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Grocery Retail Quarterly Company Briefing: Q1 2020

June 2020

This report provides an overview of how leading grocery companies responded to the Coronavirus (COVID-19) crisis between January and March 2020. The companies included in this report are Albertsons, Auchan, Casino-Guichard, Carrefour, Cencosud, FEMSA, Koninlijke, Tesco, Walmart and Woolworth’s. Key strategies employed in this quarter included getting creative to meet online demand, adjusting store operations for how consumers shop now and protecting workers.

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Key Findings

Online grocery demand surges

Online grocery purchases saw a huge increase in the first quarter of 2020 as consumers sought low-risk ways to complete their regular shopping and in some cases turned to new channels to find items that were out of stock locally. Grocery players who had been investing in omnichannel capabilities over the past few years received a sudden return on these investments as they found themselves more capable to address this demand.

Curbside pick-up gains steam

Many consumers in Q1 2020 were drawn to try curbside pick-up, a form of click and collect, for the first time. Demand for home delivery outpaced retailers’ capacity in many markets, and many retailers positioned curbside pick-up as a convenient, low-cost alternative. Curbside pick-up is likely to continue to grow in the months ahead as consumers remain hesitant to spend time in-store and as non-essential retailers are increasingly allowed to use stores to fulfil online orders.

Retailers restrict return policies

Many grocery retailers temporarily revised their return policies in Q1 2020 to support smooth store operations and to limit spread of the virus. Some retailers restricted returns only of key items such as toilet paper and hand sanitiser, while others, such as the US mass merchandiser Target, temporarily suspended all in-store returns in March.

Grocery retailers strive to salvage Easter sales

The lead-up to the Easter holiday is an important shopping season in many countries. Easter, which took place on 12 April 2020, was heavily affected by the COVID-19 outbreak as consumers were more cautious with their spending and largely unable to meet with family to celebrate. Many grocery retailers engaged in unusual, early discounting of seasonal Easter merchandise, such as Easter-themed confectionery and flowers.

Introduction

Scope
Company coverage

Q1 Covid-19 Update

China had the most cases, but consumer behaviour shifted globally
Q1 grocery trends

Q1 Companies Update

Albertsons: employee protections take priority
Auchan Group SA: offline-online integration to sustain sales
Casino: shift to home consumption boosts sales online and offline
Carrefour: price freeze on thousands of products in all countries
Cencosud: responding to client needs at a difficult time
FEMSA Comercio: sustained sales, but challenges ahead
Koninklijke Ahold Delhaize NV: accelerating distribution openings
Schwarz Beteiligungs GmbH: focus on the core markets
Tesco: prioritising the vulnerable and doubling its online capacity
Walmart: large-scale hiring to support high online shopping demand
Woolworths: making quick changes to meet demand

Looking Ahead

Takeaways from leading grocery company activity
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