Grocers, Food Companies Prepare for Demand Spike

Holiday season and more COVID-19 cases are expected to expand shopper needs.

September 29, 2020

ALEXANDRIA, Va.—Grocery stores and food manufacturers are preparing for a possible surge in sales amid a predicted increase in COVID-19 cases and the impending holiday rush, reports the Wall Street Journal.

Stores are stockpiling food and supplies for the fall and winter, when some health officials expect another outbreak of virus cases and new restrictions to arise. As such, food companies have boosted production of their most popular items.

Southeastern Grocers secured holiday turkeys and hams over the summer, months before it normally starts inventory planning, said Anthony Hucker, CEO. And grocery wholesaler United Natural Foods is stockpiling extra cranberry sauce, herbal tea and cold remedies. “We started talking about Thanksgiving in June,” said Chris Testa, president. “That’s earlier than we ever have.”

The Associated Food Stores chain is building “pandemic pallets” of cleaning and sanitizing products to ensure inventory in warehouses, said Darin Peirce, vice president of retail operations for the cooperative of more than 400 stores, and the chain is establishing protocols for managing high demand.

These actions are a shift from the just-in-time inventory management practices that retailers have followed for decades. Now, food sellers are stockpiling months, rather than weeks, worth of staples and paper products to better prepare for winter, when shoppers are expected to hunker down at home. Ahold Delhaize and others say they are buying more food and stocking warehouses with wellness and holiday items.

Back in March, “we didn’t know what we didn’t know,” said Chris Lewis, executive vice president of supply chain at Ahold Delhaize’s Retail Business Services. Ahold Delhaize, owner of the Giant and Food Lion stores, already has holiday inventory in its warehouses and is storing 10% to 15% more inventory than it did before the pandemic.

Industry executives say they don’t think a potential wintertime spike in grocery demand will be as extreme as it was in March, when people panic-shopped, fearing grocery closures or food shortages. Consumers are better prepared this time around, said Sean Connolly, chief executive of Conagra Brands. Despite the preparation efforts, stores find that some products—such as cleaning wipes and canned vegetables—are still difficult to obtain.

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.