Grocery Sales Dip as Restaurants Reopen

Americans may be feeling more comfortable about dining out.

September 24, 2020

ALEXANDRIA, Va.—The nation’s restaurant industry saw its fourth straight month of sales acceleration in August, with sales up 3.7%, but major grocery chains saw their sales drop 7% from July, according to M Science, a data analytics firm, as reported by GroceryDive.com.

Grocery brands seeing the greatest sales deceleration in August relative to the industry average were Smart & Final, Stop & Shop and Food Lion. Others with decelerating sales were Fairway Market, ACME, Randalls, Food 4 Less, Fry’s, Ralphs, Roundy’s and the online delivery service Instacart.

These trends indicate that Americans are starting to spend more of their income allocated for meals in restaurants rather than at grocery stores, at least in comparison to earlier in the summer. However, densely populated areas, which have maintained more stringent restrictions on dining during the coronavirus pandemic, saw depressed restaurant sales compared to less populated areas, according to M Science. Online grocery delivery had a flatter deceleration in sales in regions with tighter in-person dining restrictions, such as New York, New Jersey and Connecticut.

FreshDirect, which serves the Northeast, was the only online delivery service that had positive month-on-month sales growth. Last month, the service expanded its capacity in New Jersey, Connecticut, Long Island, the Hamptons and Westchester. In June, it introduced a two-hour, on-demand delivery service to people in parts of New York City.

M Science’s data indicate a particularly severe drop-off in sales for the online grocery delivery service Instacart, which had a month-on-month dollar growth deceleration of nearly 60 percentage points. The researchers attributed that drop to consumers’ weariness with high costs of delivery and a greater sense of safety with in-person shopping.  

Whether consumers’ lessened anxiety extends to in-person dining at restaurants is unclear, even as states, including Texas, Mississippi and Pennsylvania, loosen restrictions on indoor dining.

The pandemic has forced restaurant chains to innovate, with many offering special meal deals, delivery promotions and even groceries. According to M Science, all subsectors across the restaurant industry, including QSRs, casual and fast casual restaurants, saw monthly sales accelerate in August.

Coronavirus Resources

NACS has compiled resources to help the convenience retail community navigate the COVID-19 crisis. For news updates and guidance, visit our coronavirus resources page.

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