INDEPENDENT GROCERS, NATIONAL RETAILERS TO FOLLOW SUIT
Written by: Anjee Solanki
Anjee is Colliers' National Director for Retail & Practice Groups. Based in San Francisco and with 32 years of experience, she provides strategic leadership to over 500 specialized retail professionals across 177 offices. Check out her post on Colliers Knowledge Leader here.
More consumers visit multiple retailers, seeking promotions in search of the best prices, as inflation and high input cost significantly increase food prices at larger supermarkets. With a growth in the frequency of shorter trips, grocery spending is spread amongst retailers, resulting in increased competition. Smaller store formats offer shoppers convenient access to niche brands and a premium shopping experience driven by community engagement.
Consumers Access More Food Sources
Local farmers’ markets, community-supported agriculture (CSAs) and independent grocers are just a few examples of alternative food sources consumers are turning to get more bang for their buck. Local products are typically more expensive than a product trucked in by a huge brand, but in some instances, CSA and local farmers have been able to stabilize their prices, attracting new customers like personal chef Laura Scheck.
“One of my go-to food sources is Lewis Waite Farm, based in Greenwich, NY. They do the legwork of sourcing and curating locally grown and made products from NY state and surrounding areas. I have requested products in the past, like specific cuts of meat and grains, and they will find them and let me know when they’re in stock. They also remember that I buy a certain kind of flour and will email me when they place an order for 25-pound bags so I can get it. Unfortunately, locally sourced products from small family farms are costly, and I can only do some of my shopping from this source. So I buy in bulk as much as I can where I find value, and Lewis Waite helps me to shop responsibly and sustainably.”
A positive by-product of the pandemic has been the increased community engagement on a hyper-local level between shoppers and their local grocers, a trend that anecdotally drives foot traffic in-store. ACME is a 4th-generation family-run smoked fish wholesaler in Greenpoint, Brooklyn supplying top-quality smoked fish products across NYC and nationwide at grocers and retailers. On Fridays, they run a special “Fish Friday” promotion for the general public. “I’ve been Fish Friday-ing since the mid-00s, when you’d have to wait in a long line, enter through the plastic flap doors into their refrigerated packing plant turned pop-up retail shop, and hand select what you like,” shared a long-time customer. “When the pandemic hit, they launched an online shop and a user-friendly app with curbside pickup. The staff is friendly, and they seem to enjoy working there. The team operates like a family greeting customers with a friendly welcome, smile, and exchange from the lovely fellow distributing the orders, and occasionally, a complementary surprise in my order. Last time, it was salmon candy, smoked with brown sugar!”
Wes Wright, the founder of CookOut News, constantly buys meat to test out grills and smokers, turkey breast being his favorite. “I like to cook a fresh, naked turkey, one without the brined solution from the packing plant, which is a hard sell at a large grocery chain and even harder when it’s not Thanksgiving. Lucky for me, my local grocer Hollywood Markets sells fresh turkey breast they marinade in-house. They’ll hold an unbrined bird for me or ship one from another store if they’re out. It’s the main reason I shop there.”
The rise in online grocery shopping during the pandemic prompted the Berkeley Bowl, an independent grocery store in Berkeley, CA, to launch an e-commerce product. “When Instacart took off, we realized we needed to have our competitive product, an e-commerce shop to sell our products online,” shared Chi Dixon, Marketing and Communications Manager, Berkeley Bowl. “It has elevated brand awareness for the company and the founder’s ethos to provide quality products and produce to the community at an affordable price–where can you buy a bag of avocados for $.99.”
Smaller Format, Positive Results
Some grocers are leaning into a flexible smaller-store format to provide a product mix tailored to their consumer base. For example, Publix’s GreenWise Market, which offers organic and essential groceries in a smaller format, saw an increase in foot traffic year over year in September. Positive results are trending for retailers across categories experimenting with smaller store formats, a topic we discuss in detail in our winter retail report.