Grocery was one of the clear stories for 2020, with significant increases among the top players. But look a little more deeply into this category, and both opportunities and perils await. Big box retailers like Costco Wholesale and BJ’s Wholesale Club both saw sizeable growth. They benefited from their ability to deliver one-stop shopping, says David Marcotte, senior vice president at Kantar. It was a year “when people didn’t want to go to a lot of stores.”
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He points to Target as an example of a company that’s “able to leverage improvements made at the start of 2020 with growth.”
The challenge ahead, he believes, is to focus on experience. “They have to become focused on merchandising and to invest in stores to make it better for a shopper.” That, he said, is challenging “in multiple ways.”
One concern is the short supply of building materials needed to improve stores — things like tile, flooring and graphics, he says, “all the things you might put into a store to make it look nicer.”
With families at home, pet adoptions were big and that drove an increase in pet stores like Petco and PetSmart. PetSmart was up 11.1 percent over 2019, while Petco increased 10.4 percent. “They had about five to 10 years of solid growth in that one year,” Marcotte says.
Pets are making their way into other retail settings, as well, with merchants hoping to capture “the emotion” of the pet as a family member.
“It used to the be the emotional department in any store was babies,” Marcotte says. “You’d have nice organization and merchandising.” Today, though, he sees the baby aisle as “pretty utilitarian. Now, it’s around the pet aisle. If I’m in retail, the easiest thing to do is invest in pets.”
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