What’s In Store for the Grocery Industry in 2022

According to the KPMG Consumer Pulse Survey, while industry estimates anticipate grocery sales to grow approximately 2.7% in the year ahead, consumers are more optimistic about their spending levels. While challenges like COVID-19 and labor shortages have turned business into an uphill battle, the industry has responded with expanded delivery and online services, contactless checkout, and new product selections that broaden consumer options, streamline shopping experiences, and help protect grocers against unexpected disasters in the future. We predict that grocery stores will build on last year’s initiatives, get creative with customer service, and diversify supply chains. Here’s what we see happening: Omnichannel extends its reach. Omnichannel shopping is a way of life now, and we expect online purchases to become a larger percentage of grocery sales. In response, stores will refine and streamline their online operations while laying the foundation for offering more services and products across all channels. Stores may also launch browsing and buying services via other communications technology, such as text and social media. Delivery times will shrink as online orders grow and more grocers partner with companies such as DoorDash. Stores get personal. Along with omnichannel shopping, customers are expecting more and more personalized experiences. To keep consumers happy, grocers will start with localized marketing and product selection and beef up loyalty programs with customized perks, such as digital coupons, lifestyle articles, and flash sales. Stores will employ digital audits to maintain a mix of localized and enterprise-wide brand standards. Along with increased personalization, grocers will fortify their data security to maintain consumer trust. Sustainability takes center stage. Shoppers increasingly care about sustainability and want the companies they support to do the same. According to a recent BCG survey of 3,000 consumers, “87% said companies should integrate environmental concerns into their products, services, and operations to a greater extent than they have in the past.” Grocery stores will respond to the market’s demands by continuing to offer reusable and recyclable bags and expanding their selections of sustainably sourced and manufactured products. Payments become pain-free. As we continue to deal with health concerns and shoppers are more pressed for time, they’re looking for fast, touch-free ways to buy. Frictionless payment options like smart carts and scan-and-go will become more popular. Most grocers will not eliminate cashiers altogether, like Amazon’s “just walk out” stores, but other pain-free payment innovations will emerge, such as customer pickup counters, ordering kiosks, and drive-through pickup. Supply chains are no longer the weakest link. As traditional supply chains have proved vulnerable to market shocks like the pandemic, grocers will build more robust operations. Companies are employing temporary warehouses and keeping larger inventories of basic products where possible. Some are considering automated micro-fulfillment centers to support online purchases and lower the cost of online processing. Data analytics will also help grocers predict demand and stock shelves accordingly. Finally, stores will continue diversifying their supplier base and looking for a better selection of substitution options when some brands are unavailable. Store layouts evolve. As online shopping has grown, stores are looking for ways to attract shoppers to their bricks-and-mortar locations. They’re shaking up the layout to highlight store brands and specialty items near the center. They’re also dedicating real estate to curated product selections, such as vegetarian and vegan items, organic goods, international merchandise, and exclusive items from local businesses. Some grocers will expand social areas, such as coffee shops and bars. Grocers rethink labor strategies. The labor shortage rages on. Grocers and other companies with large hourly workforces will get creative to attract and keep good people. They’ll add perks, such as free coffee and snacks along with higher wages and more flexible schedules. Savvy businesses will also lean on checklists and digital audit applications to increase training effectiveness, improve operational efficiency, and maintain brand standards with a leaner team. Digital checklists will help grocers keep customers and employees safe while making their work easier and freeing managers to focus on the business. Learn more about digital checklists and how they help manage the labor shortage here. Growth and innovation go hand-in-hand. Regardless of what 2022 has in store for the industry, there’s no doubt that grocers have recognized the value of innovation and will continue to evolve. As they transform their businesses and the market, we’ll see new ideas, technology, and programs that will serve shoppers while helping grocers thrive for the long run.

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