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Can Grocers Sustain The 'Pre-Christmas Bump'?

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Can Grocers Sustain The 'Pre-Christmas Bump'?

Grocers ended 2020 in a better position compared to other retailers and investors are wondering if the momentum can be sustained into 2021.

High Note: Seven of the largest grocery nationwide grocery chains saw a year-over-year foot traffic decline of just 2.5% on Dec. 23 and a 1.1% drop on Dec. 24, according to foot traffic analytics firm Placer.ai. These figures are particularly noteworthy as it's up against difficult 2019 comparisons.

Excluding non-traditional grocer Trader Joe's, foot traffic would have been higher by 1% on average on Dec. 24.

By comparison, wholesale clubs experienced a 14.7% drop in foot traffic on Dec. 23 and a 4.5% decline the following day, according to Placer.ai.

Strong Year: Organic grocer Sprouts Farmers Market Inc. (NASDAQ: SFM) struggled throughout 2020 but ended it with visits up 4.6% year-over-year for the week of Dec. 21 and 1.5% higher in the prior week.

Albertsons Companies Inc. (NYSE: ACI) also ended 2020 on a high note with visits up 4.8% in the year, while rival Kroger Co. (NYSE: KR) saw its foot traffic gain 1% in 2020.

Related Link: Amazon's California Grocery Store Off To Strong Start: Retail Data Firm

2021 Early Winners: Publicly traded grocers Albertsons and Kroger could see their 2020 momentum continue in 2021, according to Placer.ai. Coupled with privately-owned Publix, the three traditional grocers experienced a "huge" increase in foot traffic of 7.1% on average from June through November.

On top of notable visitor growth, customers are spending more time in stores.

"With periods of economic uncertainty often privileging grocers for their ability to provide meal-time value, and mission-driven shopping likely to linger at least through Q1 2021, it is hard to see any of these brands not producing very effective performance in the coming year," according to Placer.ai.

 

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