grocery store retail sales are up 11.4% (unadjusted) from the prior-year period, according to the latest estimates from the U.S. Census Bureau. November grocery store sales rose 10.5% (adjusted) year over year. Overall retail trade sales grew 3.1% (unadjusted) for the 11 months and were up 7.1% for November.
“2020 was a uniquely challenging year for the world of offline retail, but it also presented an opportunity to truly appreciate its value,” Chernofsky observed. “The resilience of consumer demand and the ongoing ability of many brands to continue driving engagement and interest, even amid the pandemic, served as a huge testament to the retail landscape’s strength.”
Payment giant Mastercard said its Mastercard SpendingPulse tracker pegged holiday retail sales growth, excluding automotive and fuel, at 3% for the 75-day Oct. 11 to Dec. 24 sales period, compared with 2.4% for the traditional Nov. 1 to Dec. 24 period. Grocery sales climbed 6.8% during the Oct. 11-Dec. 24 time span. Online sales surged 49% and 47.2%, respectively, for both periods.
