Shoppers Test-Drive Target, Dollar General

While the coronavirus pandemic is profoundly influencing how Americans shop for groceries today, the long game is full of both challenges and opportunities. Soaring online sales, skyrocketing new adoption rates for delivery as well as flagging loyalty to both brands and store are dramatically changing the landscape.

According to a new survey from Kantar, 34% of consumers expect to try a retailer in the coming weeks “as the pandemic continues and forces shoppers to evolve routines to find products and fit budgets.”

Store inventory levels have certainly improved from the beginning of the pandemic, but many shoppers continue to encounter out-of-stocks on their favorite brands and are met with empty shelves in the hottest-selling categories. In its COVID-19 Commerce Snapshot, London-based Kantar found that when stores ran out of products, 41% of shoppers went without, while 42% went elsewhere.

Where are they going? Target was the retailer that consumers were most likely to try, at 20%, followed by Walgreens and Dollar General at 14% each, and Family Dollar at 13%.

They are also going online in record numbers. Kantar reports that 26% of consumers used a new online fulfillment method since COVID-19 began. Among all shoppers surveyed who used home delivery, 60% were trying it for the first time, 42% of consumers were newbies to curbside pickup and 39% tried in-store pickup for the first time.

Consumers also began visiting more stores once the pandemic hit, shopping at five grocery stores on average at the beginning of the COVID-19 outbreak, up one store from pre-COVID. While adding an additional store to the shopping mix may not sound significant, it translates to an additional 129 million retail trips the week of March 15-21, according to Kantar.

A surging unemployment rate and looming recession are further fueling shoppers to expand their repertoire, exploring both stores and brands they’ve never tried before. According to Kantar’s study, 24% of consumers are currently financially impacted by COVID-19—either laid off or can’t work. Meanwhile, an additional 32% put themselves in the next wave, anticipating more financial impact in the future.

When it comes to product purchases, C R Research in Chicago finds “brand loyalty has taken a back seat during the pandemic.” The majority of shoppers (76%) say they do not go out of their way to purchase their favorite brands. “Consumers aren’t too concerned with comparison shopping either. More than half (52%) are buying whatever is available, regardless of the price," C R Research said. 

Store brands have further benefited from the buying frenzy, posting double-digit sales increases across U.S. supermarkets, discounters and drugstores, the Private Label Manufacturers Association reported, pointing to Nielsen data indicating that first-quarter dollar sales of private label products across all retail outlets compared to the year before climbed nearly 15% during the first quarter, up $4.9 billion.

During the quarter, private label gained about one-third more in both dollar and unit sales than national brands, according to Nielsen. In all U.S. retail outlets, store brands grew 14.6% in dollar volume and 12.8% in unit volume, compared to gains of 11.5% in dollars and 9.2% in units for national brands.