Traditional grocers are showing their strength during the COVID-19 outbreak.
An analysis of foot traffic at major grocery store chains during the COVID-19 break by advanced foot traffic analytics platform Placer.ai showed that most players in the grocery sector followed a fairly similar pattern, with traffic experiencing significant year-over-year growth leading into a huge peak in the second week of March. Yet, from this point, the paths diverge.
The hardest hit banners included Whole Foods Market, which was an exceptionally steady performer from January 2019 through the second week of April 2020, the report found. But the chain saw visits decline more than 50% year-over-year for the last two weeks of April.
Trader Joe’s also has suffered major declines of over 45% year-over-year in the first week of April and over 55% in the second week.
Foot traffic at both Whole Foods and Trader Joe’s has been affected by their location footprint, which prioritizes major cities on the coasts, which are among the hardest-hit areas by COVID-19, noted Placer.ai. But an orientation towards less frequent visits also hurt both brands with Trader Joe’s also being affected by its perception as a niche grocer – as opposed to a ‘one-stop-shop’ like a Publix or Wegmans.
In contrast, the coronavirus period has reinforced the strength of traditional grocery chains, with Kroger and Albertsons seeing with year-over-year weekly traffic growth peaking at 50.0% and 33.0% for Albertsons and Kroger respectively the second week of March. But, equally impressive, their lows have been relatively moderate with weekly visit drops of 11.3% and 12% marking their respective low points.
“The performance of these brands seems to rest on their traditional approach – they are the old school grocer that aims to serve as the core grocery for its local community,” stated the report. “And this works with great effect, especially in the current climate.”
Although Wegmans and Publix have both seen significant hits to their traffic, their relative performance may be all the more impressive considering their respective circumstances, according to Placer.ai. Wegmans and Publix both suffer from geographic distributions that put them right in the middle of the pandemic. Yet, they still remain far better off than some of the other grocers facing those same challenges.
“The combination of high customer loyalty with a strong mix of value and high-end appeal positions both brands to perform well in the economic downturn as well,” the report said. “Even more, elements like Wegman’s Market Cafe could provide an added value during the coming months when families look to find cost-effective ways to eat. This ‘QSR-ish’ component is something worth following closely as it could be a huge asset that other grocers look to replicate.”
To read the full Placer.ai report, click here.