As COVID-19 continues to wreak havoc on human lives, the global economy remains in an unprecedented suspended state. With businesses shuttered and people sequestered, little remains of normal day-to-day life. One of the most drastic and noticeable changes in the social order of things is how and when we now procure the most basic of necessities: our groceries. Once a ubiquitous and often mundane part of our weekly (or often daily) routine, food shopping has now taken on a whole new meaning, one rife with hidden danger and frustrations at nearly every turn. Whether a consumer or a supplier, people at all points of the agricultural supply chain feel the effects of the current public health crisis. Here’s how the present pandemic is affecting the American grocery store:
Panic is dictating normal shopping excursions, with people frantically buying more than they need. The empty shelves don’t mean that American farmers aren’t producing food fast enough or that the overall inventory of available food is low, though. On the contrary, food producers indicate that their products are just in the wrong places. During a normal day or week, grocery stores receive only what they have been shown to typically need. When that demand goes up unexpectedly (like during a pandemic when people want to stock up on staples to carry them through longer periods between shopping), suppliers have to race to reallocate inventory from other places. The result: lower inventory in stores (but not a true shortage of food).
With most states implementing shelter-in-place orders, many people are avoiding even the few open establishments, like grocery stores and restaurants, and instead favoring delivery options that allow them to stay home and away from other people. Online grocery orders have skyrocketed. One source shows 31% of American households used an online grocery delivery service in March 2020, more than double the amount shown previously (August 2019). Indeed, more and more people are trying online delivery and saying that they will probably continue to shop virtually even when the pandemic ends.
Possible Increases in Pricing
Currently, the threat to the overall agriculture economy is being mitigated by government programs meant to alleviate the most pressing effects of COVID-19 and its accompanying loss of labor. In the future, however, consumers could see a noticeable increase in grocery prices as supermarkets struggle to cover their own costs as passed on via farmers, middlemen and others due to the increasing costs of food production without any stimulus or government help. Of course, if businesses along the production channel can find ways to overcome economic liabilities and increase their own ROI through better products and/or better market research practices (such as those offered by reputable firms like Communications for Research), then these price increases might never fully materialize. Only time will tell!