Grocers Predict Post-Pandemic Sales Drop

March 5, 2021
Grocers are projecting a post-pandemic decline in sales as consumers resume eating out.

Grocers are projecting a post-pandemic decline in sales as consumers resume eating out, according to predictions from both grocery companies and analysts.

Many grocery stores saw a spike in sales as the pandemic took hold and eating at home was an appealing option, if not the only one available. But that situation will reverse itself going forward, leading to declines in sales, according to some forecasts.

Nationwide grocery sales will drop 5% this year, for their first decline in 20 years, after growing 11% last year, according to a prediction by UBS quoted by CNN.

Kroger, America’s largest pure grocer, saw sales increase 14% in 2020. But it’s predicting a decline of 3% to 5% this year. Sprouts Farmers Markets, after growing business nearly 7% last year, said it expects a decline this year. Walmart, the biggest U.S. grocer by sales, which had an 8.6% spike in sales, expects growth this year, but in the low single digits.

One possible consequence will be aggressive discounting, as grocers seek to retain customers. Large brands will be especially prone to this as they seek to prevent shoppers from gravitating to private label.

Food prices overall should remain relatively stable, with occasional spikes but little overall inflation, Kroger CEO Rodney McMullen told CBNC. He said there may be variability in individual categories like meat, where supply was whipsawed by plant closures, but that overall food price inflation should be minimal.

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