How COVID-19 is Affecting the Grocery Industry

by Natalie Tatum | Mar 30, 2020 12:00:00 AM

Almost every industry has been affected by the COVID-19 pandemic. Restaurants around the country are almost entirely operating on a to-go-only basis, the travel industry is at a standstill, and retail has gone completely digital with over 90 major U.S. retailers temporarily closing. While many industries are struggling, the grocery industry is seeing the opposite problem. 

For those working in the grocery industry, you don’t need the news to tell you how crazy day-to-day sales have been during the COVID-19 breakout and related hoarding buying habits (does anyone actually have toilet paper yet?). As grocers scramble to keep their shelves stocked, we can’t help but wonder what impact this will have on shrink once COVID-19 has passed. 

Normally, the average grocery store has more than 1,600 expired items on their shelves in the dry grocery department alone. Now that stores have sold through most of their inventory on shelf following the COVID-19 spike in sales, those expired items have mostly been cleaned out. What is the best way for grocers to put together a plan to maintain this new level of freshness before expired items pop back up in stores? Date Check Pro has the answer. 

What Stores Should Expect From Expired Food 

In times of stress like this one, buying habits obviously start to change. While customers once bought a few items to get them to the weekend, they’re now stocking up on anything and everything they can get their hands on. Grocers expect to sell out of the basic items like: bottled water, chicken, meat, non-perishables, canned goods, milk, bread, and eggs, as well as cleaning products like Clorox wipes and disinfectant spray. However, the introduction of “panic shopping” has shown a trend in more unconventional products being sold in mass volumes. 

According to data from Agilence’s grocery reports, items like Sharpies and printer ink have seen a 10,000% increase in sales. Date Check Pro was able to talk with Raoul Ricard, VP of Business Development at Agilence, about what trends grocers are experiencing and what changes they can expect to see in the coming months:

DCP: What data has been most interesting to follow?

Raoul Ricard: “We’ve seen noticeable waves in our grocery data but it changes from region to region – even county to county in some cases. Four weeks ago, it was business as usual. Like everyone else, we started to notice toilet paper & napkins flying off the shelves but starting this week we’ve begun to see the trend of ‘replenishment.’ Consumers are now already stocked up on the essentials but they are returning to grocery stores for perishables and the other items they didn’t necessarily buy enough of. Deli items for making lunches for school age children continue to be a necessity as time goes on with the pandemic. What’s really been interesting is the weekly change in behaviors as this progresses. From normal business, to stocking up (canned/boxed foods and paper products), to work from home and school set up (General Merchandise), to replenishment (lunch for the kids, apple juice, bread etc.), and alcohol maintaining its increase.”

DCP: What unexpected items are selling out or spiking in sales at a time like this?

Raoul Ricard: “We have noticed that items like school supplies are way up in most grocery locations because most consumers are trying to condense how many locations they are physically shopping at. Products for homeschooling, such as notebooks, pens and pencils have dramatically increased in sales.”

With store inventory essentially wiped clean several times over, expired shrink will be low over the next few months. While shrink is normally stable throughout the year with only a few small fluctuations present, COVID-19 will greatly skew those numbers, especially since grocers don’t currently have labor hours being used to look for what’s left. Once stores are able to get back to their normal operations and sales return to normal levels and most frequently bought items, expired items will start to build up again. 

As shrink levels are down, grocers should feel comfortable pulling back from their spot checking schedules and rotation requirements. While close dates are still going to be present, the overwhelming surge in sales and speed of selling out doesn’t provide an efficient opportunity for spot-checkers to accurately report data. Products in the dairy and meat section can probably be skipped for about one month, and grocery can be skipped for about two to three months. Once shrink starts to ramp back up, spot checking schedules should return back to normal, especially with the high volume of dates that will need to be entered. 

How Long Before Expired Shrink Returns?

Take a look at one of our case studies with a mid-sized grocer starting from the day their store opened onward. Looking at a brand new store with completely fresh inventory is the best model we have to compare with today’s COVID-19 impact on inventory. From the data, we’re able to see expired shrink (in units) in a given month across three different departments: dairy, grocery, and meat. For each department, we see a build up each month, followed by a single month peak, and then relatively consistent expired shrink levels each month after. As you plan out resources for post-COVID-19 recovery, keep these timelines in mind for when labor hours should return to spot checking and proactive expired shrink prevention efforts:

  • Processed Meat – 2 months
  • Dairy – 3 months
  • Grocery – 5 months

How Date Check Pro Can Help 

With shelves being cleared and products being cleared from the system, there’s a clean slate for introducing or ramping up the way that your store manages expired food. For a short period of time, grocers are able to take advantage of the above trends to implement Date Check Pro at far lower than normal costs and move into the future more confident than ever in the quality of food being sold to shoppers. 

If you’re interested in learning more about how Date Check Pro can help your store feel free to set up a quick, 30-minute phone call or demo with one of our team members by filling out the information here.

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