Grocery Roundup: Supermarkets Look Ahead, In-Store Pharmacies Struggle

For almost a year now, many grocery stores have had to play catch-up, responding to ever-changing consumer behaviors influenced by each shift in the course of the coronavirus pandemic. While infection rates remain high in most areas, the U.S. is also starting to see widespread vaccination, with more than 24.5 million doses already administered in the U.S., according to Bloomberg. As a pandemic-free future comes into view, grocery stores are beginning to take a longer view, looking ahead to consider what their role will be in the post-quarantine world.

Food Marketing Institute President Leslie Sarasin told industry leaders at the FMI Midwinter Executive Conference that the food industry is “uniquely positioned to actually write this new narrative going forward,” reports Supermarket News, both helping with vaccination logistics and demonstrating resiliency for consumers and businesses. “We’ve learned in the past 10 months that we can move relatively fast and furiously to protect our associates and the American consumer,” Sarasin noted, later adding that employee well-being would be key to this leadership. “If we’re to help develop an improved next normal, we should build upon the positive public perception we accrued in our response to the pandemic and assertively seek out ways to expand our efforts to applaud, develop and retain our workforce.”

Coborn’s And Albertsons See Meals Growth

As consumers have become accustomed to life mid-pandemic, they’ve come to expect high-quality food options from previously less sought-after sources. Midwest-based supermarket chains Coborn’s and Albertsons, taking note of their meal solutions’ recent success, have been doubling down on offering shoppers prepared meals, reports Winsight Grocery Business.

“In holiday meals, we did 2.5 times the volume in 2020 than the previous year,” said Coborn’s Director of Deli Josh Croson. “Restaurants have been closed for how many months now? Consumers want a meal where all they have to do is pop it in the oven and heat it up. And I think a certain percentage of people won’t return to the way things were before the pandemic.”

Albertsons CEO Vivek Sankaran offered this prediction: “I think you’ll see more of the restaurant business and the supermarket business converging.” Sales of meal kits, prepared side dishes and other meal prep shortcuts create opportunities for future growth, explained Anne-Marie Roerink, principal of 210 Analytics, as do prepared deli breakfasts, with more consumers shopping in the morning in an effort to avoid the contagion risk of peak shopping hours.

Kroger And Ocado’s Automated Fulfillment Center

Kroger announced on Jan. 22 that its new Customer Fulfillment Center (CFC), created in partnership with grocery tech company Ocado, will be located in Phoenix, Arizona to serve the Southwest. The automated CFC uses robotics and other digital technology to fulfill online orders. The facility, which will be 200,000 square feet, is expected to be operational 24 months after the start of construction.

“This exciting new collaboration will create hundreds of new jobs in Arizona,” Governor Doug Ducey said of the project. “Arizona is proud to be one of the first sites in the country to launch this innovative technology.” However, research has shown that automation can cause mass job losses. Middle-wage jobs, such as warehouse jobs as well food prep and food service jobs, will be hardest-hit by the process.

“With Kroger, we are developing a game-changing ecosystem for serving online grocery to customers across the United States,” Ocado CEO Luke Jensen said in the release. “This includes Ocado’s automated CFCs across a range of sizes, as well as software to optimize fulfillment in stores for curbside pickup.”

The CFC joins Kroger and Ocado’s existing locations in Central Florida and the Mid-Atlantic.

ShopRite Pharmacy Closures

Of course, not all grocery stores are in a position to expand right now. Supermarket chain ShopRite’s parent company Wakefern Food is closing 62 underperforming in-store pharmacies, reports the Philadelphia Inquirer. The company has sold customer lists to CVS pharmacies, reassigning prescriptions to CVS stores near the shut-down locations. One-hundred and forty-seven in-store ShopRite pharmacies remain in operation.

“The pharmacy industry is highly competitive, and we were unable to sustain sufficient sales despite our marketing efforts, which led to the difficult decision to close these store pharmacies,” Wakefern said in a statement excerpted in Grocery Dive.

For some time now, grocery stores’ in-store pharmacies have been struggling to compete with pharmacy giants. However, these ShopRite closures come at a time when many pharmacies are anticipating a revenue boost in the near future, as the COVID-19 vaccine becomes available to more consumers. While these vaccinations will not cost consumers any money, pharmacies will be paid for their distribution by patients’ healthcare providers. In fact, 39 ShopRite locations are currently providing vaccines, and are experiencing such high demand that the appointment schedule is fully booked. These vaccinations will not be affected by the recent closures.

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