As loved ones begin to gather for the holidays, regional and independent grocery stores are planning new strategies to increase wallet share. Finding fresh ways to connect with customers is more important than ever, as food prices, labor shortages, and supply chain issues continue to create challenges for grocers.
Between Thanksgiving and New Year’s Day, how can grocers win more customers and make more profit? By positioning your store as the go-to shopping destination for home-cooked holiday meals and dishes.
The good news is that people are gathering again, creating memories, and sharing meals. The spending forecast is good this holiday season, but it’s essential to prioritize bigger baskets and be a dependable resource.
But experts like Whitman School supply chain professor Patrick Penfield confirm grocery stores across the U.S. will continue to experience food shortages and delays through the end of the year.
“Holiday staples such as evaporated milk, cooking oil, tofu, turkeys, bottled water, carbonated drinks, canned products, bread, liquor, and toilet paper are all in short supply. Consumers can expect to see shortages and pay more for all of these items this holiday season. We continue to see supply chain disruptions throughout the food supply chain,” Penfield said.
But even with all of these factors, the outlook for consumer spending looks strong. The National Retail Federation recently reported that they expect holiday sales will increase 8.5-10% over 2020, indicating considerable momentum. The report also predicts non-gift purchases, including food bought in stores, are expected to dip 2% this year but grow 12% since 2019.
Also encouraging is news from a Vericast survey of 1,000 shoppers. More than half (60%) say they prefer to shop at local neighborhood stores. Plus, 71% of those surveyed agreed that it’s important to support local stores and restaurants. Additionally, nearly three-quarters (74%) of respondents believe they will be attending holiday gatherings with family and friends. More parties mean more trips to the grocery store.
With the positive news about 2021 holiday consumer spending, regional and independent stores can take advantage of the last few weeks of the year. Now is the time to start promoting high-margin items. During the holiday season, shoppers have a variety of reasons to purchase grocery items, including:
Grocers should capitalize on these potential buying opportunities and feature high-margin items like prepared foods, meal kits, hot bars, baked goods, store brands, and beverages. And with the potentially limited supply of poultry this year, consider adding promotions on protein options, including seafood and ham.