How Small Grocery Stores Are Surviving Today in a “New Normal”

Secondary retailers and small grocery stores have always been an accessible, convenient option for their local community rather than trying to provide a huge selection of products that appeal to the masses.

“In our increasingly diverse nation, regional stores can offer a hyper-tailored selection that includes niche products and produce, giving a taste-of-home feel that can’t be paralleled in a big box’s global aisle intended to appeal to people from around the world.” — Keith Daniels, author at Progressive Grocer.

While many may say that the younger generation prefers customizable and personalized experiences, most consumers shopping these stores prefer the convenience and supporting local businesses. As we see it with many secondary retailers, these smaller stores can provide a variety of great deals and local products their customers might not find elsewhere.

One advantage many smaller stores have seen, especially during the pandemic is being a “community space” for local residents. These are places where people connect with their neighbors and are able to do so safely and comfortably.

COVID’s Impact on Small Grocery Retailers

COVID-19 imposed a large threat to small, independent stores of all kinds. The pandemic also revealed the flaws and weak points in the production and distribution system for groceries and other products. Many grocery items were out of stock and those available were stockpiled by consumers leaving food manufacturers struggling to keep up with demand. Yet, many food manufacturers supplying restaurants and venues like stadiums were left with products not labeled for individual sale or grocery store shelves.

At Natural Choice Foods we were able to work with many of our vendors and customers to help overcome the challenges they faced. Our Repack Facility that opened late last year provided an option to food manufacturers who had bulk products they needed to be able to repackage to sell. And, since we sell to over 350 stores across the USA, we were able to provide them with inventory they needed to stay afloat and feed their customers.

This was possible since the USDA allowed for temporary flexibility in labeling to allow for the repack and redistribution of food products that were intended for food service, so they could be sold in retail stores. While many food distributors struggled to adapt, we’re proud to say that our structure allowed us to adapt quickly and maintain the purchase and resale of grocery items.

Limited capacity in some restaurants and the security of staying home mean more people are cooking at home, which has put even more pressure on food manufacturers, distributors and grocery retailers. Maintaining inventory will continue to be a factor for food and grocery retailers everywhere.

Online Shopping’s Impact on Local Stores

Bain & Company, a research firm, reported that only 3% to 4% of consumers shopped for groceries online prior to the pandemic, but it is expected to rise between 5-10% in the years ahead. This includes ordering online for curbside pick-up and delivery services. Thinking of smaller, secondary retailers, there will continue to be a need for grocery items locally. Still, adapting to offer call-ahead ordering or working with third party shoppers for customer convenience may not be far off.

Grocery Shopping as We Know it Has Changed

Overall, shoppers’ mindsets have changed during the pandemic and are likely to remain this way in the future. Safety and necessity are impacting shopping habits. That and for many families, the value for every grocery dollar will remain important. Convenience is and always has been a high priority. Still, as many people work to recover from the Pandemic’s impact on their jobs, a good value is critical. Progressive Grocer reported that, if unemployment benefits are reduced, shoppers report they will spend less at most channels; only the Dollar channel nets out with no change in spending.” This can be good news for the secondary retail market, while larger, regional stores may struggle against the larger, big box stores and increasing online shopping sources.

We own and operate five Daily Deals Food Outlets in West Michigan, so we understand the challenges and opportunities the secondary retailers face now and in the future. Our goal is to provide them with a competitive advantage through our inventory of quality, name brand products and now private-label grocery items. We hope to play a role in helping them succeed in the “new normal”.

If you’re interested in learning more about our repack services or buying from us, contact us today.

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