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05/28/2021

New study looks at post-pandemic grocery trends

Deloitte examines the consumer habits that are here to say and how grocers can maintain the COIVD-19 sales boom
A shopping basket full of food sits on a table at the end of a grocery aisle
Shutterstock/Maxx-Studio

The grocery industry underwent massive change during the pandemic, but a new report from Deloitte looks at what life for Canadian grocers could be like as vaccinations go up across the country and the end of the crisis, hopefully, draws near.

The focus now should be on maintaining the momentum gained during the pandemic, identifying which consumer trends of the past year are permanent, and adapting and responding to life after the pandemic, according to Deloitte.

The study, “The conflicted consumer: 2021 food consumer survey” is based on research conducted by Deloitte between March 2020 and May 2021, including a quantitative survey in March 2020 and again in 2021 (an average of 1,000 respondents) as well as qualitative research across age groups and in-depth interviews with industry executives.

One of the most obvious trends in the last year has been what Deloitte refers to as the “rise of the epicurean” or, put another way, the surge in home cooking while people were forced to stay at home more and go out less. According to Deloitte:

  • 66% of all respondents—and 72% of those 35 to 54—say they’re cooking meals at home more than in the previous year;
  • 63% prepares dinner from scratch four to six times a week; 85% spent more on fresh produce;
  • 79% spent more on plant-based milks and other non-dairy products; 72% spent more on meat alternatives; and
  • 40% is spending less on baked desserts, prepared ingredients and hot ready-to-eat meals.

“The big question is how much of that will stick afterwards,” said Marty Weintraub, national retail leader at Deloitte Canada.“We believe quite a bit of it.”

One reason for that is cooking more from home intersects with previous trends that had been growing pre-pandemic, he said. Increased interest in health and wellness, being sustainable, and reducing waste, all align with cooking more at home.

According to the report, the expected increase in dining out when restaurants reopen will not reverse the increased interest in home cooking. “Consumers will continue to add new recipes to their rotations, looking to grocery stores for meal inspirations and expecting more from in-store associates than speedy checkouts,” the report reads.

However, the important unknown variable will be how much time grocery shoppers will have to cook at home post-pandemic and that will depend on factors like the shift in how, where and when people do their work once the pandemic is over.

Increased interest in meal kits is almost certainly another permanent change caused by the pandemic and an important factor for grocery retailers to contend with, said Weintraub

One in 10 Canadians tried a meal-kit delivery service for the first time during the pandemic, and 65% of that group will continue to use meal-kit delivery in the next 12 months.

The growth curve for meal kits was pretty steep, the question will be how long that growth curve continues its upward trajectory, said Weintraub. “There won't be a tremendous amount of pullback,” he said. “I think it's a real threat, and we've seen some grocers respond with their own meal-kit services. But I do think this will be a bit of a battle coming out of the pandemic.”

The pandemic also led Canadians to try new food shopping options for the first time including:

  • 25% tried curbside pickup;
  • 15% tried grocery delivery;
  • 15% tried third-party food delivery services; and
  • 10% tried meal-kit delivery.

However, just 23% of respondents said they are satisfied with online delivery or pickup, which may explain why respondents still buy 89% of their groceries in brick-and-mortar stores instead of online—though this drops to 84% for those 18 to 34.

Canadian grocers did a lot of business online over the past year, but to hold onto that business they need to improve their online offer, said Weintraub. They shouldn’t assume their online business would simply move back in-store when the pandemic is over.

“They need to continue to innovate that online experience, and keep that profit online,” he said. Grocers shouldn’t be thinking about one replacing the other, they can be complementary to the overall shopper experience and done right can help grocers maintain the expanded basket they’ve enjoyed over the past year. “Find that balance between in store and online, because there is a balance.”