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What happens when the next crisis hits?

COVID-19 offers a window into how important it is for the grocery industry to prepare for what calamity might come next

Shutterstock/eldar nurkovicShutterstock/eldar nurkovic

As most of us are reeling from the biggest pandemic to hit the world in more than a century, the grocery sector has already proven its resiliency. Yet it’s also being charged with considering how to better prepare for whatever crisis comes next.

“In some regards this is a wakeup call and we need to think about how we’re going to protect ourselves for the next, even bigger hit,” says Evan Fraser, director of the Arrell Food Institute at the University of Guelph. “The grocery community has done a tremendous job and I commend them, but this situation has also exposed vulnerabilities and I don’t think we can ever go back to the olden days,” he says, referring to just weeks ago.

As an essential service during the COVID-19 pandemic, grocery stores have proven they can quickly adapt to exceptional circumstances. Not only did most retailers immediately stop their self-serve sections and sampling soon after COVID-19 hit, they shut down seating areas and restricted the number of shoppers inside to adhere to social distancing guidelines. Many also designated shopping hours for seniors and other vulnerable groups. Or they helped customers avoid going into their stores entirely by upping their online and delivery options, or by offering curbside pickup of grocery items that staff could shop for them.

READ: How Canadian grocery is dealing with COVID-19

Joe D’Addario, president of independent grocery chain Nature’s Emporium, says he’s most proud of how quickly his four Ontario stores were able to implement a contact-less curbside pickup option. “We had to pivot our operations on a dime and in the last four days, we’ve helped 2,000 people from having to come through our front doors,” he says. The natural health food grocer also added full-time greeters at each store to suss out whether customers had recently travelled or were experiencing symptoms. “You’d be surprised by how honest people are and we’ve managed to thwart them from entering the store [if needed] that way.”

These days, a heightened emphasis on sanitation in grocery has become the norm. At large chains and independents alike, hours have been adjusted to allow staff more time for sanitizing, restocking and rest. Sanitation wipes and hand sanitizer stations are common, and Plexiglass at checkouts with staff donning gloves and masks are helping keep infectious germs at bay.

“Consumers have faith and satisfaction with retailers and what’s been done already is working pretty well so far,” says Shelley Balanko, senior vice-president at Hartman Group. In fact, 69% of U.S. shoppers rated their primary grocery store’s response to COVID-19 between an eight and a 10 out of 10, according to the March 2020 US Grocery Trends COVID-19 Tracker, conducted by The Food Industry Association and the Hartman Group. Even if things aren’t operating optimally for some grocers, Balanko advises they stay the course and keep trying. “Consumers get that nothing is perfect right now and they’re appreciative of what [grocers] are doing.”

Shoppers feel good about grocers’ safety precautions: Survey

But even with all these commendable efforts by grocers, these past few months have shown the sector is still susceptible to crisis, says professor David Soberman, Canadian National Chair in strategic marketing at Toronto’s Rotman School of Management. “A simple thing I see is the need to implement limits on items a lot sooner, because when people start stockpiling, it creates panic and shortages for others,” he says. “When I see someone with 32 packs of toilet paper in their shopping cart, that’s a problem.”

Soberman also points to the online grocery opportunities that will inevitably emerge out of this period and whether retailers will be ready. “Some organizations have taken off already with online shopping but they’re overloaded with deliveries and can’t keep up,” he says. “Some thought needs to be put into how grocers can have the capacity to ramp up online in times of crisis and how they can help vulnerable populations access these services.” That could entail in-store initiatives, too, he says, such as having a program for senior customers who come into the grocery store to be taught how to order products online.

READ: Grocery industry continues to grapple with COVID-19 delivery demand

This overnight surge to online shopping during COVID-19 has prompted online grocer Spud.ca in Western Canada to launch a whole new division in a week’s time to offset demand. “We saw a 300% increase in revenue in that first week of the pa demic and that’s just not sustainable,” says founder Peter van Stolk, noting that initial hoarding and lack of supply was a real challenge. “What we’ve learned from this pandemic is that we need to have contingency plans in place to keep staff safe and supply chains safe for customers—and to address changes we don’t even know will happen in the future.”

READ: How smaller online grocers are adapting to the COVID-19 era

What history has proven is that massive disruptions like COVID-19 typically provoke changes in supply chain, notes University of Guelph’s Fraser. “My prediction is that this will stimulate massive investments in technologies to deal with supply chain management,” he says. More and more local/regional area grocers may start looking at whether they can source locally and bring supply chains under their control, says Fraser, because highly centralized systems (e.g. meat packing) present vulnerabilities. “I don’t think any of us will go back to a situation where we’re as laissez-faire about disease transfer as we used to be, and we’re going to be more concerned about food safety,” he says.

Ran Goel, CEO and founder of Fresh City in Toronto, says having a more localized supply chain has paid dividends for business but scaling up has been an issue during these pandemic times. “We’re not as reliant on imports as other grocers because 50% of what we sell, we grow or process in house,” he says. “But we had to stop taking new customer orders two weeks ago because the wait list was getting too long.”

READ: Fresh City doesn’t let pandemic halt new store opening

Perhaps the best way to tackle what comes after COVID-19 is for grocers to start sharing best practices and lessons learned, advises Nature’s Emporium’s D’Addario. “This is not the time to be competitive because we should be working together to find solutions,” he says. “I’m happy to see another grocery store adopt what we’re doing here.”

This article appeared in Canadian Grocer‘s May 2020 issue.

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