Surviving the COVID-19 Pandemic in Food Retail

In today’s economy, gaining insight and a better understanding of consumer behaviors and wants and needs and managing business operations and distribution channels efficiently and effectively is essential to achieving and maintaining a successful business in the food retail industry. It is evident in light of the impact of the COVID-19 pandemic and its associated shutdown on the economy globally.  

According to Daniela Coppola’s Statista 2021 article about the food retail industry in the U.S., from 1992 to 2020, grocery store sales more than doubled and grew dramatically – $759.57 billion in 2020. The drastic rise in customer demand for various products, customers buying more than they need, and hoarding contributed towards the growth of grocery sales.  

For instance, many customers turned to online shopping, deliveries, and curbside and store pickups to limit contact and interaction with others and maintain social distancing to minimize risks of exposure and spreading of COVID-19. It also motivated more grocery stores or supermarkets and businesses to focus and explore technology further and adopt an omnichannel retail strategy that provides customers with an integrated shopping experience and digital touchpoints by uniting their experiences from, for example, online mobile-browsing or brick-and-mortar stores.     

Key Insight

Grocery stores and supermarkets struggled to keep up with customer demands for products and could not maintain store inventory and keep items stocked on the shelves fast enough to keep up with growing demands. Consequently, this weakened the supply chain and caused distribution channels to change drastically.  

Distribution channels are critical in operating a business. Distribution channels enable organizations to provide goods and services to their customers. In other words, they consist of methods organizations utilize to deliver and supply products and services to customers.

A government sector’s supplemental nutrition program’s success is contingent upon authorized stores managing distribution channels such as manufacturers, wholesalers, and distributors efficiently to ensure specific inventory, foods, or items are available at the stores while open to the public for the clients or customers to be able to purchase and redeem their prescribed food benefits timely.  

The COVID-19 pandemic caused various disruptions in distribution channels. It triggered abrupt spikes in demand and forced businesses to operate with limited truck drivers and limited workforce due to illness, employee fears of working in crowded conditions, staff reduction, and short-term facility closures. When facilities such as warehouses and packing or processing centers had to shut down or close due to a COVID-19 outbreak temporarily, it created bottlenecks – products did not enter the distribution channels.  

Overcoming the Challenges:
As a result, as suppliers adjusted their distribution channels, packaging, and processing orders, it created temporary shortages in the inventory and availability of specific items and foods. Moreover, distribution channels provided grocery stores or supermarkets with the products they had on hand or comparable or the next best option available instead of supplying them with the specific quantities and products or items ordered for delivery. Additionally, customers had to adapt to the different availability of food, or products, fewer selections to choose from in the grocery stores or supermarkets because of the shortage in delivering the foods, products, or items.  

Furthermore, to adapt to the impact of the COVID-19 pandemic and its associated shutdown, the supplemental nutrition program expanded efforts to service and help accommodate its clients or customers by modifying distribution channels to provide direct distribution of available specifically prescribed formulas and eligible Nutritionals at designated offices. The department stocked inventory in their warehouse and utilized its in-house couriers were assigned deliveries to the designated office locations. The department’s communication efforts with clients or customers consisted of an educational campaign to inform, persuade, and promote the use of the supplemental nutrition program’s app as a tool to provide clients or customers with assistance in identifying eligible foods approved for purchase with their prescribed benefits, increase redemptions and sales, and improve their shopping experience at authorized grocery stores or supermarkets.

The COVID-19 pandemic and its associated shutdown have propelled the food retail industry to evolve and improve its processes. Grocery stores or supermarkets improved their distribution channels to keep up with customer demands and better serve their customers, meet and satisfy customer desires, needs, and wants. The omnichannel retail strategy enabled grocery stores or businesses to improve the customer shopping experience, provide more channels for customers to make a purchase, and integrated digital touchpoints, increase sales, and attain more availability.  

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